IBM snub can guide Rockford’s rebirth

By Isaac Guerrero

BusinessRockford.com

Peter Provenzano has been stewing ever since IBM announced last month that it would transform a downtown building in Dubuque, Iowa, into a computer services hub for 1,300 highly skilled, highly paid workers.

The Fortune 500 company considered hundreds of U.S. metropolitan areas, then narrowed its list to six cities.

Rockford didn’t make the cut. Why?

IBM officials gave serious consideration only to cities that offered a highly educated labor pool that could sustain its technical services center for years to come, said IBM spokeswoman Jenna L. Gable. Everything else Dubuque offered — a vibrant downtown and riverfront, good public schools, financial incentives that topped $50 million — was a bonus, she said.

“I’m so upset. Wake up, Rockford,” said Provenzano, CEO of SupplyCore, a government procurement firm in downtown Rockford.

“For the last 30 years, decisions made by the city, the county and development community about how to improve this community have failed us.”

Political and economic development leaders in the Rock River Valley are employing myriad strategies to boost education, improve downtown Rockford and make the region more attractive. But Provenzano and other business leaders have their own ideas about how to move the city forward. Those ideas run the gamut from eliminating poverty, turning attention to the city’s aging urban core, and deciding once and for all what Rockford should be.

Provenzano supports any effort to improve Rockford’s education offerings. But that’s a long-term strategy, he said. There are other things the city must do immediately, he said. Specifically, “we’ve got to throw every dollar we can at redeveloping downtown.”

“If all we do is incrementally work toward improving those education attainment statistics, if we think that’s the reason we’re not getting the transformational labor opportunities, then we’ll never get them in your lifetime or mine.”

The right mix
Like Rockford, Dubuque in the early 1980s suffered heavy unemployment and “was nearly dead,” said Michael Blouin, president of the Greater Dubuque Development Corp., the city’s economic development arm.

But about 15 years ago, the city hit upon a determined mix of political leadership and business and civic engagement. The resulting deluge of private and public investment allowed the city to festoon its Mississippi riverfront with an aquarium and river museum, hotel and water-park, casino, convention center, and other amenities.

“We’ve poured more than $300 million into our riverfront and downtown in the last five to 10 years,” Blouin said.

Those efforts pay off because the work force needs to enjoy the community beyond the job, he said. There’s been no secret to the success. The community embraced a single, simple vision of what it wanted Dubuque to be.

“There’s been a very successful effort to rediscover the old Dubuque,” Blouin said. “To make our downtown and riverfront the city’s front door, not the back door.”

Small first steps
Rockford’s high crime and poverty rates are significant obstacles to attracting companies like IBM to Rockford, acknowledges Mayor Larry Morrissey, whose administration touts a motto of “Excellence Everywhere.” Since he was elected four years ago, the mayor has rolled out initiatives big and small to battle everything from littering to neighborhoods infested with illegal drugs and a chronic Rockford School District truancy problem. Morrissey singles out the city’s public schools as a particularly vexing stumbling block.

“That we are not hitting the fundamentals is really not a secret,” he said. “Our challenge for starters is our K-12 education system. When that’s not working, we shouldn’t be surprised that we don’t get a lot of college graduates coming out of our community.”

The mayor is shaping plans for what he calls “City University” to boost the city’s college-educated demographic. He established a steering committee that a year ago began laying the groundwork for a postsecondary education collaborative.

The goal is to wrap the area’s higher education offerings under a single umbrella. Those institutions include Rockford College, Rock Valley Community College and satellite coursework offered by Northern Illinois University, Judson College, Rasmussen College and Upper Iowa University, among others.

“There’s an opportunity for us to have more wealth in our community if we become more educated,” said Janyce Fadden, president of the Rockford Area Economic Development Council and a member of the City University committee.

“In terms of workers with a college degree, the Rockford area is at 20 percentage points,” Fadden said. “For every percentage point your community can gain, you increase the wealth of your community by $238 million. We need to gain seven points to hit the national average.”

