Utah Alliance for Economic Development

1
Procter and Gamble- a case study of the
recruitment process

• Utah Alliance for Economic Development

2
Procter and Gamble
3
Procter and Gamble

• More than 250 branded products
• 50 Leadership Brands (24 generating one billion
  dollars)
• 4.4 billion consumers around the world
• Operations in over 80 countries, our brands are
  in 180
• 125,000 employees representing over 140
  nationalities
• Ranked 5 among the Global Most Admired
  Companies
• Over 80 billion in Annual Sales

4
Procter and gamble

• First PG Greenfield site in the U.S. in over 35
  years
• Box Elder site part of PG Family Care business
• 6 Family Care manufacturing plants in the U.S.
• New capacity every 18-24 months historically
• Economic and regional opportunity for
  manufacturing capacity and distribution in the
  Pacific Northwest
• Producing Bounty paper towels and Charmin toilet
  tissue

5
Governors office of economic development

• Full and active support of Governor Jon Huntsman,
  Jr.
• Close partnership between GOED, EDCU, Box Elder
  County, and Brigham City EDPs
• Help with State Boards, Legislature
• 9 million shortfall to cover infrastructure
  costs paid through legislative authorization of
  loan from Water Quality Board

6
Governors office of economic development

• EDTIF (Economic Development Tax Increment Fund)
  program
• 85 million incentive over 20 years
• Based on company projections
• 900 full time jobs in 10 years and over 1,000
  jobs in 20 years
• Projected wages greater than 200 of Box Elder
  County median wage
• New State revenue - 98,522,000 over 10
  years/280,739,000 over 20 years
• New State wages Over 400,000,000 over 10
  years/over 1,000,000,000 over 20 years
• Capital investment - 540,000,000
• ROI Multiplier 3.3

7
Governors office of economic development

• GOED Board approval
• 50 of New State Revenues in years 1 through 5
• 30 of New State Revenues in years 6 through 18
• 15 of New State Revenues in years 19 and 20
• Terms and Conditions
• EDTIF maximum incentive not to exceed 30 of new
  state revenues over the life of the project
• The company must commit to keep operations in
  Utah for a minimum of 20 years
• The average salary of new employees must be equal
  to or greater than 200 of the Box Elder County
  Median Wage
• Subject to Box Elder County local incentive

8
Economic development corporation of utah

• Founded in 1987 as a private non-profit
  corporation
• Serves as a catalyst to facilitate job growth and
  capital investment in Utah.
• Partners with GOED, city and county governments
  to expedite economic development statewide
• Primary focus is on corporate recruitment and
  retention
• Serve as a single point of contact for all site
  selection activities
• 270 supporting public and private partners

9
Economic development corporation of utah

• Initial response to Project Gold Rush September
  29, 2006
• Sites submitted in Emery, Sevier, and Box Elder
  Counties
• First site visit December 12, 2006
• Sevier and Emery County sites eliminated
• Organized meetings with GOED(Incentives), Utah
  State Department of Environmental Quality, Rocky
  Mt. Power, Questar Gas.
• Susan Thackeray arranges meetings with local
  government officials, water district officials,
  property owners.
• Second site visit December 20, 2006
• Delta site added for tour
• Third site visit March 20, 2007
• Delta site eliminated
• Procter Gamble discloses identity
• October 9, 2007 GOED offers record 85 million
  incentive to PG
• October 17, 2007 - Procter and Gamble announces
  selection
• of Box Elder County

10
BOX Elder County

• Four things I learned on the way to the
• Box Elder County
• Procter and Gamble plant.
• Never recruit a company you wouldnt want your
  kids to work for.
• Teacher Susan Thackeray
• When its right, put your heart and soul into it.
• Teacher Clark Davis
• Utah is more than a pretty great state.
• Teacher some things are self evident
• Economic development is a team sport.
• Teacher Procter and Gamble, GOED, EDCUtah, Box
  Elder County, Brigham City, Brad Baird.

