A frustrating fight for jobs in north Omaha

Premium ContentMouse over Home then click on Premium Content for information.

Jim Suttle wears an Urban League lapel pin that says "Jobs."

He tweets about the 90 ribbon-cuttings he attended in 2011. "This year my goal is to reach 100."

A few days after Ron Rosso's business burned down, his cell phone rang. It was the mayor. "I'm really busy dealing with the flood, but if there's anything I can do to help, let me know," Suttle told Rosso, then followed up with a visit to the burned-out site to encourage him to keep his company and its 75 jobs in north Omaha.

Job creation, especially in Omaha's eastern areas, was a theme in Suttle's 2012 state of the city speech. In a later interview, he said westward business expansion at the expense of eastern areas threatens the city's well-being by eroding its property and sales tax base.

"We can't keep going out, out, out and let the older parts of the city die, die, die."

Yet since he took office in June 2009, most of Jim Suttle's efforts to create jobs, especially in north Omaha, have ended in frustration. The 1,000-jobs plan — a cornerstone of Suttle's mayoral campaign — is still a goal, he said. But he doesn't know how much progress the city has made toward that total.

Suttle's aides say the administration recognizes the lack of substantive progress on the jobs front for north Omaha. Suttle, for his part, notes the "baby steps" taken to improve the area.

"But we haven't found the giant steps, which is the investor who would make a giant widget factory," he said.

He blames the lack of business investment on political gridlock in Washington, D.C., which he said keeps trillions of dollars from creating jobs in Omaha and other cities around the nation.

"I don't create jobs by myself," Suttle said. Instead, he said, he encourages businesses to invest the capital that leads to jobs. In the few small job-creating successes so far, he said, "all we did was serve as the matchmaker."

When CDC Enterprises came to town in 2009 with plans for a 200-employee manufacturing plant in north Omaha, Suttle issued a welcoming press release and pledged $2 million in federal stimulus funds to the project. "This is just the first step in my plan to bring 1,000 new jobs to the eastern part of our city," he said at the time.

CDC failed to get financing, so the stimulus money was never spent.

Three times Suttle pitched north Omaha locations to the owners of Omaha Steel Castings, who were looking to move from 4601 Farnam St. to a larger site. In the end, the company chose to move to Wahoo, Neb., citing much lower costs for its initial electrical equipment.

It's a choice Suttle decries: "He's going to lose his employees. But it's his call at the end of the day."

Suttle's job-creating frustrations have been many:

>> Of the $500,000 in federal incentives Suttle set aside for businesses to build east of 42nd Street, not a nickel has been claimed.

>> Rosso, the north Omaha businessman who suffered a fire last spring, is reopening Nebraska Machine Products, but north Omaha didn't have the building he needed. He's relocating to 90th and F Streets, where he found a bigger, better facility at a lower cost, even counting the incentives for north Omaha.

>> Longtime north Omaha employer Distefano Tool and Manufacturing last year moved its 90 employees to South 108th Street and Interstate 80.

>> A specialty meatpacking company dropped its plans for an Omaha plant because its primary market — Egypt — went through a revolution.

>> Japanese investors wanted an industrial site along North 16th Street, but last summer's flood saturated the ground so deeply that they put the idea on hold.

Suttle's experience illustrates what a mayor can and can't do to improve a local economy.

"What really works is having the fundamentals strong, keeping taxes down and spending wisely and making your infrastructure supportive for economic development," said Creighton University economist Ernie Goss, who has seen five Omaha mayors in his 20 years in the city.

To add jobs, Goss said, Omaha must keep local sales and property taxes competitive with other cities. With Suttle's backing, the city added a 2.5 percent restaurant tax in 2010 and raised its property tax levy to offset rising expenses and to keep its good credit rating.

"That's certainly a notch against him there, in terms of an additional tax that does weigh on the economy," Goss said. "Given the bond ratings and the challenges that we see nationally and internationally, and the growth that's happened in Omaha, he's done a reasonably good job, I'd have to say."

Click on image to enlarge

In his Feb. 9 speech, Suttle claimed some job successes, saying 700 businesses have opened and 8,000 new jobs have been created since he took office.

The jobs figure is the net employment gain from July 2010 to November 2011 for the eight-county metropolitan area. The new-business count is from a list of business announcements compiled by the Greater Omaha Chamber of Commerce.

The chamber list, however, includes some that have yet to actually add jobs. For example, the list for January 2012 includes 1,200 jobs at a new cancer center at the University of Nebraska Medical Center, a proposal that is opposed by Gov. Dave Heineman as unaffordable.

While the Omaha area's employment is up from June 2010, it's still nearly 6,000 jobs lower than before the 2008-09 recession.

Although the Omaha area's unemployment rate is lower than the national average, its employment trends mirror the ups and downs of the recession and slow recovery, reflecting factors such as interest rates, foreign exports and agricultural profits — all beyond a mayor's control.

