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R-89-1312 - 7/29/1989WHEREAS, the City Council wishes to develop a program for economic development for the City of Round Rock, and WHEREAS, PHH Fantus Corporation has submitted a Proposal For Economic Development Consulting Assistance, and WHEREAS, the City Council wishes to authorize Fantus to proceed with the Core Program, Now Therefore, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS That the Mayor is hereby authorized and directed to execute on behalf of the City an authorization for the Core Program, described in the above mentioned Proposal, a copy of such proposal being attached hereto and incorporated herein for all purposes. RESOLVED this 27th day of July, 1989. ATTEST: NE LAND, City Secretary GbRESCORE RESOLUTION NO. /3/t MIKE ROBINSON, Mayor City of Round Rock, Texas PROPOSAL FOR ECONOMIC DEVELOPMENT CONSULTING ASSISTANCE PREPARED FOR: THE CITY OF ROUND ROCK 221 East Main Street Round Rock, Texas 78664 (512) 255 -3612 PREPARED HY: PHH FANTUS One Prudential Plaza Chicago, Illinois 60601 (312) 819 -0234 REVISED: June 14, 1989 PHH Fantus TABLE OF CONTENTS Page No. LETTER OF TRANSMITTAL KEY ISSUES 1 AN APPROACH TO MAXIMIZE IMPLEMENTATION RESULTS 1 PHH FANTUS QUALIFICATIONS ARE UNPARALLELED 1 SCOPE OF WORK 3 Phase One: Strengths and Weaknesses Assessment 3 Phase Two: Target Industry Identification 5 Phase Three: Development and Remedial Strategies 6 Phase Four: Development of a Three -Year Marketing Plan 7 Phase Five: Implementation Assistance 8 STAFFING 9 FEES AND TIMING 9 OPTIONAL PHASING /FEES AND TIMING 10 AUTHORIZATION 11 PHH Fantus PHH Fantus Thomas 1. Ticknor One Prudential Plaza 312 819 0234 • Corporation Principal Chicago, IL 60601 Fax 312 8191030 June 14, 1989 Mayor Mike Robinson The City of Round Rock 221 East Main Street Round Rock, Texas 78664 Dear Mayor Robinson: PHH It was a pleasure meeting with you and other community leaders to discuss how Fantus can assist Round Rock's economic development program. You have very promising economic development potential. We appreciate very much your interest in our services, and have prepared the accompanying proposal detailing the marketing and implementation assistance we will provide. Please call me after you have reviewed it to let me know if there are changes needed. We will provide you with a practical, market -wise economic development program. Our five -phase proposal entails an objective appraisal of Round Rock's locational strengths and weaknesses; the identification of target industries best suited for attraction into the community; development and remedial strategies to improve and enhance development activities; a three -year marketing plan to convey in a cost- effective manner Round Rock's locational advantages to new and existing companies; and implementation assistance to put into action our development recommendations. Our ability to work effectively with you is based upon the following key strengths: 1. Unique Corporate Consulting Insight Fantus development assistance is rooted in our rich experience as the nation's oldest and largest corporate site selection consultant to manufacturing and service companies. We are not only skilled in data collection and analysis; we also know how employers analyze communities for business growth and locational decision making. 2. Knowledge of Development Activities In Texas Recent site selection and economic development projects in Texas and surrounding states means that we are thoroughly familiar with the competitive environment in which Round Rock is located. As you know, we are currently conducting a regional assessment and marketing program for the Texas Department of Commerce. PHH Fantus One Prudential Plaza 312 819 0234 Corporation Chicago, IL 60601 Fax 312 819 1030 PHH 3. Past Client Satisfaction Fantus economic development recommendations don't sit on the shelf collecting dust. They are implemented and produce results. We look forward to working with you on this vitally important project. Sincerely, PHH FANTUS CORPORATION Thomas J. Ticknor Principal KEY ISSUES Round Rock has a number of assets for successful economic development, including the area's close proximity to Austin, immediate interstate highway access, available sites for development, and strong vocational training opportunities. Although Round Rock has undergone impressive growth in the last two decades, growth has plateaued since 1987. Recent additions to the community's employment base, including McNeilab, Dupont Photomasks, Wayne Division of Dresser Industries, AMP Packaging Systems, and Texas Nuclear, hold promise for a brighter economic future, but leaders believe now is the time to implement a proactive growth strategy to ensure future prosperity. The consulting assistance described below will help