the skinny News from the Lee’s Summit Economic Development Council July 2019, Q4
Note from the President The 2018-2019 Fiscal Year is coming to an end, bringing with it celebrations of pro-economic development accomplishments. This session, Missouri legislators passed a comprehensive package aimed at making Missouri more competitive for attracting new business and keeping existing investment. Governor Mike Parson also signed SB 182, offering a truce in the Border War with Kansas and now all that awaits for the ceasefire to take effect is action from Kansas Governor Laura Kelly. The new fiscal year also brings excitement for growth coming to our city. The National Benefits Center has plans to expand its Lee’s Summit facility this month and the Streets of West Pryor broke ground in May. In the coming fiscal year, the Lee’s Summit Economic Development also plans to announce its strategic plan, which will lay out objectives that the LSEDC will focus on for the next 3-5 years. The strategic plan, made in coordination with the city’s Ignite initiatives, will be the LSEDC’s first since 2014. Our upcoming annual meeting will Focus Forward on the growth to come in 2020. We look forward to sharing with you in the journey as we strive to make Lee’s Summit a prosperous home for new and existing businesses.
Yours Truly,
Events:
Heartland EDC
Creative Blow Mold Tooling Tour Page 2 | Lee’s Summit Economic Development Council
Advisory Board Luncheon
the Rundown Partner Spotlight: MoDOT - Pg. 4 LSEDC Undergoes Strategic Planning Process - Pg. 4 LSEDC Hosts Regional Business Leaders - Pg. 5 Missouri Passes Historic Economic Development Package...Now What? - Pg. 6 Strange Music, Inc. CEO Headlines Speaker's Series - Pg. 8 Workforce Insight: Government Workforce - Pg. 14 McCownGordon Celebrates 20 Years - Pg. 15
Making Headlines
The Lee's Summit EDC and its investors caught the eye of several regional news outlets in the fourth quarter. Publications such as the Kansas City Business Journal, RE Journals, Rebusiness Online and Link 2 Lee's Summit featured development stories taking place in Lee's Summit. Click the icons for a sample.
Welcome to Our New Investors Investor
Benefactor
• MAR Building Solutions • Paychex
• One Source Staffing • Anderson Engineering
Increased Investment • Parrot Properties - Patron
Lee’s Summit Economic Development Council | Page 3
Partner Spotlight: MoDOT Since 2016, MoDOT has led a dozen projects in Lee’s Summit with a total construction value of almost $66 million. From the $13 million Blackwell Road interchange to new $300,000+ traffic signals at Deerbrook, MoDOT’s work is visible almost anywhere you drive in the city. Matt Killion, MoDOT Area Engineer for Jackson County, appreciates the City of Lee’s Summit’s partnership and willingness to find creative ways to pay for projects. “When we all partner together, everyone benefits,” Killion said. “That’s what our Cost Share program is all about-- providing an opportunity to get creative on funding of transportation improvements.” The Missouri 291 Interchange at 50 Highway is one of Killion’s favorite success stories. The city worked to secure voter approval of a bond issue covering about half of the $11.5 million construction cost and then helped secure federal funds for the remainder. MoDOT then administered the overall contract and handled construction inspection for the so-called “diverge-about,” which opened in 2018. The Lee’s Summit Economic Development Council has been busy this spring undergoing its first strategic planning process in five years, an effort that runs parallel to the city’s Ignite! strategic planning process. According to LSEDC President and CEO Rick McDowell, infrastructure investment will continue to be a hot topic as the city works to attract new investment and retain existing businesses. “Infrastructure is identified time and again from our board members and stakeholders as a key priority,” McDowell said. “Communities that win big projects are also communities that intentionally invest in infrastructure. That’s why we are extremely grateful for our partnership with MoDOT and look forward to future collaborations as we work to grow investment and business opportunity in Lee’s Summit.”
