DavenportOne celebrated its first year in business last week, emphasizing a theme that it is not just for the city's big businesses and their leaders.
At its annual meeting July 11 - attended by nearly 300 members - the organization rolled out a new Web site (http://www.davenportone.com), recapped its achievements and goals, and announced that it had exceeded its target for a major fundraising initiative.
Most striking was a pronouncement by DavenportOne past chair Dan Portes. He said the organization - formed in March 2000 from four previously independent downtown groups and one chamber of commerce - realized that it needed more than a business focus.
"We wanted a bigger tent," he told the assembled members, and DavenportOne consequently began focusing on issues with broader appeal: growth, prosperity, and quality of life.
At a press conference immediately following the event, Portes supported that with an even stronger statement: "DavenportOne represents all of Davenport."
That sentence is clearly premature.
The organization focused so heavily in its first year on establishing an image and raising money, critics claim, that small and new businesses were left out. DavenportOne, by emphasizing big-ticket projects such as the marketing of an industrial park and the River Renaissance on the Mississippi downtown-revitalization project, didn't put enough resources into nurturing small businesses.
And because much of DavenportOne's money comes from big employers - in dues and contributions - it's only natural that those interests get represented in the group's leadership and agendas.
DavenportOne's board of directors is about as homogenous as can be, with two racial minorities and three women among its 33 members, most of whom are the old-guard power brokers.
Critics maintain that there has not been a consistent interest by DavenportOne in issues important to the rest of the populace. The group remained oddly silent on two major issues that engaged the rest of Davenport and seem to fit comfortably on DavenportOne's list of goals: the loss of professional baseball at John O'Donnell Stadium with the sale of the Quad City River Bandits following unsuccessful negotiations between the team owner and the city on upgrading the facility; and the contentious debate about the nature of Davenport's northeast-corner retail growth when developers and the city were haggling over the details of a new Super Wal-Mart store.
Add to that the lingering concern that DavenportOne represents little more than more of the same: revitalization plans that don't get done or don't bring the anticipated results, and business tunnel vision that excludes much of the city.
Portes acknowledges DavenportOne's shortcomings, such as a lack of board diversity and inattention to small business. "Everyone has a petunia garden, and everyone wants it watered," Portes told the River Cities' Reader. "I think we need to water some petunia gardens. [But] it's hard to do everything at one time."
DavenportOne hasn't given itself an easy task for the next four years. Now that its fund drive is complete, the organization will need to make good on its promises for what that money will buy: good jobs, accelerated growth in property and sales taxes, and a vital downtown.
Those are lofty goals, and not meeting them could be catastrophic for DavenportOne.
"We're scared," Portes said. "We're scared because we don't want to fail."
Success or failure will be easy to determine. "We wanted to define some specific goals [for DavenportOne] and achieve them," said Dana Waterman, the new chair of the organization's board. Until those goals are met, he said, "we don't have the right to go back and ask people to invest."
"We want to be judged," Portes said.
Don Decker, a DavenportOne board member from Robert W. Baird & Company, said the organization has gotten a lot done in its first year, raising money and public awareness and developing goals and a strategic plan. "A year's not a very long time," he said. But the organization has done "a nice job of putting itself up-front. ... We've got a good start. ... What we're seeing is a lot more than we were seeing two or three years ago."
But over the next five years, "we'd better produce. ... Now the real question is, Can you deliver?" he said. "I'm not sure ... these attorneys [on the DavenportOne executive committee] know how to make things go."
"We had to have capital"
DavenportOne was created out of five development-themed organizations last year: the Davenport Chamber of Commerce, Downtown Davenport Development Corporation (created to govern the use of the Self-Supporting Municipal Improvement District [SSMID] taxes that property owners downtown imposed on themselves), Downtown Davenport Association (which ran promotions and events for downtown), Rejuvenate Davenport (a not-for-profit development and demolition company for downtown whose 501(c)(3) status was transferred to the DavenportOne Foundation for fundraising purposes), and Davenport Central City Partners (the newest group, formed to oversee downtown development).
The reasons for creating one large organization were many, but primarily leaders were frustrated about overlapping work and leadership, conflicting goals, and a dearth of growth.
Leaders "were getting tired," Portes said. "A lot of us were talking about the same types of things." While there was much activity, there wasn't a lot of progress, he said.
The Quad City Development Group did a great job bringing prospects to the Quad Cities, Portes said, but Davenport's business leaders "weren't very convincing" in closing the deals. (Critics are concerned that those same business leaders are still in charge; DavenportOne's board of directors is largely made up of the leaders of the five previous organizations.)