the community create even more quality job opportunities for Round Rock area citizens, providing a stronger tax base and a more affluent economy. AN APPROACH TO MAXIMIZE IMPLEMENTATION RESULTS Our approach envisions working closely with a local Steering Committee representing a cross - section of individuals interested in promoting the Round Rock area. This interactive approach will rally leadership behind the development program. Round Rock's economic development program must be clear, forward looking, and focused to ensure its successful implementation. To this end, we produce concise, action - oriented reports that identify priority concerns, facilitate consensus building, and lead to successful results. PHH FANTUS OUALIFICATIONS ARE UNPARALLELED PHH Fantus Corporation is uniquely qualified to assist Round Rock develop an effective economic development program. PHH Fantus is the leader in the field of site location analysis for manufacturing, office and distribution facilities and is the leading national firm in economic development and real estate market analysis. Fantus regularly assists companies in all fields of manufacturing, distribution, and office /clerical activities to select the optimum location. It is estimated that Fantus performs almost 70 percent of all corporate projects involving location consulting. PHH Fantus The City of Round Rock June 14, 1989 Page 2 The Fantus staff regularly assists corporate executives in assessing the difficult tradeoffs in the location decision, and we are privy to the reasoning that leads to the final selection of communities. As a result, Fantus has unparalleled insight into the actual factors influencing corporate location decisions. For example, Fantus knows by industry group which companies are expanding and what real world location factors are of importance to them. Furthermore, during the course of our site searches for corporate clients, Fantus investigators have visited thousands of communities throughout the United States. As a result, Fantus is well qualified to critically assess any given location with respect to its locational strengths and weaknesses, and its preparedness for economic growth. Fantus has worked with many clients in Texas, including: Texas Department of Commerce (ongoing) Plano Economic Development Board Las Colinas Corporation Waco Chamber of Commerce Tyler Chamber of Commerce Houston Chamber of Commerce Huntsville - Walker County Economic Development Council This experience means that we are thoroughly familiar with development issues impacting Texas, the regional context in which you operate, and what your regional competitors are doing. References Provided below are several past client references. Additional references are available upon request: Mr. Curtis Cleveland Vice President Waco Chamber of Commerce P.O. Box 1220 Waco, Texas 76703 (817) 752 -6551 Mr. A.W. Riter, Jr., President Tyler Economic Development Council P.O. Box 390 Tyler, Texas 75710 (214) 592 -1661 PHH Fantus The City of Round Rock June 14, 1989 Page 3 Mr. Robert Farley Deputy Director of Research and Planning Texas Department of Commerce 816 Congress, Suite 1200 Austin, Texas 78711 (512) 320 -9657 SCOPE OF WORK We propose to assist Round Rock's economic development program through the orderly completion of the five -phase action plan described below and shown in the accompanying project flow chart. Our work will begin with a project kick -off and orientation meeting in Round Rock which will accomplish the following: Familiarize PHH Fantus staff with Steering Committee members and other key client personnel to form the basis for continued creative interaction Define and discuss major issues of procedure, data availability, etc. Obtain input from Steering Committee members on perceived strengths and weaknesses of the Round Rock area and key issues and concerns as we move forward. Phase One: Strengths and Weaknesses Assessment A Fantus Strengths and Weaknesses Assessment consists of an objective analysis from the viewpoint of a potential investor considering the area for a new or expanded manufacturing, distribution, or office facility. Our assessment will analyze and evaluate key resources to determine Round Rock's competitive advantages, thereby laying the ground work for targeting of development efforts. The assessment will also identify those factors where the Round Rock area can improve its competitiveness. The end result of the Strengths and Weaknesses Assessment will be a concise summary report evaluating the major economic development strengths and weaknesses of the investment climate in the Round Rock area. The identification of the area's locational assets will be of value to the community in all of its economic development and marketing efforts. The identification of locational weaknesses