11
BOX Elder County

• Local participation (required by EDTIF approval)
• Box Elder County Redevelopment Agency (Required
  partnership with, and buy-in by Box Elder School
  District, Box Elder County Commission, Bear River
  Water Conservancy District, Box Elder Mosquito
  Abatement District)
• Up to 24 million for public infrastructure
  (water and sewer line extensions)
• Up to 31 million of economic incentive to PG
• Years 1-5 90 of increment
• Years 6-20 70 of tax increment
• Local economic incentive capped at 31 million

12
BOX Elder County

• Economic Impact Benefits
• Net direct benefit to County, School District,
  other SSDs - 7.6 million (20 years)
• Net indirect benefit to County, School District,
  other SSDs - 32 million (20 years)
• Consultants/Advisors
• Assisted in establishing Economic Development
  Project Area to enable tax increment financing
• Financial projections
• Legal issues associated with recruiting effort

13
Brigham city

• Initial impression from RFI was negative due to
  scale
• 1,000-1200 acres
• Within 200 miles of a major metro
• 600-1,200 employees over a ten-year period 2,500
  over a 30-year period
• Rail service, including on-site accommodations
  for 300 rail cars and a 50 car runaround track
• Close proximity to a large river, lake, or
  reservoir as water availability for production
  will be critical
• Excellent interstate transportation access
• 100-120 MW electrical demand
• The Client understands that the facility will
  need to employ the best available control
  technologies (BACT) and maximum achievable
  control technologies (MACT) for selected
  pollutants

14
Brigham city

• Initial impression from RFI was negative due to
  scale
• Freshwater use 8 MM GPD
• Consumptive Water Use 2 MM GPD
• Wastewater Discharge Flow 6 MM GPD
• Solids (TSS) 1500 Pounds/day
• BOD 1000 Pounds/day
• Air Emissions
• NOx 400 TPY
• SOx 60 TPY
• VOC 315 TPY
• PM 170 TPY
• CO 400 TPY
• HAPs 50 TPY
• Solid Waste Disposal 15,000 TPY
• Hazwaste Disposal 8 TPY

15
Brigham city

• Do we REALLY want this???
• Reassurance from trusted partners (GOED, EDCU)
  was helpful to re-engage, even while they
  maintained confidentiality
• Scope of project was cut approximately in half
• Visit with PG (Gold Rush) representatives was
  very positive, helpful, even though we didnt
  know who they were
• Citys initial role was in support of Box Elder
  County
• Transitioned to infrastructure provision later in
  the process

16
Brigham city

• Availability of infrastructure was a key
  consideration
• Water build out and source analysis gave
  Brigham City the confidence that Gold Rush
  could be served and still meet needs in future
  growth areas within the Citys annexation
  boundary
• Sewer planned as a regional facility

17
Suggestions for business recruitment

• Avoid knee-jerk reactions (This must be a big
  polluter!)
• Networks are critically important
• Utah excels at cooperation COOPERATE!
• GOED
• EDCU
• Local EDPs
• Private sector
• Cities and Counties need to be able to cooperate!
• Trust is a key factor
• One-on-one interaction (face-to-face, not just
  electronic) critical to building trust and
  relationships

18
Suggestions for business recruitment

• A can-do attitude can overcome weaknesses or lack
  of polish
• Neither side should anticipate 100 smooth
  sailing, but both sides should commit to working
  through differences
• Take a field trip to a similar facility,
  particularly if it is operated by the same
  company (visit to Cape Girardeau plant helped
  answer lingering questions)
• Be prepared to respond to rumors the Toyota
  thing
• Understand the proper use of consultants and
  experts, and dont be afraid to use them

19
Suggestions for business recruitment

• Invest in infrastructure past decisions by
  elected officials placed Brigham City in a
  position to meet Procter and Gambles water and
  sewer needs
• Understand, honor, and respect confidentiality
  requests
• Hi, Im Paul Larsen, Brigham City Economic
  Development Director. Heres my card, email
  address, phone number, etc. My wifes name is
  Shirlene. I have four kids. I went to USU (go
  Aggies).
• Hi, Im Joe JUST Joe
• Believe in yourself, or no one else will!
• We think we have the best place in the world to
  do business
• County Commissioners need to be able to do
  cartwheels

20
Questions?