LSEDC Undergoes Strategic Planning Process The Lee’s Summit Economic Development Council is tapping the expertise of previous board leadership as it drafts its first strategic plan since 2014. The LSEDC effort is running parallel to the City of Lee’s Summit’s Ignite! strategic planning process in both substance and timeline. Earlier this year, former LSEDC chairs provided insight into the organization’s strengths, weaknesses, opportunities and threats (SWOT). That SWOT analysis was then used to set the direction for LSEDC’s Strategic Planning Advisory Luncheon on May 8, 2019. During the luncheon, Advisory Board members were divided into focus groups and participated in an interactive poll. Each focus group drilled down on one specific topic and table leaders shared insights in a broader discussion led by Tim Paulson of Emery Sapp & Sons. The Benefactor level-and-above investors then received a follow-up survey from LSEDC asking them to prioritize a variety of issues. The information gathered will be considered as the LSEDC considers what will be included in the upcoming 3-5 year strategic plan. Page 4 | Lee’s Summit Economic Development Council
LSEDC Hosts Regional Business Leaders
Missouri Innovation Campus students explain courses to HEDC participants
In April, The Lee’s Summit Economic Development Council was honored to host business leaders from the Heartland Economic Development Course. The course offers intensive training to business leaders on methods and strategies that will support local economic development in their communities. As part of the 5-day conference, 88 participants from six states visited Lee’s Summit to learn how economic development has shaped the city. HEDC students first toured Summit Technology Academy’s Missouri Innovation Campus, where high school students can gain hands-on experience in a high-paying field and graduate high school with an associate degree. HEDC Director James Hoelscher said the innovative collaboration serves as an example of what school district and community partnerships can achieve. “The STA provides an excellent
example of workforce and community development in action. It is an impressive best practice for the economic developers to learn from and model back in their respective states,” Hoelscher said.
our peers throughout the region, and I look forward to collaborating with other organizations in the KC metro on issues and projects in the future.”
The HEDC has a longstanding The group also paid a visit relationship with LSEDC. downtown where they toured Bridge Hoelscher said the unique alliance Space, learned about the efforts to among Lee’s Summit’s major support entrepreneurship in the city stakeholders makes it the perfect and checked out some of the local city for HEDC students to offerings in downtown Lee’s experience. Summit. “I cannot say enough about the There was a familiar face in this service, partnership and attitude of year’s class. LSEDC’s own the entire Lee’s Summit Economic Director of Business Development Development Council, Lee’s Tina Chace participated in the Summit Chamber and Downtown conference to learn about best Lee’s Summit Main Street team. practices and principles to apply Heartland has developed into one from other communities. Chace of the largest and most highlysaid she hopes to apply what she regarded basic economic learned to help continue Lee’s development courses recognized Summit’s success. by the International Economic Development Council,” said “The HEDC intensive course was an Hoelscher. “The onsite tours, invaluable opportunity to learn the panels and networking provided industry’s best practices from some in Lee's Summit helps Heartland of the most respected economic to stand apart from many other developers out there,” Chace said. professional development “The program also encouraged us opportunities offered in the field of to build long-term relationships with economic development.” Lee’s Summit Economic Development Council | Page 5
Missouri Passes Historic Econo Now W Fast-Track Workforce Incentive Grant
In May, The Missouri Legislature passed Se pro-economic development package, which Missouri's competitiveness in attracting and take effect August 28, 2019. The following i
OVERVIEW
Mis
New student aid program designed to fill workforce demand by assisting students in obtaining education and training for occupations deemed as high-demand.
WHAT IS IT? • Grant equal to remaining tuition and applicable fees after non-loan student aid is applied
OVER
WHO QUALIFIES? ELIGIBLE UNTIL • MO residents • 25 or older • Income < $80K for married filers or < $40K for single filers
1. Complete 4 semesters 2. Obtain Bachelor's Degree or 3. Reach 200% time typically required for program
TIMELINE • The Coordinating Board for Higher Education is currently working to establish eligible programs of study • Eligible progams to be established by January 1, 2020
To see a list of potential eligible programs, click here
Page 6 | Lee’s Summit Economic Development Council
Renames the Missouri Works Tr
companies with assistanc
WHAT IS IT? • Allows Department of Economic Development to reimburse companies for training • Allows Department to contract with outside entities to create training project • Gives the Department of discretion to determine how much aid each training program will qualify for (Previous law had 15 percent cap)
REQUIREMENTS • Must maintain new or retain jobs within 5 years of benefit approval • Must remain in Missouri for 5 years after benefit approval
omic Development Package.... What?
enate Bill 68, a comprehensive h includes several measures to improve d retaining investment. The bill is set to is a breakdown of the measures included.