will also focus attention on those deficiencies most in need of upgrading, so they too can eventually become marketable assets. A Fantus appraisal assures that no factor important to Round Rock's future development is overlooked. We also provide insight based PHH Fantus The City of Round Rock June 14, 1989 Page 4 on our corporate site selection experience so that Steering Committee members understand why these factors are important in attracting and retaining investment and how they affect target marketing choices and development strategies. Scope and Method of Appraisal PHH Fantus will develop specially designed Project Success Factor Questionnaires for the City to distribute and collect prior to beginning our community fieldwork. At the same time, Fantus will conduct a thorough review of various public and proprietary data sources, just as we would for a Fantus corporate client considering Round Rock. The second step of our assessment will involve an intensive series of interviews to gather information on Round Rock's location attributes. A key part of this analysis will be interviews with area employers to determine from their perspective the Round Rock area's operating advantages and disadvantages. Fantus staff are skilled at interpreting employer comments accurately and asking followup questions to pinpoint needs and concerns. We will also seek information from area employers about market and supplier linkages. Fantus will also interview others important in the site selection process including: o Key government officials o Area educational institution administrators o Financial institutions o State economic development staff o Key local economic development organizations o Others deemed appropriate After completion of our local interviews and a review of the information gathered, Fantus will critically assess the area in terms of the key locational requirements of major employment generating facilities. Our assessment will include operating costs, operating conditions, and quality of life factors impacting corporate location and expansion decisions. The assessment will reflect our "real world" experience in locating facilities and working with other development organizations throughout Texas. It will also provide community leaders with a sound, highly credible basis for both marketing and remedial efforts. PHH Fantus The City of Round Rock June 14, 1989 Page 5 Phase Two: Target Industry Identification Fantus has long believed that targeting an economic development program is the best way for a community to achieve maximum results from its development efforts. Some economic sectors are not likely to grow in the Round Rock area in the future and still others are not desirable for the community. There is little point in expending large amounts of limited personnel and monetary resources on low- potential or undesirable sectors. It is clearly more effective to focus resources on those sectors with the highest probability of expanding or locating in the area. This phase will identify the types of businesses that offer the best potential for recruitment and expansion. Our analysis will include each of the major economic base sectors (e.g., manufacturing, administrative offices, etc.). Community leaders will be contacted in order to ensure that community goals, priorities, and experience are built into the target industry analysis. Target sectors will be selected on the basis of the Strengths and Weaknesses Assessment contained in Phase One, on a general analysis of growth trends nationwide and in Texas, and on an assessment of sector desirability for the Round Rock area. Each target sector will be selected based on the following five general criteria: 1. The prime locational advantages of the Round Rock area should correspond to the major determining factors of facility location selection. 2. Requirements for which Round Rock is not strongly competitive should not be significant facility location selection factors. 3. Growth must be expected in the sector and this growth should be likely to occur within Texas 4. The sector must be of sufficient size to be worthy of a concentrated development effort. 