Despite doubts, Kasich’s jobs machine rolls on

9/4/2011

As Labor Day approaches, Mark Kvamme has come to Toledo to talk about jobs. He aims to help create a lot of them in Ohio.

Mr. Kvamme is chief investment officer of JobsOhio, the private corporation created by Gov. John Kasich to oversee state government’s efforts to attract and keep jobs and promote economic growth. JobsOhio is taking over many of the duties previously performed by the Ohio Department of Development.

That shift has generated skepticism, much of it justified, about the extent to which formerly public business will be done behind closed doors, with Ohioans learning about it only after the fact.

But the governor and Mr. Kvamme insist that the state needs to move faster and more flexibly — “at the speed of business,” in the administration’s oft-repeated phrase — to compete more effectively for jobs and investment.

“We can’t have public records requests impinge on economic development,” Mr. Kvamme told me during a visit to The Blade last week, after a meeting with local development officials in Perrysburg.

“If you’re a public company, you can’t have that information out there,” he says. “Companies tell us, without a nondisclosure agreement, we cannot work with you.”

JobsOhio is funding itself by leasing the state’s wholesale liquor monopoly for 25 years, for $1.5 billion. Mr. Kvamme estimates the lease will throw off $100 million in annual profits that his corporation can use to make loans to businesses, provide infrastructure improvement grants, promote tourism, and offer “close the deal” money to attract employers.

That revenue, of course, will no longer be available to the state budget to help pay for general government. But Mr. Kvamme, a former Silicon Valley venture capitalist, insists that JobsOhio will be “ROI-positive,” using business-speak for return on investment.

JobsOhio is working with local economic development agencies across the state to promote regional assets and target strategic industries. The Ohio Third Frontier Commission, which promotes applications of technology and innovation, also is part of the setup; it works with Jobs-Ohio to establish goals for the regional agencies and provides them with funding, independent evaluation, and oversight.

JobsOhio’s affiliate in 19 counties in northwest Ohio is the Toledo-based Regional Growth Partnership. Dean Monske, the partnership’s president, says the arrangement will foster “efficiency, speed, and responsiveness.”

“The state is saying it no longer wants to dictate to us,” Mr. Monske says. “We’re closer to the decision makers in this area.”

Mr. Kvamme says our part of the state has “great progress to sell,” both in traditional industries such as auto manufacturing and emerging ones such as photovoltaics and alternative energy.

He estimates that since the Kasich administration took office in January, JobsOhio and the revamped Department of Development have helped bring 2,500 jobs to northwest Ohio and preserve another 7,300. Those figures include the 1,105 jobs Chrysler Group LLC is talking about creating at its Toledo Assembly complex, although that deal isn’t done yet.

Mr. Kvamme is working for Jobs-Ohio for a dollar a year. He and the governor have recruited a high-powered board of directors that includes Ohio State University President Gordon Gee and the chief executives of such big Ohio companies as Marathon Petroleum Corp., Procter & Gamble, and Bob Evans Farms.

That composition, along with Mr. Kvamme’s pledge to deregulate business — “Silly little things that government does add up,” he says — has led to complaints that JobsOhio will favor corporate interests over those of taxpayers, workers, and environmental protection.

Two Democratic state lawmakers and the liberal advocacy group ProgressOhio are suing to put JobsOhio out of business. They claim its private status and investment activities violate the state constitution.

Mr. Kvamme brushes off the lawsuit and its potential to discourage deals with private businesses, insisting that JobsOhio is “not using any public funds.” Christiane Schmenk, the director of the development department, says JobsOhio is “on board to do great things, and we’re off and running.”

Both officials take greater offense at an accusation made by Progress-Ohio last week that the Kasich administration is using the grants to the regional development agencies to reward its political contributors and allies on such contentious issues as Senate Bill 5, the statewide ballot proposal that would erode the collective-bargaining rights of public employees.

“There’s absolutely zero connection,” Mr. Kvamme says. “The partners already were picked. That’s so ridiculous, so irresponsible — it’s disgusting.”

Adds Ms. Schmenk: “What they’re talking about never entered our minds. It’s a total fabrication.”

I have reservations about Jobs-Ohio. I worry that it will be too quick to discard development initiatives introduced by Mr. Kasich’s predecessors in such areas as export promotion. I’m concerned that the administration’s penchant for privatization is driven more by ideology than proven advantages.

There are legitimate objections to the extent to which JobsOhio gets to play by its own rules, and valid questions about whether its confidentiality procedures will keep citizens in the dark, as well as potential business poachers.

And when Mr. Kvamme identifies his competition — “It’s Michigan, it’s Indiana, it’s Pennsylvania and Kentucky and North Carolina and Georgia” — he almost sounds as if he’s handicapping the Big Ten football season. Has job creation in America truly become a zero-sum game?

But Ohio needs jobs, Heaven knows. JobsOhio is a fact, like it or not. So let’s watch the folks who run it like hawks — but let’s also give them the opportunity to do what they say they can do.

Says Mr. Kvamme: “Judge us on our results.”

David Kushma is editor of The Blade.

Contact him at: dkushma@theblade.com