Automotive Incentives OVERVIEW
ssouri One Start
Offers qualifying companies tax credits or the ability to retain withholding tax for auto manufacturers who meet investment and job creation requirements
WHAT IS IT?
RVIEW
raining Program, which provides ce for training programs.
WHO QUALIFIES? Department will consider facors such as: • Potential number of new jobs to be created • Amount of new capital investment in facilities & equipment • Significance of benefits in relocation/ expansion decision • Need of affected community
Agreements made under Missouri Works Training Program remain in effect
WHO QUALIFIES?
• Tax or withholding incentive equal to or less than 9 percent of new payroll
MAX ELIGIBILITY • $5M per calendar year per company in tax credits • 5 years for companies investing $500M • 10 years for companies investing $750M
• Companies who create 10 or more jobs that equal or exceed 100% of the county average wage • Companies that manufacture motor vehicles and have either manufactured a new product or made at least a $500M capital investment in the project facility • Must submit detailed plan to employ racial minorities a contractors who are racial minorities and contractors who employ racial minorities
EXCLUSIONS
TIMELINE
• Company may not simultaneously receive tax credits under the Business Use Incentives from LargeScale Development program
• Tax credits to be issued no sooner than Jan. 1, 2023 • Reduces annual limit on amount of tax credits from $116M to $106M starting July 1, 2020
Lee’s Summit Economic Development Council | Page 7
Lee's Summit Makes " Home for Top
Page 8 | Leeâ&#x20AC;&#x2122;s Summit Economic Development Council
"Strange," Successful, p Music Label Tucked away beyond the main thoroughfares of Lee’s Summit is a hidden empire few, even the locals, know about. For nearly two decades, a music label by the name of Strange Music has been quietly expanding its reign as one of the top independent music labels in the industry. Of course by now, most in the region are familiar with Kansas City rapper, Tech N9ne, who co-founded Strange Music in 2000. But the man behind the music, Tech’s partner Travis O’Guin, played a large role in helping Tech achieve such notoriety. He is also behind the music label’s unconventional location and the Japaneseinfluenced business approach that has proven to be a driving factor of its success. O'Guin was already an established businessman in his own right when he met rapper Tech N9ne back in 1997. O’Guin founded Furniture Works while still attending Van Horn High School; a risky move, he will admit, but he ended up successful, expanding to 32 locations across 18 states. His business ventures eventually led him to invest in Paradise Originals clothing line. As part of an event for the line, O’Guin hired Tech to perform. Following that event, O’Guin
arranged a meeting with Tech with the intention of advising Tech on his business dealings. But O’Guin soon learned Tech needed more than advice. The rapper was entangled in a web containing a total of seven managers and multiple contract obligations. O’Guin, who was already running multiple businesses, decided he was already spread too thin to invest the time, money and effort that would be required to pursue a successful business relationship with Tech, but the two stayed in touch. Then one day, Tech sent O’Guin a song called This Ring, which changed everything. “I couldn’t leave the song alone,” O’Guin said. “My wife has to hate that song to this day because I probably played it a thousand times throughout the entire house.” O’Guin called another meeting to figure out exactly what Tech was interested in pursuing. The rapper revealed he wanted to start a music label called Strange Music. The peculiar name was a tribute to one of Tech’s favorite bands, The Doors. O'Guin was sold. The men joined forces and after more than a year and a half of litigation and millions of dollars in lawyers’ fees to get out of previous deals, Strange Music was born. In the early years, the pair faced