The fractured nature of the business community also made it difficult to determine whose efforts were getting results and whose were not. "I don't know which source to hold accountable for which result," said Dan Huber, DavenportOne's president and CEO.
While consolidation created a more unified front, it was not enough. "We knew we were grossly underfunded," Portes said.
"The board knew even before the consolidation that we needed a breakout funding strategy," Huber said. "We had to have capital."
The answer was the D1 Initiative, which was launched in January to raise $3.75 million. Although DavenportOne was still less than a year old without much of a track record, the fundraising campaign exceeded its goal by nearly 7 percent.
"It surprised me that we were able to raise $4 million," Decker said. "People want something to happen, and they're looking for leadership."
DavenportOne's budget for its first year was approximately $1.2 million, and the D1 Initiative will add $900,000 a year to that figure.
How that money will be spent is going to be determined by the board of directors over the next month or two, Huber said. He added that about 60 percent of the money will be used for economic development: job creation, downtown development, amenities, and eventually investment in a planned "sports district" encompassing John O'Donnell Stadium and the Quad City Sports Center. The remaining 40 percent will be used in the areas of what Huber termed "image," "government effectiveness," and "infrastructure."
Those terms and how they translate into expenditures are unclear at this point, but DavenportOne has set for itself a series of goals that will be easy to judge. "Those who were giving wanted to know, 'What are we getting [for our money]?'" Portes said.
By July 2005, after four years of activities funded by the D1 Initiative, DavenportOne projects that:
· Davenport will have 5,000 new "primary" jobs - meaning high-paying positions;
· the rate of annual growth for the city's assessed property-tax base will have jumped from its current 2 percent to 3 percent;
· the rate of sales-tax growth will move from its present 2 percent to 3 percent annually;
· the Eastern Iowa Industrial Center will host five new industrial tenants resulting in 200 jobs;
· occupied space in downtown Davenport will increase by 250,000 square feet; and
· downtown employment will increase by 10 percent, from approximately 7,700 in 2001 to nearly 8,500 people.
Huber also said that DavenportOne will continue to seek funds and business-friendly policy changes from federal, state, and local governments. He said the group will continue to have a lobbyist (hired for the Vision Iowa process) to work on state issues.
Some items on the DavenportOne agenda will clearly have a direct impact on reaching some of the goals, such as a lease buy-down program downtown, contributing cash to encourage businesses to locate in the central city.
Yet other efforts and programs won't have such a direct cause-and-effect relationship.
A fundamental question is whether it makes sense to credit or fault DavenportOne if the goals are exceeded or not met. So many factors influence the fate of the economy, and most of those are out of the control of organizations such as DavenportOne.
But several DavenportOne leaders said the goals the organization set will be a fair measure of the group's work.
"There's not always a direct correlation, but there is a relationship," said John Blong, chancellor of the Eastern Iowa Community College District. Blong, who just retired from the DavenportOne board, added that investors won't blame DavenportOne if the economy goes sour and the organization's goals haven't been met. "If the economy goes to hell, nobody looks good," he said. When crafting goals such as those for the D1 Initiative, one assumes a neutral economic environment, he noted.
It's also clear that the goals are not fixed. When the D1 Initiative was announced in January, promotional literature promised sales taxes in 2004 of more than $84 million. But if annual sales-tax growth increases a quarter percent every year - thus reaching the revised goal of 3-percent annual growth - annual sales-tax revenues will be less than $78 million in 2005.
Huber said the DavenportOne board did modify some goals. In addition to changing the sales-tax figure, the board switched from a vacancy-rate measure for downtown to an increased-occupied-square-footage target. This change would favor the development of new office space - which is planned as part of the River Renaissance project - over just filling existing vacancies.
"In some cases, they modified the goals based on further study," he said. "We want to have measurement. It's not easy in our line of work."
Future changes might also be made, he said, depending on the economy. "If there are forces [dramatically affecting the economy] well outside of DavenportOne, the board would have to adjust the goals," Huber said. "That doesn't dissuade the board from some form of measurement."
But it does make the measurement less meaningful.
Judging Year One
Evaluating DavenportOne's first year is easy in some ways; any organization that can raise $4 million in six months is doing something right.
DavenportOne's annual report - which does not include information about its revenues or expenditures - showcases a list of what leaders consider their freshman-year accomplishments:
· helping secure Sentry Insurance's new location at 53rd Street and Utica Ridge Road by advocating the use of Tax Increment Financing (TIF) as a development incentive;
· the preparation of the Eastern Iowa Industrial Center at Interstate 80 and state Highway 130 for commercial tenants;
· the creation of the River Renaissance proposal for the state's Vision Iowa program;
· the approval and design of two new parking buildings downtown, funded in part by $1 million from downtown's SSMID taxes; and
· the creation of the Leadership Davenport program, a six-month training series that recently graduated its first class of 25 people.