5. The sector should be desirable in terms of land use, job quality, economic cyclicality, and long -term development linkages. In order to evaluate the "fit" of potential target sectors, Fantus will evaluate each by industry grouping at the four -digit Standard Industrial Classification (SIC) level. This evaluation will include office - oriented and distribution activities as well as manufacturing industry categories and will include over 500 separate SIC categories. PHH Fantus The City of Round Rock June 14, 1989 Page 6 Screening criteria will be designed so that Round Rock targets industries that: Are growing successfully in Texas Are resistant to cyclical downturns in employment Benefit from regional supplier /market linkages Will have minimal negative environmental impact on the Round Rock area Will raise area average wage rates Have employment characteristics that reflect Round Rock's skill base and training resources Have utility requirements compatible with utility capacity in the Round Rock area Based on this screening analysis, Fantus will recommend eight to ten target sectors for recruitment. Screening of potential SIC categories will be based on data in the Fantus area development database. These include both publicly available data and proprietary Fantus data. In addition, the Fantus Senior Advisory Team, comprised of senior staff with combined experience of over 60 years in site selection, will review each recommended target for its fit with Round Rock's locational characteristics. For each target sector Fantus will provide a list of 25 prospect company names. This will allow Round Rock to immediately begin marketing to companies within the recommended target industries. We will obtain the company names from the most up -to -date commercially available computerized electronic databases. Community leaders recognize that the list of target companies is not a list of Fantus clients, and agree not to represent to any company that Fantus has specifically recommended any location for that company. Phase Three: Development and Remedial Strategies This phase will concentrate on those locational factors which emerged as most unfavorable during the Strengths and Weaknesses Assessment and which, in the judgement of Fantus, are both in the greatest need of improvement and possess the greatest potential for upgrading through concerted action programs by local leaders. The elimination of development obstacles, or at least decreasing their PHH Fantus The City of Round Rock June 14, 1989 Page 7 severity, and instituting programs that make the area more competitive, will enhance Round Rock's chances of being judged favorably for existing industry expansion and new industry attraction. Suggestions for capitalizing on the community's strengths may also be forthcoming. Remedial and development proposals may be administrative, legislative, or resource development in nature. Formulation of each strategy will include discussion of the rationale behind its selection, the specific action plan need to implement the strategy, estimated costs, and potential benefits. Development priorities and timeframes will be established for all recommendations. Of course, all Fantus recommendations will take into consideration existing programs and development strategies. Recommended strategies are possible in some of the following categories: o Capital and financing o Community cooperation o Entrepreneurism o Incentives o Incubators o Infrastructure development o Planning and zoning As a part of this phase, Fantus will also explore economic development organization options. These options will include the formation of a new public /private economic development organization as well as better definition of existing organizations active in economic development. Fantus will present the results of its Phase Two and Three work to Steering Committee members at a meeting in Round Rock. Phase Four: Development of a Three -Year Marketing Plan Fantus will develop a cost - effective marketing plan to convey to corporate executives Round Rock's advantages for corporate investment. While marketing is often seen as something aimed solely at new (outside) business, it is also necessary to alert existing employers that the community is concerned about their interest. Thus, the marketing program would include a variety of retention options for community leaders to use to encourage employers to remain and expand in the community. PHH Fantus The City of Round Rock June 14, 1989 Page 8 In addition to business retention options, this plan will include the following components: A review of existing marketing materials to identify additional materials needed or enhancements to existing brochures. As apart of this review, we will provide advice on how to capitalize on Round Rock's proximity to Austin and at the same time differentiate Round Rock from the Austin area. Advice on developing effective video presentations will also be provided. Detailed recommendations as to the most effective marketing techniques for conveying the community's assets, including the proper use of: networking direct mail telemarketing prospecting trips display advertising videotape presentations A recommended marketing budget and implementation plan. Included in the implementation plan will be a recommended time frame for the marketing program as well as assigned activities and projected expenses by major category. The emphasis in developing a marketing