setbacks in distribution, but they were determined not to let that get in the way of reaching their audience. O’Guin shifted the focus to touring where they had tremendous success. Strange Music’s first two albums sold half a million copies. Eventually, a representative from Universal Music attended a Tech N9ne show and in 2006, offered Strange Music a deal. Now Strange Music is the largest label within Universal, a title it has held for the past seven years in a row. Originally, Strange Music with its staff of four people (including O’Guin and Tech) was located in Blue Springs, but the label quickly outgrew the space. O’Guin’s quest for more square footage led him to Lee’s Summit. He bought an old Major Saver building and converted it to his headquarters. Over the course of the past 19 years, the Lee's Summit-based headquarters quietly grew to span 160,000 square feet with more than 60 employees. Strange Music also has offices in the traditional music hubs of New York, Atlanta and at the Dolby Theatre in Los Angeles, but O’Guin said he has never considered uprooting his Lee’s Summit headquarters to any of
Lee’s Summit Economic Development Council | Page 9
those cities. In fact, the CEO said it is the cost of business in Lee’s Summit that allowed him to build Strange Music into what it is today. He said he plans to continue to focus building up Strange Music’s property with the addition of a 60,000 square foot building, something he said the city’s Development Center has been helpful with. “The process here in Lee’s Summit is incredibly smooth in comparison to some other places I’ve built,” O’Guin said. Added space is a constant need for Strange Music because it is more than just a music label. O’Guin embraces a Japanese business model called zaibatsu, where companies strengthen their control of their business by creating branch-off businesses to support it. “A lot of companies here in America, they need investment, they need capital, they’ll go to a bank,” O’Guin said. “In Japan, they’ll buy the bank, so it’s a little bit bigger concept.” With that philosophy in mind, Strange Music recently launched its own distribution arm at its Lee’s Summit headquarters, which also houses accounting, administration, social media, touring, recording studios, video production, editing, a sound stage, merchandise manufacturing, screen printing, shipping, fulfillment, a
construction company and a vehicle washing facility. Those branch-offs proved to be profitable as standalone businesses, many of which are used for contracting with outside business in addition to filling the label’s needs. Strange Music’s headquarters includes a 10,000-square-foot sound stage, the largest in the Midwest. It has been used for KU Medical and Wendy’s Commercials. Lady Gaga also choreographed her most recent performance for the American Music Awards in the Lee’s Summit facility. Whether its rehearsal space or getting their start, many A-List stars have walked through Strange Music’s doors. Rapper Kendrick Lamar toured with O’Guin’s co-founder, Tech N9ne early in his career and Tech’s eclectic style has led to collaborations with Lil’ Wayne, Eminem and more surprising artists like Tech’s idols, The Doors.
Strange Music Co-Founder & CEO Travis President & CEO Rick McDowell and Bo LSEDC's June Speaker's Series
"I have a certain expectation work really hard, you contin things are suppos
-
“Tech is this crazy artist. Everybody thinks that it’s all hip-hop,” said O’Guin. “He’s the guy that crosses over, a genre-bender of sorts. You can’t put him in just a hip-hop box. He’s done a lot of things in rock, he’s done a lot of things in a lot of different music styles, even R&B.” Lee’s Summit may seem to be far removed from the epicenter of the music industry, but in some cases, O’Guin benefits that way. He said he has a strict rule of hiring from outside the music industry. By hiring employees who are skilled in their field but green in the music industry,
Page 10 | Lee’s Summit Economic Development Council
Custom-designed screen print machine wh Music merchandise is printed.
s O'Guin poses with LSEDC oard Chair Machelle Riffe at
n that if you focus and you nue to be a student, those sed to happen."
