Exclusive: Sacramento Metro Chamber wants single force for economic development
SBJ | Mar 8, 2013
Sacramento Metro Chamber board chairwoman Martha Lofgren makes the case for a unified nonprofit effort to promote Next Economy, a regional economic development planning initiative.
By Jack Robinson, Editor, SBJ
The Sacramento Metro Chamber wants to join with organizations like SACTO and SARTA to create a single economic development group that could put more muscle behind the region’s “Next Economy” initiative.
Leaders of other groups say they welcome the discussion. But some have doubts about the idea.
If consolidation would help the Sacramento Area Commerce & Trade Organization better accomplish its mission, “we’re all in,” said Barbara Hayes, the organization’s CEO. But she cautioned that few California cities have a single all-powerful organization to recruit, retain and develop and advocate for all kinds of businesses.
Hayes noted that chamber leaders have been inspired by successes in cities like Houston, which has a very different political and cultural environment. “It’s a great model, but it’s a great model for Texas,” she said.
The idea has been circulating in the Sacramento chamber’s executive committee for nearly two years, but has not been made public. In an email obtained by the Sacramento Business Journal, chamber board chairwoman Martha Lofgren told members of the full board late last month that the concept did not include dissolving the chamber. And “there is no intent to eliminate or absorb any existing nonprofit into the Metro Chamber,” she wrote.
But the chamber’s executive committee “proposed to develop alternative organizational models for discussion and careful consideration that could result in combining one or more of the nonprofits that have Next Economy responsibilities.”
Next Economy is a regional economic development planning initiative being spearheaded by Valley Vision, another nonprofit organization that the chamber is eyeing as a partner in the new organization.
Leaders of Next Economy, which has been in planning stages since 2011, expect on March 19 to outline the specific goals, timetables and responsibilities each organization will have over the initiative’s five-year span.
The overall purpose is to turbocharge the region’s growth, with particular focus on six industries: advanced manufacturing, agriculture and food, clean energy technology, education and knowledge creation, information and communications technology, and life sciences and health services.
Making Next Economy successful will require more than a loose collaboration of nonprofits, Lofgren said in an interview Thursday. “My own personal view … is the implementation will be more successful with a consolidated economic development organization,” she said.
“The chamber recognizes that the identity and mission of each organization is important,” she said. Though the groups would be subordinate to a new umbrella organization with a single board, each would keep its own brand. The result would be greater efficiency and, most importantly, more effective economic development, she said.
“Ultimately, the mission of all the organizations should be jobs growth in the region, not self-perpetuation,” she said.
Lofgren said the consolidation idea has been floated many times over the years. But it moved on to the front burner nearly two years ago with the resignation of former chamber CEO Matt Mahood. This created an opportunity to reconsider the group’s structure, said Lofgren, who served as interim CEO of the chamber until Roger Niello took the post in January 2012.
A working group made up of representatives from the chamber and SACTO was charged with recommending the best way for economic-development groups to eliminate overlaps and duplication. The group’s report stopped short of urging consolidation, recommending that the groups share office space, back-office staff and planning.
Hayes said the chamber’s executive committee was unsatisfied with this conclusion and talks continued. In December, SACTO proposed an arrangement that would have the two organizations overseen by an advisory committee that would “hold both organizations responsible,” and encourage joint planning, but not have authority.
The chamber’s response was a letter to SACTO board chairman David Parkes dated Feb. 21 suggesting that the arrangement still didn’t go far enough. In the letter, Lofgren proposed adding other nonprofit organizations, including the Sacramento Area Regional Technology Alliance and Valley Vision, to the mix.
The chamber’s vision calls for nonprofits to keep independent missions and advisory boards, but each —including the chamber itself — “will be required to consider change,” she wrote.
Leaders of the other organizations said they were open to talks, but expressed caution.
The chamber proposal will require detailed discussions, and “we look forward to that opportunity,” said SARTA’s chief executive, Meg Arnold. Her organization fosters growth of the capital area technology sector.
Bill Mueller, CEO of Valley Vision, said he saw a lot of merit in the chamber’s idea, but — like Hayes — warned that what works in other cities may not work in Sacramento.
“Let’s be careful we don’t import a model that doesn’t fit” culturally or economically, he said. “I’m always concerned about rushing into form before we think about function.”
Like Hayes, Mueller said any discussions about consolidating Sacramento’s economic-development groups will occur independently of the Next Economy campaign.
In laying the groundwork for Next Economy, “We’ve set our ladder against the right wall,” he said. “What isn’t quite clear is if there is a better ladder.”
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