budget will be on identifying cost - effective marketing techniques and approaches. Development of the implementation plan will allow ongoing monitoring of marketing activities to ensure that marketing objectives are being met. A review of existing funding sources to determine the most appropriate sources or methods of funding the recommended marketing activities. Phase Five: Implementation Assistance As a part of this proposal, Fantus will spend four additional consultant days working with community leaders in Round Rock or in Chicago to help implement the marketing program and the remedial and development strategies. This is in addition to the implementation assistance we will be providing in Round Rock throughout the proceeding phases of our work. PHH Fantus The City of Round Rock June 14, 1989 Page 9 Flexibility will be the keynote of this assistance process. Examples of potential assistance include the following: o Facilitate implementation of specific development strategies o Review new promotional materials o Work with advertising or public relations firm retained by the community o Conduct training for local development officials in the site selection process o Give speeches to appropriate audiences to inform community of economic development program recommendations STAFFING Tom Ticknor, Principal, will serve as project manager. Mr. Ticknor's resume is provided in an appendix to this proposal. Additional junior staff will also be assigned to the project. FEES AND TIMING Our fee for the consulting services detailed in this proposal is $51,000. In addition, we will be reimbursed for out -of- pocket travel expenses, the cost of computer usage, communication services, package delivery, and reproduction costs in an amount not to exceed 15 percent of the professional fee ($7,650). This price quotation is valid for work authorized by August 1, 1989. Fees and the reimbursement cap increase 10% for work authorized between August 1, 1989 and February 1, 1990. The work outlined can be completed within 120 days of the project kick -off meeting. We request a 30 percent payment at the time of contract authorization. An additional 30 percent will be due and payable after the completion of Phase Three, and the balance after the completion of Phase Five. Expenses will be billed monthly. PHH Fantus The City of Round Rock June 14, 1989 Page 10 OPTIONAL: PHASING /FEES AND TIMING Should you choose, you may proceed with the program in discrete, separately priced and authorized phases as follows: Core Program ($27,000, plus expenses) Phase One: Strengths and Weaknesses Phase Three: Development and Remedial Strategies Optional Elements: Phase Two: Target Industry Identification ($9,000, plus expenses Phase Four: Three -Year Marketing Plan ($13,000, plus expenses) Phase Five: Implementation Assistance ($6,000, plus expenses) These fees are valid for work authorized prior to August 1, 1989. Fees for any work contracted after August 1, 1989 and before February 1, 1990 would be 10 percent higher. In addition, Fantus would be reimbursed for out -of- pocket travel expenses, cost of computer usage, communication services, package delivery, and reproduction costs not to exceed the following amounts. Core Program Optional Elements Phase Two: Phase Four: Phase Five: $5,000 $1,500 $2,500 $2,500 (Note: These ceiling amounts surpass the originally proposed level of 15 percent of consulting fees, reflecting that travel costs for phased engagements are generated higher than unified ones.) We request a 30 percent retainer at the time of authorization of each phase. An additional 30 percent would be due one month after the beginning of work on each phase, and the balance upon completion of each phase. Expenses will be billed monthly. PHH Fantus The City of Round Rock June 14, 1989 Page 11 You may authorize this project by signing and returning a copy of this proposal. We look forward to undertaking this exciting and challenging assignment. Work Authorized Total Program Sincerely, PHH FANTUS CORPORATION Thomas J. 'Ticknor Principal AUTHORIZATION Before After August 1 August 1 $51,000 $56,000 X Core Program 27,000 29,700 Target Industry Identification 9,000 9,900 Three -Year Marketing Plan 13,000 14,300 Implementation Assistance 6,000 6,600 (Name) Mayor (Title) AUTHOR RD BY: City of Rrnind Rork (Organization) July 27. 19R9 (Date) PHH Fantus DATE: July 24, 1989 SUBJECT: Council Agenda, July 27, 1989 ITEM: 10H. Consider a resolution authorizing the Mayor to enter into an agreement with PHH Fantus. STAFF RESOURCE PERSON: Kathy Mayfield STAFF RECOMMENDATION: Approval. A presentation was made concerning Fantus and their proposal to develop an overall economic development plan for Round Rock at the last Council Meeting. This is an action item requested by the Council at that meeting.