Talk Of The Town
A Prestigious Group Of Community Leaders Tackles Columbia's Most Pressing Issues
by SANDY SELBY
photos by L.G. PATTERSON
If Columbia put together a think tank to puzzle out the city's stickiest issues, it would look a lot like the group that gathered in the new offices of Inside Columbia's CEO on Dec. 1. Fifteen local business and community leaders came together for a delicious lunch prepared by Sycamore's Chef Mike Odette, and a rapid-fire discussion led by Inside Columbia's CEO Publisher Fred Parry.
The Year In Review
The discussion began with a glance back at 2011. Parry asked for an end-of-year assessment of Columbia's economic health.
Business owner and Regional Economic Development Inc. Chairman Dave Griggs admitted, "2011 was not quite as good as I predicted it would be." He is encouraged, however, by the buying trends he's seeing at Dave Griggs' Flooring America. "The thing that's most impressive to me is that consumers are actually buying products and that speaks well to all of us because we are all, directly or indirectly, driven by the consumer making purchases."
For many of Griggs' customers, those purchases have been a long time coming. "When we install a floor, we send out a survey and one of the questions we ask is: How long ago did you buy a floor? It's amazing how long people waited to purchase a floor."
MFA Oil President Jerry Taylor is seeing a similar trend in his business. "We're partners with Big O Tires, which is owned by Sumitomo, the largest tire distributor in the world. One of the indicators we follow is when somebody buys a set of tires and leaves the old tires; we measure how much tread is on those tires so we can tell how long people waited. As of this morning's phone call, we are at a number that has never existed in that measurement. People are waiting longer to buy that one product than they ever have before."
Accountant Bob Gerding classifies 2011 as "a flat to improving year." He has observed businesses becoming more conservative in their business practices. "I think they're holding the line on spending and new investment. I do sense a kind of deferred buying urge, but I don't know if it will happen in 2012."
Gerding said there seems to be a nervous "wait and see" attitude among business owners about what moves the state and federal government will make.
Columbia Insurance Group's incoming CEO Gary Thompson agreed. "I think it creates a whole lot of uncertainty that has everybody just sitting on the sidelines waiting to see how this shakes out."
Randy Coil of Coil Construction said his business has changed dramatically since 2006, when about 80 percent of his construction projects involved retail businesses. "By 2011, that's probably less than 10 percent of our business. However, we're starting to see retail creep up a little bit. Most of our business now has gone from new construction to more additions and renovations, primarily in health care and offices. There is some pent-up demand that people have to make some moves, and we've seen them come in and check that out. But a lot of people are still waiting for that big move."
Chamber of Commerce President Don Laird was among the most optimistic at the table. "I think it's a really exciting time," he said. "I feel very good about it — everything from conference alignment to businesses looking to open. I think we've got a solid downtown and certainly our retail side seems to be doing OK."
City Manager Mike Matthes was also looking on the bright side, and with good reason — he's seen the sales tax figures for 2011. "In 2011, it's up three times over what we hoped for. We budgeted for a 2 percent increase and it looks like it's going to be more than 6 percent. That's a good thing for the city, obviously, but it's a really good thing for the community. What we haven't done yet is tweeze out which industry that is. We're pretty sure it's not spread evenly across everything and we're digging into those numbers now."
The Long View
Parry asked some long-term Columbia business people to assess Columbia's economic evolution over the last decade.
Bob Pugh, CEO of MBS Textbook Exchange, said that a much-hailed newcomer to Columbia's economy has presented something of a challenge for his business. "IBM. We've lost some of our middle-skilled customer support people, technically trained, and it's bringing our costs up. We've had to make moves to protect the skilled positions."
Pugh says there's no shortage of candidates for the entry-level positions at MBS, and the company is seeing older applicants and workers who are seeking second jobs. The company also hires a lot of immigrants and refugees, and employs people from 34 different countries. But he is dismayed that local high school graduates seem ill-prepared for the world of work and often score poorly on the company's simple pre-employment test.
"So many kids graduate from the public school system and are not prepared to work anywhere," he said.
It's not just education, according to Socket's George Pfenenger. It's mindset.
"Once people are in our organization, I really have no idea what education background they had," he said. "I couldn't tell you what degree any of our executive staff has. Skill is important in a particular area, but in our industry, people who have been there a long time largely aren't doing anything close to what they were doing when they started with us. So it comes back to mindset and things like work ethic and willingness to take risks. I don't want to downplay the importance of that piece of paper because I think it is important, but absent mindset, I don't care about skill set."
Taylor believes Columbia has weathered the recession far better than other communities in the state. "When you see the economy contract, an awful lot of people who live in rural areas who are not property owners or producers — they're laborers and workforce — those people get really, really hurt. Consequently, southern Missouri has been hard hit. Columbia has acted more like a large city, insulated. All indicators that we see say that, at best, this is a very divided economy, and that the people we do business with are having a real hard time."
Paul Land specializes in commercial real estate and has seen Columbia at the best of times and worst of times. He thinks the city is beginning to move out of its commercial real estate inertia. He does find it shocking, though, that so many of the properties he's selling now — five out of nine current contracts — are bank-owned properties.
"But Columbia fares far better than some other Midwestern communities," Land said. "And we've had places fill up rather than holding occupancy levels stagnant or going backward. That's encouraging because it's taken a lot of flexibility — shorter terms, less rent — but it's keeping businesses open."
It's not all good news. "Land prices have cut in half, or maybe worse," he said. "Any investors who are willing to come off the sideline are only looking at investment property, only things that have income."
Words For The President
With the University of Missouri on the verge of naming its new president, the roundtable participants had some helpful advice to share with the newbie.
