Town should set goals for development group

Hilton Head Island Town Council should take steps now to avoid mistakes of other economic development corporations.

newsroom@islandpacket.comJune 16, 2014 

Hilton Head Island leaders are betting big that the town's economic development corporation can attract new businesses and younger residents to the island.

Town Council has given preliminary approval to its new budget that includes nearly $450,000 for the organization -- up from its $150,000 designation last year.

About half of the money, $225,000, will pay for an executive director and assistant to run the corporation and report to the board. Board members have their sights set on a marketing campaign and business-scouting trips to find potential businesses to move to the island.

Generally, we have been supportive of town efforts to revitalize the island. Changes to its land management ordinance to provide more flexibility and applying tax increment financing (TIF) dollars to revitalize town corridors, including Coligny and Office Park Road, are important investments. In fact, they're essential expenditures to ensure Hilton Head remains competitive in the tourism game.

If Town Council needs help in identifying and attracting new businesses that are good fits for the town, we're willing to give these new efforts a chance too. Hilton Head represents a very specific niche and can only support low-impact businesses that don't need much physical space. We can see how a director with an expertise in locating such businesses would be advantageous.

We encourage Town Council to proceed -- but with caution. While economic development corporations have become all the rage around the country, some research shows that they are no better at picking the businesses of tomorrow than anyone else. These corporations are a tool, not a solution, to charting a course for growth.

And it's of note that both Hilton Head's and Bluffton's development corporations have said that health care and tech firms are two of their chosen targets. The towns should not compete.

Also, recent history shows that it is all too easy to let a development corporation assume too much control. Case in point: Bluffton's corporation quickly convinced the town of Bluffton, Beaufort County and the Beaufort County School District to collectively contribute up to $3.8 million to buy land in Buckwalter Place.

Residents are rightfully wary of whether the public expenditure will yield success. And we and others have questioned why these public bodies are getting involved in development at all. Most disturbing, the corporation has yet to land a business to build on the parcel.

Hilton Head must avoid a similar path with its development corporation. That means no buying of land or buildings in the hopes of luring a business in the future. No back room executive sessions where the public is left in the dark about how its dollars are being spent. And no blindly following the lead of a corporation no matter who the new director is or who sits on the board.

Ultimately, Town Council will -- and should-- be judged by the corporation's success. That should be incentive for council members to keep a close watch on the corporation's dealings.

Specific goals should be set for the new director along with deadlines by which the goals must be met. And corporation requests for additional funding -- which will certainly be coming in the years ahead -- should be determined based on the amount of success the corporation has achieved to date. No success, no new dollars.

Jumping on the "development corporation" bandwagon was the easy part. Now, Hilton Head must make good on the public investment.

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