State economic development leader pays visit

MORRISON – Before Jim Schultz would agree to lead the state's economic development efforts last year, he needed reassurance that the process would change.

Gov. Bruce Rauner named Schultz director of the Illinois Department of Commerce and Economic Opportunity in February 2015, and a year later, the state had a new economic development arm and Schultz had a different job title.

The governor, by executive order, on Feb. 3 announced the creation of Intersect Illinois, a privately funded nonprofit corporation that would use public-private partnerships to recruit business to the state. Schultz is its CEO.

Schultz was in Morrison on Thursday to visit Whiteside County Economic Development Director Gary Camarano and other regional business leaders.

Schultz, an Effingham native, has been an agribusiness entrepreneur and private equity executive and has been involved in starting 40 businesses, two of which went public. A desire to give back was motivation for finally accepting Rauner's offer, he said.

"The governor tried to get me to lead economic development three times before, and the fourth time he got me," Schultz said. "I'm a fifth-generation Illinoisan, and hopes that my three sons will move back here is a large part of why I'm fighting the fight."

Unlike many other states, however, the commerce department was charged with economic development duties, and Schultz didn't think he could get the job done in that capacity. He cited bureaucracy, competing priorities, and inadequate resources as huge barriers to properly marketing the state to businesses.

"DCEO had a good staff, but it became very complex, and programs were being piled onto the department," Schultz said. "About 74 percent of its work isn't directly related to economic development."

The economic data bore out Schultz's argument for change. In 2015, Illinois was ranked 48th for states with the best business climate. It was ranked 40th in job creation, and had 277,000 fewer residents since 2003, and about 62,000 jobs had been lost since 2000.

Since becoming CEO of Intersect Illinois, Schultz has continued to research other states that have implemented similar partnership-based development arms, especially Jobs Ohio, which had lagged Illinois in job creation but has now surpassed it by 40 percent.

"I've studied what other states did well, and some of the mistakes they've made," Schultz said. "I'm a business guy, and I wanted to structure it so it wouldn't be a political tool – I want it to last for a long time."

To date, Intersect Illinois has brought in or received commitments for $7 million in private funding. It's hoped that state money could be brought to the table eventually, but given the ongoing budget situation, the organization isn't counting on it yet.

Schultz fielded a few questions from local development leaders who had assembled in the Whiteside County Boardroom.

"I'm wondering how regional people interact with you, and how the process works, because I'm a process person," Dixon Mayor Li Arellano Jr. said.

Schultz said the most important thing he needs is knowledge of what an area has to offer. His organization currently has a list of 70 companies that are looking to expand.

A local development organization is playing a key role in providing that interface with Intersect Illinois. Greater Sterling Development Corp. is a committee member of a new coalition, Creating Opportunities for Retention and Expansion, which directly works with Intersect Illinois.

"CORE is a very exciting initiative," said Betty Steinert, special project manager at GSDC. "It provides a large database that will be used by development site selectors globally."

Tim Stephens of Wahl Clipper brought up the challenges many rural employers face in recruiting.

"We're in the middle of nowhere, which is great for some, but it's hard to draw engineers and some other professionals," Stephens said.

Schultz said mentorship programs are a good way to keep local talent home.

"Things like the CEO program create a sticky relationship with those born here," Schultz said. "They might leave for a while, but many want to come back later."

Workforce Development Board representatives expressed a desire to work with Schultz, and also put out the call for more training dollars.

Transportation assets

Intersect Illinois CEO Jim Schultz cites transportation, distribution, and logistics as an economic growth area with huge potential. The northwest Illinois region could be one of the biggest beneficiaries. Here are some of the state's biggest transportation assets:

• It's the only state where all seven Class I railroads travel.

• It has the nation's third largest interstate highway system.

• It has five international airports.

• Chicago has the world's third largest intermodal port.