The cool factor
Provenzano says he’s a big supporter of the mayor’s City University idea, but it’s no panacea.
“We haven’t done what Dubuque has done, and we’re not all on the same page,” Provenzano said. “For decades we’ve developed out toward the interstate and allowed sections of our city to die off. Without downtown being a more quality place to live, work and play, then all the investments on our perimeter, all the assets on the edge of our community will be worth less 10 years from now. And we will be poorer.”

Icon Development Group chief Chandler Anderson, who serves on the Rockford Housing Authority board of directors, bemoans the “cradle to grave” culture that exists among many living in the city’s public housing and subsidized apartments.

“Public housing is a privilege, it’s not an entitlement,” he said. “We can’t have these runaway social service numbers. The subsidies here go so deep, it’s ridiculous.”

Reducing Rockford’s abundance of low-income housing will make the Rock River Valley a more attractive place to live, said Anderson, who has made a living transforming old Rockford homes into hip, vibrant places to live. He’s revived a historic schoolhouse for his latest venture, Garrison Lofts & Town Homes, on the 1100 block of North Court Street.

“If we want to attract the highly educated people with disposable income, we need to offer them the kind of places they want to live in,” Anderson said.
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Jay Mathur says Rockford’s dilemma is more basic than a struggling downtown or a market saturated with cheap housing.

“We haven’t decided as a region what we want to be,” said Mather, CEO of valueideas.com, a Belvidere consulting firm.

“I keep hearing ‘Excellence Everywhere,’ but what does that mean? Excellence in what? We’re trying to be everything to everybody. That doesn’t work. We need a cohesive strategy to focus our efforts.”

Rockford’s manufacturing base once earned it the nickname Screw Capital of the World. Today, the city’s economy is less reliant on manufacturing and our personal wealth is lower than it was a decade ago. So what, Mathur wonders, do we want to be?

Rockford need look no further for inspiration than IBM, Mathur said. Once known as a maker of typewriters, IBM has remained relevant since its 19th-century beginnings by evolving into a computer hardware, then software company. Today, the company parlays its expertise into consulting and technical services to meet the shifting needs of its customers.

Provenzano doesn’t begrudge Dubuque’s success.

“I do hope that as a community we are willing to learn from them,” Provenzano said. “Right now, everyone in Dubuque is on the same page. They’re a symphony, and we’re a bunch of street corner musicians.”

Assistant Business Editor Isaac Guerrero can be reached at iguerrero@rrstar.com or 815-987-1353.

A tale of two cities
IBM officials said they chose Dubuque because, above all else, it has a highly educated work force with skills that meets its needs. Rockford was never in the running for the $100 million project, local officials say, because our education numbers don’t meet IBM’s needs. Here’s a quick glance at how Rockford and Dubuque compare:

                                                          Winnebago County    Dubuque County
Household population:                                    289,313                      88,512
Population 25 years and older:                      193,962                      59,605
Percent with bachelor’s or higher:                       19.9                           25.3    

                                                                                 Rockford              Dubuque
City population:                                                        155,138                 57,696
Land area:                                                        56 sq. miles        26 sq. miles
Total housing units:                                                  59,158                  38,511  
Rental housing units:                                               23,014                    8,830
Vacant housing units:                                   9,712 (14.6%)      1,622 (6.4%)
Median value of owner-occupied housing:     $115,100                $99,000
Median household income:                                 $37,455                 $40,341
Percent of individuals below poverty level:               20.2                       11.9
Size of labor force (16 years and older):               69,807                  31,314
December 2008 unemployment rate:                     13.2%                     4.9%
Population 25 years and older:                              96,362                  37,212
Percent with bachelor’s degree or higher:                18.8                      26.7
             
Sources: Illinois Department of Employment Security, Iowa Workforce Development, U.S. Census Bureau 2005-07, American Community Survey 3-year estimates.