UTAH ALLIANCE FOR ECONOMIC DEVELOPMENT

PROCTER AND GAMBLE- A CASE STUDY OF THE RECRUITMENT PROCESS

PROCTER AND GAMBLE

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

PROCTER AND GAMBLE

• First P&G Greenfield site in the U.S. in over 35 years• Box Elder site part of P&G 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

GOVERNOR’S OFFICE OF ECONOMIC DEVELOPMENT

• Full and active support of Governor Jon Huntsman, Jr.• Close partnership between GOED, EDCU, Box

Elder County, and Brigham City EDP’s• Help with State Boards, Legislature• $9 million shortfall to cover infrastructure costs paid

through legislative authorization of loan from Water Quality Board

GOVERNOR’S 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

GOVERNOR’S 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

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

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 P&G

• October 17, 2007 - Procter and Gamble announces selection of Box Elder County

BOX ELDER COUNTY

Four things I learned on the way to the Box Elder County

Procter and Gamble plant.

• Never recruit a company you wouldn’t want your kids to work for.• Teacher: Susan Thackeray

• When it’s 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…….

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 P&G• Years 1-5 – 90% of increment• Years 6-20 – 70% of tax increment• Local economic incentive capped at $31 million

BOX ELDER COUNTY

• Economic Impact Benefits• Net direct benefit to County, School District, other SSD’s

- $7.6 million (20 years)• Net indirect benefit to County, School District, other

SSD’s - $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

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”

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

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 P&G (“Gold Rush”) representatives was

very positive, helpful, even though we didn’t know who they were

• City’s initial role was in support of Box Elder County• Transitioned to infrastructure provision later in the

process

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 City’s annexation boundary

• Sewer – planned as a regional facility

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 EDP’s• 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

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 don’t be afraid to use them

SUGGESTIONS FOR BUSINESS RECRUITMENT

• Invest in infrastructure – past decisions by elected officials placed Brigham City in a position to meet Procter and Gamble’s water and sewer needs

• Understand, honor, and respect confidentiality requests• “Hi, I’m Paul Larsen, Brigham City Economic Development Director. Here’s

my card, email address, phone number, etc. My wife’s name is Shirlene. I have four kids. I went to USU (go Aggies).”

• “Hi, I’m 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

QUESTIONS?