Monday, July 28, 2008

A Twenty One Bagger!

In our business we like to talk about eking out singles and occasionally a double, doubling the value of an investment over some period of time. Very, very rarely we’ll get a round tripper, when we’ll multiple an investment by four times. We call them “grand slams” and have a big gong in the office that we pound, celebrating successes.

Ponca City, OK, who I’ve written about before, needs to get themselves a VERY BIG gong. They’re not just hitting singles or even doubles; they’re shooting for much bigger returns. Would you believe 21 times?

Mark Snead and Suzette Barta, economists with the Spears School of Business at Oklahoma State University, recently completed a study of the economic impact of Ponca City’s ED efforts since 1994. What they found is that for every dollar that Ponca City invested in their ED efforts from a sales tax initiative have returned $21! The projects completed during those 13 years generated $530.4 million in direct economic benefit. In particular, the report shows the resulting strong wage growth and per capita income growth in the past four years since Ponca City Development changed strategies, striving to diversify its economy from one largely dependent upon oil and gas. Since then the average wage of jobs created has been $41,250/year.

David Myers, Executive Director of ED said of the study, “To have the state’s leading expert on local economics say that the strategy of pursuing high wage new economy jobs is paying off is, to say the least, reassuring. The key finding in the report, that our economic growth is the result of local economic programs rather than a reliance on the state’s economy or strength of the flourishing oil and gas industry signifies that Ponca City’s economy is becoming much more diversified than previously thought.”

The report details 30 projects completed during the 13 years studied, some of which started and quickly folded while most started small and continued to add jobs and investment. Some of the major ones include a meat packing plant, a customer service outsourcing center, several manufacturers and most recently a sensor research and testing laboratory.

I hope that Ponca City gets its share of recognition for the results that they’ve generated. After all, a 21x return on investment is something that should be celebrated long and hard.

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