"His or her top priority, I hope, will be continuing to protect, defend, support the quality of education at the University of Missouri," said Stephens College President Dianne Lynch. But she admits that won't be easy. "The higher education landscape is facing a perfect storm. The landscape of higher education is shifting beneath our feet and the challenges are going to be enormous. Distance learning, for example. I can make the argument effectively that my students have a very different learning experience at Stephens College that they cannot replace with a computer online. It's very difficult to make that argument with freshmen at the university when there are 500 or 600 students in lectures, because they're already distance learning. Why should that have to be in that lecture hall? What does seat time mean? All those metrics are going to become pressing. The new leader of the university is going to be looking out on a landscape that asks and demands a whole new set of questions and answers."
"I think Dianne said a really important thing when she used the word 'quality,' " said state Rep. Chris Kelly. "Politicians always want to talk about access to higher education, but the question becomes: Access to what? The university right now is doing a fantastic job with enrollment, but it's also eating us up. It just doesn't have the money it needs to support the kind of really complex, important research that's going on there. We've got to have more money for the university."
Business owner and former University of Missouri Curator Tom Atkins says the days of "town and gown" are behind us. "We've got to work with the university," he said. "The university is willing to work and has been working very well with the community and the largest organization represented on the Chamber of Commerce is the University of Missouri. Too many people take it for granted and we cannot take our assets for granted. We have all kinds of opportunities to make this town even better than it is, and we've got places we could do better, but the university is key."
"The No. 1 cheerleader for the University of Missouri" — that's how state Sen. Kurt Schaefer describes the job of the incoming president. "You're not there to carry anybody's water except the university and you've got to call it like you see it." Schaefer shared some dire predictions for the state's budget in 2013, when increased federal mandates coupled with the loss of $400 million in one-time federal money will mean even more cuts for education. "Whether it's the governor or the General Assembly, when someone is not supportive of the university, the president needs to call it like they see it."
Taylor worries that some of the university's best programs could fall victim to the budget squeeze, including the Food and Agricultural Policy Research Institute, or FAPRI. "It is a premier research unit at the University of Missouri that is in dire threat right now. The research that is done here is counted on by all states. FAPRI is literally on its last legs. They've lost three of their top researchers and they cannot get their projects done. I think we're at the point of taking the muscle off the bone. You're no longer dealing with just the fat."
Now Boarding
Thompson broached the subject of Columbia's airport, where passenger service is down to just two flights a day. Parry asked the group if guaranteed seats from the major institutions and companies in Columbia would be an option that might preserve quality air service for the city.
"We've had, in this past year, the opportunity to create probably 500 good jobs in our community that aren't here because of the airport in both cases," Griggs said. "People need to get their people to Columbia. We're going to have to spend the money to get the flights in here and make a significant contribution locally to infrastructure and the terminal. If we get the service, we'll have the passengers."
City Manager Matthes pointed out that progress is already underway. "We're spending $35 million right now to improve the airport. The taxiways are getting rebuilt, and the off-ramp on the highway. That doesn't bring in new planes but that's important. You have to have the gates to get the planes because the point is we want to have more than one plane at a time on the ground. I feel very confident we can add destinations, whether it's Dallas or Chicago or Denver or somewhere, but the terminal is the key piece and that's $14 million we don't have today."
Coil believes there needs to be a cultural shift in perception of the airport. "There needs to be some education about it," he says. "We need to convince people that the airport is a good idea."
"Everybody at this table is going to be asked about seed guarantee money," Gerding said," and I think until the university and business community step up and provide some revenue guarantee for these airlines, I don't think they're going to talk to us a whole lot. I think that conversation is coming and we need to be ready for it. It's going to be a pretty big number if we're going to attract these airlines. If we don't, I think we're going to be at zero flights."
The timing may be right to approach the business community, according to Thompson, who points out that "you can't fly hardly anywhere out of St. Louis anymore, and it's no picnic driving up and down I-70. It's becoming more dangerous, more crowded, and obviously we know about fuel prices."
Parting Thoughts
Land took the opportunity to praise Columbia's leadership. "I want to thank the mayor and our city manager," he said. "I think they brought a real nice business attitude to the city, and they're taking on real issues now and not hiding behind things that don't make a difference to our community."
But Matthes had little time to bask in the glow of that praise as Taylor offered his perspective.
"I'd like to see a continued effort on the part of the city to somehow analyze vendors who pay taxes versus people who come into our community and make bids and contribute nothing," Taylor said. "I know the city went on a campaign to get people to buy locally. The city is pathetic at it. You're not practicing what you preach and you're placing no value on something value should be placed on."
"How was that honeymoon, Mike?" Parry asked the new city manager.
"I'm feeling the love," Matthes said.
CEO Roundtable Participants
Tom Atkins
President
Tom Atkins Investments
Randy Coil
President
Coil Construction
Bob Gerding
Principal
Gerding, Korte & Chitwood
Dave Griggs
President
Dave Griggs' Flooring America
Chris Kelly
Missouri State Representative
Don Laird
President
Columbia Chamber of Commerce
Paul Land
Principal/Owner
Plaza Commercial Realty
Dianne Lynch
President
Stephens College
Mike Matthes
City Manager
City of Columbia
George Pfenenger
President & CEO
Socket
Bob Pugh
CEO
MBS Textbook Exchange
Billy Sapp
Developer
Club at Old Hawthorne
Kurt Schaefer
Missouri State Senator
Jerry Taylor
President
MFA Oil
Gary Thompson
Incoming CEO
Columbia Insurance Group
This CEO Roundtable was sponsored by Auto Owners Insurance and Beckett Taylor Insurance Agency.