-O'Guin on Grammy Awards
here Strange
O’Guin has an opportunity to mold them to fit his style of the music business. Even with its all-encompassing business model, the idea of quality over quantity is evident with Strange Music. The label represents more than 20 artists, smaller than many would predict for such a well-recognized entity, but to O’Guin, it is testament to how seriously he takes his artists’ success. “I don’t want to be the jack of all but master of none, so my goal is to get it right with the artists that we take in and really work on their behalf and Merchandise photography studio try to make it happen,” said O’Guin. “If we have enough of an in- Despite Strange Music’s terest to sign you, I feel like we have success, O’Guin said in recent an obligation to help you make a full years, the sense of purpose surrounding his job has career out of this.” changed. While O’Guin said he originally got into the business Artists who do sign with Strange for monetary gain, he now gets Music can expect a rigorous climb thousands of messages from to success. As in its early years, people who say Strange Music's Strange Music still focuses heavily on touring. The label’s artists put on work has saved their lives. more than 430 shows in 2018, 200 of them included O’Guin’s co-found- “This business has a real effect on people,” O’Guin said. “If er, Tech N9ne. Strange Music has even one of those thousands of earned 12 Grammy Awards and emails is true, we won.” Tech himself now has more Top 10 albums than any other rapper of all time, but O’Guin said the accolades O’Guin’s daughter Mackenzie Nicole joined the label in 2015. are just part of the gig. Recently she was diagnosed with Bipolar I disorder and has "People tell me I should be more plans to release an introspective acknowledging of those things," album this summer about her O'Guin said, "But I have a certain struggle with mental illness. expectation that if you focus and you work really hard, you continue “I know that album was therapy to be a student, those things are for her and I hope it’s therapy supposed to happen." for a lot of other people.” O’Guin said. Lee’s Summit Economic Development Council | Page 11
Strange Music's 10,000-square-foot sound stage where Lady Gaga coreographed her AMA Performance
O'Guin has a knack for interior decorating and designs everything from artwork to floor tiles at Strange Music Page 12 | Leeâ&#x20AC;&#x2122;s Summit Economic Development Council
The doors of Strange Music's recording studios weigh 385 pounds for greater sound control
Each room of Studio A in Strange Music's recording studio are placed on rubber pucks for sound-proof purposes
Merchandise warehouses store anything from branded t-shirts, commemorative coins to shoe strings
A portion of Strange Music's touring and shipping fleet
A piece of art painted by Rob Pryor on stage during a Tech N9ne show.
Plague recognizing Platinum certification of Tech N9ne single, Caribou Lou Leeâ&#x20AC;&#x2122;s Summit Economic Development Council | Page 13
Workforce Insight:
Government Workforce Robert Cowan is the Director of the National Benefits Center (NBC), U.S. Citizenship and Immigration Services (USCIS), part of the U.S. Department of Homeland Security The NBC is headquartered in Lee’s Summit, MO. LSEDC recently spoke with Robert Cowan, Director of NBC to learn more about the growing cadre of government workers in Lee’s Summit.
Q: Tell us about your local operations. A: Our mission at USCIS is to administer the nation’s lawful immigration system, safeguarding its integrity and promise by efficiently and fairly adjudicating requests for immigration benefits while protecting Americans, securing the homeland, and honoring our values. The NBC’s role in that mission is twofold.
on a variety of applications. These include Applications for Employment Authorization, Travel Documents, and Intercountry Adoptions. In Fiscal Year 2018, the NBC processed over 2.4 million applications.
Q: What factors have led to your growth in the region?
A: After 9/11, the government has focused more intensely on ensuring that law-abiding immigrants who seek legal channels into our nation First, we prepare certain are met with the necessary scrutiny applications for immigration so that we do not admit individuals benefits from people who who seek to do our nation harm, are USCIS will interview as part of threats to public safety or are the decision process. USCIS attempting to perpetrate fraud. That conducts these interviews at over is one of our key roles and has 80 USCIS Field Offices around contributed to our growth. In the country. The primary applica- addition, over the years, we have tions we prepare are Applications taken on additional functions that for Naturalization (i.e., citizenship allow us to support the Field Offices applications) and Applications to we service. Register Permanent Residence or Adjust Status (i.e., “green Q: Tell us about your current facility card” applications). We prepare expansion plans. them by establishing that applicants are prima fascia A: We are planning to add 40,000 eligible for the requested benefit square feet of office cubicle-type and conducting security checks. space to our local operation (in the south building of the Summit Second, we make final decisions Technology Campus) in July of this Page 14 | Lee’s Summit Economic Development Council
year. That will bring our total Lee’s Summit office to about 300,000 square feet. We have another 120,000 square feet at Rosana Square in Overland Park.
