Leaders working to bring wealth-building business, industry to Norman

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The burning question of which industries represent the future of Norman’s economy is a driving force for a core group of local development leaders as they establish, revise and implement a strategic plan to draw businesses to town.

For several years, Team Norman — made up of the Norman Chamber of Commerce, the Norman Economic Development Coalition and VisitNorman — has been in the process of developing a strategic plan to bring in industries they’ve identified as key to the city’s economic growth.

“We’re trying to attract wealth-producing companies that are sustainable and will contribute to providing a good quality of life for Norman,” said Lawrence McKinney, NEDC president and CEO. “Now, what does that look like? We’ve got a list of target areas to focus on for that.”

McKinney said a crucial consideration in building the city’s economy is drawing companies that pay no less than Norman’s current per capita income, which is roughly $31,000 or $16.50 an hour. If companies aren’t paying that rate, he said it won’t be important for NEDC to attract those businesses to Norman.

The NEDC and Team Norman development plan looks to create around 3,000 new jobs by 2026, and see about $200 million in new capital investment for the city. McKinney said he’ll have a report ready by the end of August that will further highlight this strategic initiative, but that Team Norman has already been working off a list of industries key to Norman’s future.

At the top of that list is aerospace and aviation, which the Oklahoma Department of Commerce has identified as the fastest growing and second largest industry in the state, behind gross production of oil and gas.

ODOC reported that despite the COVID-19 pandemic, Oklahoma continued to draw in more aerospace and defense companies that brought the state a total of 1,177 new jobs with an average annual wage greater than $86,000, over $500 million in investment commitments for the state and $35 million worth of potential Department of Defense contracts.

Given the convenience of Norman’s central location, education opportunities with the University of Oklahoma and Moore-Norman Technology Center and the proximity of the Max Westheimer Airport, Norman Chamber CEO Scott Martin said it’s only natural that Norman would get involved in aerospace.

“Some in the state expect it to be the top industry in the next few years, and I believe Norman has a very important role in helping further that economy going into the next decade,” Martin said.

A key part of that involvement in aerospace and defense is attracting businesses Norman is strategically positioned for, McKinney said. Rather than attracting larger companies that would require more specialized infrastructure and more acreage, he said the plan is to attract small- to medium-sized companies that Norman can better accommodate.

McKinney said Team Norman identified weather and radar technology as a close second to aerospace, as Norman is “world-class in that, and it’s time that the world knows it.”

With the National Weather Center on the OU campus, Martin and McKinney said Norman is provided with opportunities beyond the reach of competitors with the kind of public sector investment and research available.

“Norman is unique in that we are a hub for weather research, and we’re looking to translate that into private sector jobs,” Martin said. “That’s a great niche industry very few communities around the nation can take advantage of.”

Biomedical companies and high-tech manufacturing is another area Martin said Norman already has a foothold in and will be looking to dramatically expand in the coming decade.

While Norman-based IMMY took the spotlight over the last year for the way the medical manufacturing company played a role in COVID-19 testing and vaccination drives, Martin said the homegrown company has been doing disease testing for countries around the world, and represents the high-tech manufacturing model Norman is looking to attract.

Martin said similar companies like Johnson Controls, Hitachi and Avara Pharmaceutical Services that Norman already has in their backyard have shown that Norman is capable of drawing in that kind of high-tech business.

“The question is just how do we bring in more,” he said.

Other areas and industries Team Norman has highlighted include developing local entrepreneurship, investing in athletic and eco- tourism and continuing to support Norman’s thriving art community into the future.

“It’s going to take some effort and, most importantly, some real cooperation from among all the different silos — the city, the county, downtown, Lindsey Street, Campus Corner, all the rest — so that they can come together and figure out how to make one plus one equal three,” McKinney said.

Making it a realityWhile Team Norman’s plan for the future has positive implications for where the city will go next, McKinney said attracting these industries and bringing that wealth to Norman is not without its challenges.

“From a 30,000-foot perspective, we’ve got some major issues to overcome in order to attract the kind of businesses that we want,” McKinney said.

Some of those issues are challenges Oklahoma faces uniquely as a state, like the fact that cities are supported by sales tax instead of ad valorem tax. In the sales tax model, tax is generated per transaction, whereas ad valorem taxes — like property taxes — are levied annually.

While drawing businesses results in net increases of ad valorem tax due to property transactions and subsequent improvements made to those properties, sales tax is only produced by people making retail transactions.

McKinney said this reality puts cities like Norman at a disadvantage — they need to increase sales so that they can generate sales tax to fund city budgets, but that priority draws their focus from bringing in wealth-producing industries to driving retail sales. Team Norman is hoping to flip that focus on its head.

By drawing in the wealth-producing industries Team Norman has identified, McKinney said the hope is that higher-paying jobs will bring more people to Norman with more disposable income, which will contribute to more sales tax and draw in more retail businesses as a byproduct.

“It’s going to make a bigger impact on the economy if we focus on those jobs with $16.50 an hour plus benefits and insurance,” McKinney said. “The companies we draw might not pay retail taxes, but their employees do. and if they have more money to spend, that increases the sales tax the city needs.”

A lack of solid infrastructure — like good roads, stable broadband or better stormwater drainage — are also aspects of life in Norman that McKinney said can create difficulty in drawing new companies.

“Companies are always looking for red flags as to why they shouldn’t come,” McKinney said. “It’s not always the focus on the benefits that a certain location provides, but it can also be the drawbacks.”

McKinney said his report will go into more depth identifying what some of these problems are, the best way to combat them and how to capitalize on the incentives the city has to offer.

“Our incentives here are location, with (Norman) being a metro area, having OU here and a wonderful career-tech system,” he said.

The importance of technologyAnother highly influential factor in the development of Norman’s economy and business sector in the coming decade is the way local businesses will adapt to technology.

Martin said he found local companies adapted to the COVID-19 pandemic by adopting technology, expanding online services and implementing telecommuting.

“They adapted and evolved quickly to meet the needs of their customers, and I think you’re going to continue to see that evolution, whether it’s in retail, restaurants or other businesses,” Martin said. “I think you’re going to see a lot of innovation from Norman businesses in the future.”

Martin said while brick and mortar stores used to be the business model, more companies are switching to what he called the “brick and click” — businesses that have a storefront, but also have an expanding selection of goods and services available online.

He added that while Norman’s businesses have already proven themselves receptive to those changes in the past, the pandemic provided a boost that will keep that evolution continuing for years.

“We’re still going to have your traditional businesses, but those traditional businesses are going to start, more and more, to offer their services over an online venue,” Martin said. “And, frankly, for them to survive long term, they’re going to have to do that, in my opinion.”

Flexibility in the workplace environment is also something Norman is already seeing as a result of the COVID-19 pandemic, McKinney said, with some local employers saying they’re already allowing employees to work from home full time.

“This is kind of a new era for everyone in business,” McKinney said. “And out of many things we learned from the pandemic is that, lo and behold, employees are sometimes more productive when they’re not working in an office.”

McKinney said some businesses could start downsizing office spaces, or employees could have the option of working at a job from almost anywhere in the country.

“Those that have been willing to take some risks and embrace technology or new ways of delivering their services, I have seen thrive,” Martin said. “I suspect that Norman businesses, Oklahoma businesses and the American entrepreneurs are going to do some pretty amazing things in the next decade.”