While the list is impressive, DavenportOne's role in the different projects varied significantly; only with Leadership Davenport and the D1 Initiative was DavenportOne the lead or only agency.
DavenportOne did play a major role in the crafting of the City of Davenport's application for $34 million in Vision Iowa funding.
An October 2000 opportunity analysis done for DavenportOne by Madison, Wisconsin, based consultant Brian Vandewalle served as a starting point for the city's River Renaissance application; many of the concepts and projects in the final application were drawn from the early analysis. (Vandewalle was paid $27,000 for the study and continues to have a month-to-month consulting agreement with DavenportOne totaling thousands of dollars a month. Huber said his organization will continue its relationship with Vandewalle through at least June 2002. DavenportOne declined to disclose how much Vandewalle is paid on a monthly basis. The City of Davenport also hired Vandewalle and paid him $66,000 for a first draft of the Vision Iowa application, even though that document was not adequate, according to city officials. DavenportOne, the city, and grant-writers at the Eastern Iowa Community College District finished the application under tight time constraints.)
But even the Vision Iowa application cannot be considered an unqualified success. While Davenport is in negotiations to determine how much of its $34 million request is going to get funded by the one-time state program, it appears unlikely the amount will be much more than $20 million. That leaves a significant funding gap.
"I'm still afraid that outside of the Vision Iowa money, where is the rest of the money coming from to do what we need to do downtown?" Decker said.
At its annual meeting, DavenportOne also specifically noted two projects as proof of its first-year success: the location of Sentry Insurance in Davenport and the Eastern Iowa Industrial Center.
"We hit a really big home run this past year" with Sentry Insurance, Portes said during the annual meeting.
Portes was still taking up the Sentry deal in an interview with the River Cities' Reader the next day. "We were at the forefront."
Huber, however, backed off such statements in an interview Monday. "We had no direct contact [with Sentry] at all," he said. "Our role was to provide some support among businesses to have Sentry locate in our community" and to publicly push for the use of Tax Increment Financing for the project. "We felt those jobs were important jobs to keep in our community," Huber continued. "Our role is to say so with the policymakers."
Even if DavenportOne had been a leader in luring Sentry to the city, the impact on the local economy is questionable at best. Sentry had leased an office in Moline from Deere & Company but decided it would move. In October 2000, the City of Davenport approved $3.7 million in state and local incentives for Sentry to move from Moline across the river to Davenport. "It wasn't a net gain for the Quad Cities," Portes conceded.
City leaders claim the deal prevented Sentry from leaving the Quad Cities. But according to Quad City Development Group Vice President Rob Lamb, Sentry determined early in the re-location process that it wanted to stay in the Quad Cities. [See "Sentry Deal Raises Questions on Incentives," River Cities' Reader, Issue 290, September 27, 2000.]
The Eastern Iowa Industrial Center, on the other hand, is hard to call a success before it has a business tenant. Developed by the City of Davenport, the site was purchased last year by the Greater Davenport Redevelopment Corporation - which includes the city, DavenportOne, Scott County, and MidAmerican Energy. DavenportOne is paid $125,000 a year by the Greater Davenport Redevelopment Corporation to market the site's lots and hired a staff person to work exclusively on the industrial-park project.
While the Eastern Iowa Community College District opened its Manufacturing Technology Center on the site last month, DavenportOne has yet to land an industrial tenant for any of the eight lots.
Huber said DavenportOne expects to have the center's first tenant before July 2002, and another by July 2003. Leaders of the Greater Davenport Redevelopment Corporation said in summer 2000 that they expected it to take between seven and 10 years to sell or lease all the land in the industrial park.
Yet Huber appears to be backing off any promises for results. "The industrial sector is really slow right now," he said. "It's going to take some time to get the pump primed."
"I think it's going a little slow," said Ward 2 Alderman George Nickolas.
In other areas, DavenportOne sent some mixed messages. Although largely a symbolic gesture, the cooperation between DavenportOne and Quad Cities Interfaith on the issue of comprehensive planning showed the organization could find common ground with a group that some describe as having a conflicting agenda.
Yet there were several issues about which DavenportOne stayed mute, including the new Super Wal-Mart store and the looming departure of professional baseball from John O'Donnell Stadium.