Q: Are you planning to hire new employees to fill that space? A: Between our two sites, we have about 950 federal workers and about 1,400 contract workers across two shifts. We have received authority to hire another 70 people on the federal side in Fiscal Year 2019. Those workers are being split between our Lee’s Summit office and our Overland Park location.
Q: What are the positive aspects of doing business in Lee’s Summit? A: We love the Midwest work ethic. Our work is very missiondriven and collaborative. The workforce is strong, and we have had great luck finding great employees and keeping turnover low for our full-time federal positions. Contract positions are a little harder to fill because they’re more transitory. Lee’s Summit’s central location works well for us from a time-zone perspective, and there is good infrastructure in place.
McCownGordon Celebrates 20 Years In June, McCownGordon celebrated its 20th anniversary with the grand opening of a new headquarters in Kansas City. The LSEDC Benefactor investor got its start in 1999 when co-workers Pat McCown and Brett Gordon left their jobs to create their own firm. Since then, it has grown to more than 400 associates and expanded to three office throughout the Midwest. CEO Ramin Cherafat worked
with founders McCown and Gordon before they began their own business. He says since its inception, McCownGordon has set itself apart from others in the industry by setting a razor focus on people and culture.
problem-solvers who are willing to work together for the common good,” Cherafat said.
McCownGordon is excited for what its new headquarters will bring. The new building doubled “When you do that, I’m a really its size and offers both individual strong believer that you get office and collaborative “The bigger better customer service,” workspace. While the we get, the Cherafat said. dust is yet to settle on the more humble new building, McCownwe need to Gordon is not shying Not only does McCownGorbe." don pride itself on creating away from looking to the associate engagement and future. Cherafat said he a positive work culture, it also gives still believes there is room for the employees a financial incentive as a company to grow in the Kansas 100 percent employee-owned comCity region and in the Midwest. pany. But no matter how large the company gets, Cherafat said he Throughout its 20 years, McCownhopes to keep one thing in mind. Gordon has been part of several projects in Lee’s Summit. Cherafat “The bigger we get, the more said he is proud to be part of what humble we need to be,” he describes as a progressive Cherafat said. “There is no doubt community. our success is due to our team members.” “That community is made up of Lee’s Summit Economic Development Council | Page 15
2018-19 Board Members
LSEDC Annual Meeting With Special Guest Kate McEnroe
Kate McEnroe is a full-service location selction and economic development consultant. Since founding Kate McEnroe consulting in 1993, McEnroe's corporate clients have included leaders in the healthcare, business services, telecommunications and metals industries, along with family-owned enterprises and membership associations.
Wednesday, July 10th, 2019 11:00 am to 1:00 pm The Stanley | Downtown Lee's Summit Sponsored By:
Save the Date: July Hump Day Happy Hour
Machelle Riffe Chairwoman Chip Moxley Vice Chair Tim Paulson Secretary Larry Hillier Treasurer Keith Asel Past Chair Bill Baird Mayor Steve Arbo City Manager Dr. Dennis Carpenter Superintendent, LSR-7 Will Coates Board Member Julia Hampton Board Member Linda Harrelson Board Member
Wednesday, July 17th from 4:30 pm to 6:30 pm Llywelyn's, Downtown Lee's Summit (back room)
Clint Haynes Board Member
August
Todd Haynes Board Member
Hump Day Happy Hour
Mike Lally Board Member
Wednesday, August 21st from 4:30 pm to 6:30 pm Llywelyn's, Downtown Lee's Summit (back room)
September Hump Day Happy Hour
Wednesday, September 18th from 4:30 pm to 6:30 pm Llywelyn's, Downtown Lee's Summit (back room) Lee's Summit Economic Development Council
816.525.6617 | 218 SE Main Street, Leeâ&#x20AC;&#x2122;s Summit, MO 64063 | leessummit.org
Eric Mann Board Member Loren Williamson Board Member