One might have expected some comment from DavenportOne on the Wal-Mart debate. Given its stand supporting comprehensive planning and asking the city to hire an outside agent to facilitate the process, DavenportOne could have supported those who felt a bigger Wal-Mart store in Davenport should have been opposed. Portes is up-front about how retail businesses don't add much to the local economy. "Growth to us is not retail," he said. "Retail is going to come where people are. ... We don't need to do anything."
Huber said that DavenportOne is learning to pick its spots, and that the Wal-Mart struggle is part of the larger issue of managing and planning for growth. "We've had to discipline ourselves to not jump on any issue of the time," he said. "We've emphasized the comprehensive plan. We've got to get out ahead of it" rather than reacting.
The baseball issue also rankled some DavenportOne members and observers. While Moline seems to be positioning itself to build a new baseball stadium to attract a new minor-league ballclub to the Quad Cities, "we don't have anything running right now," Decker said.
"They should've taken a leadership role with that one," Nickolas said, "if they want to bring the amenities."
Same Old, Same Old?
DavenportOne's silence on some issues prompts questions of where its interests truly lie. Some small business owners and former chamber members feel the organization doesn't represent them well.
Storm Design Team joined the Davenport Chamber of Commerce in 1998 but didn't renew its membership. "We didn't get any benefit from it," said Denise Cundell-Day, co-owner of the business. Instead, her business joined an association of salons that "offers more of the help we need."
While the chamber (and subsequently DavenportOne) offer networking events, business assistance, and a member directory, those things "didn't help us build our business," she said.
Cundell-Day said that she has been pressured to join DavenportOne during membership drives, but she's not interested. The sales pitch hasn't changed, she said, even though the organization's name and structure have. "They're only interested in us once a year," she said. "I'm a bit skeptical now. ... I see more of a club than an association."
"They tend to be downtown-focused, not Davenport-focused," said Paul Janecek, who used to help the Davenport Chamber of Commerce with membership and is a member of DavenportOne. "It doesn't seem like a Davenport chamber of commerce; it seems like a downtown Davenport chamber of commerce." He said the organization's leadership is focused on downtown, and the rest of DavenportOne follows.
Alderman George Nickolas agreed. "DavenportOne needs to take a more balanced approach to Davenport," he said. "I hear a lot of people who don't want to be members of DavenportOne, and they were members of the chamber."
Nickolas said the City of Davenport has led or been involved in numerous projects supported by business leaders, such as the Radisson hotel, the RiverCenter, and the MidAmerican Energy parking building, but the promised growth hasn't happened. "I haven't seen the movement," he said.
New DavenportOne chair Waterman argues, however, that from a vibrant downtown, success to other parts of the community will flow. "Our communities are perceived from the outside by the health and vitality of our downtown," he said.
Waterman also said some dissatisfaction is natural. "Different members have different needs," he said. But "the plan that we've developed serves all businesses, large and small, and those in between."
Portes said there is work to do with small businesses. "We need to do a better job as an organization to get back to the small businesses," he said. "We need to reach out more."
Huber said DavenportOne's communication with its members has been better than in years past. Although Huber said he doesn't see a problem with the organization's relationships with small businesses, he said DavenportOne will be holding meetings in all parts of the city to get feedback from its members and listen to the issues facing them. Huber said DavenportOne's membership has held steady at approximately 1,200 members, and that its annual retention has been 87 percent.
DavenportOne might also need to work on its diversity. The assembly of board members at last week's annual meeting was distressingly white and male.
Portes said DavenportOne's original board was put together "to make a statement" because of the impending fund drive. That resulted in the board being composed of familiar faces - the heavy-hitting power brokers who tend to be white men. He added that there simply are not many women and minority CEOs.
"I don't know of any organization in downtown that isn't white and male," Blong said. "What we need are more women and minorities in positions of leadership in business."
Portes also promised more diversity in the coming years as board terms expire. "I think our board will change dramatically over the next six years," he said.
Huber was dismissive about the question of the board's composition. "Our board of directors needs to be reflective of our membership," he said, and that includes business type, size, and location, as well as race and gender. Waterman also noted business type, size, and location before race and sex.
But most of the complaints about DavenportOne's first year have a similar ring to them. As is probably natural for an organization that absorbed the memberships, boards, and agendas of five separate groups (four of them downtown-focused), "it hasn't been as broad-based as it should have been," said Decker.
It's only been a year and it's hard to conclusively evaluate such a young organization. DavenportOne, though, has set the standards it wants to be judged by for the next four years. Whether it meets those goals will determine the organization's future.