A new University of Nebraska at Omaha analysis done for The World-Herald puts unemployment in Douglas County's northeastern corner at 11.5 percent, about triple that of areas west of 72nd Street, and at 8.3 percent in the southeastern corner. The countywide average rate from 2006-10 is 6.2 percent.

In some parts of north Omaha, Suttle said, unemployment reaches 25 percent, making jobs there a priority. He has a 4-by-4-foot aerial photograph of north Omaha taped to the wall in his office. Every day, the mayor said, he tries to do something positive for that part of town. He also hopes to attract jobs to South Omaha, particularly an industrial tract near 27th and Martha Streets.

Willie Barney, president of the Empowerment Network, which works to improve north Omaha, said the employment gap "just doesn't make sense anymore. It's going to take large-scale investment."

Barney called for creating new mixed-income neighborhoods, rehabilitating existing homes, training more workers, encouraging entrepreneurs and hiring at least some workers from the area for the city's $1.7 billion sewer separation project.

"What we've been saying all along is 'How do you extend the greatness of Omaha into every ZIP code?' We're so close in many areas."

Omaha City Council member Ben Gray, whose district covers much of northeast Omaha, said tightened lending standards have crimped the supply of credit available to entrepreneurs. North Omaha lacks a skilled labor pool, so the city needs to train young people and retrain unemployed older workers, Gray said.

The area has few available large land parcels that could be readied for a potential developer or employer, he said. "It's a question of land use. ... You have to create an environment that lets people know north Omaha is open for business."

A job fair last week in north Omaha tried to match Gregory Lewis with call center job openings, but he was told his felony record disqualified him.

Lewis, 38, has seven years' experience as a welder and is taking a class to learn computer skills, but he hasn't found a job near his north Omaha home or along a bus route to support his family.

He said it seems like all the jobs are in west Omaha. "It's pretty rough out here without a job. Once a person does the time, they should be allowed to get reacclimated to society. What am I supposed to do with no job?"

Bringing a large employer to north Omaha will not be easy, said John Fonda, a friend of Suttle's who owns the John Day Co. warehouse business in the industrial area near Eppley Airfield. Developers are reluctant to build without a tenant in hand, and businesses prefer areas with services for customers and employees, which parts of north Omaha lack.

"Obviously they've got to get the north Omaha community developed," Fonda said. "They've got to get those kids trained," so that people living in the area qualify for jobs.

Fonda also said concerns about crime in north Omaha may deter some businesses from locating there. "The mayor can't fix this with a snap of his fingers."

One new north Omaha business is Ajasa Technologies, which sends computer consultants to businesses. The company, based in Golden Valley, Minn., shares an office at 24th and Lake Streets and last spring announced a two-year goal of 100 employees. Today the company has seven or eight people working under a contract with Creighton University.

"We're going to do our best to create some more," said Ajasa business development director Autumn Frazier. "The mayor's been extremely helpful in advocating for us to be here."

The city's partner in economic development is the Greater Omaha Chamber of Commerce, which gets $125,000 a year in keno proceeds from the city.

Rod Moseman, the chamber's head of economic development, said Suttle talks with visiting executives, meets out-of-town CEOs and goes on recruiting trips, including California in 2010 and Illinois last year. "Having the chief elected official is important on those calls," Moseman said.

The chamber is considered a regional development group, but Suttle said he has told the chamber to focus more of its industrial "selling" primarily east of 42nd Street because of his concern over tax weaknesses.

He designated his chief of staff, Steve Oltmans, as the point person for economic development. Moseman and Oltmans meet at 7:30 a.m. every Thursday, if they are both in town, to discuss recruiting projects and related matters — a stepped-up emphasis compared with previous mayors, Moseman said.

While north Omaha struggles, two major corporate offices are under construction in west Omaha: the headquarters of discount broker TD Ameritrade in the Old Mill area and payment processor CSG International's Omaha offices at 180th Street and West Dodge Road.

Bret Griess, CSG's Omaha-based chief operating officer, said CSG's facilities team complimented the city and chamber staff members, saying they were "a great support group in the decision-making process. ... We didn't want to be guided in a specific direction. We wanted to understand the broader market."

Some potential sites would have added significant commuting time for many of CSG's 1,300 Omaha employees, Griess said. "We did not want that."

The Omaha area recently lost out on a $230 million, 50-job data center partly because it didn't have a site that was "shovel-ready" — properly zoned, owned and hooked to utilities. Since then, Sarpy County officials have rezoned a 111.5-acre patch of farmland near 204th and Harrison Streets for such uses.

Suttle said that within the city, preparing such a site may require environmental cleanup, moving utility lines, property liens and demolition. There are federal funds to help develop such "brownfield" sites, but it can be faster and cheaper to redevelop a cornfield.

Suttle sees a direct tie between crime and creating jobs and says solutions lie in long-term improvements in education and families as well as in businesses deciding to invest and offer jobs.

Can Omaha meet such challenges?

"You're talking to an optimist," the mayor said. "You don't give up. You keep working it. Life is full of learning."

Contact the writer: 402-444-1080, steve.jordon@owh.com

twitter.com/buffettOWH

« Metro/Region

Share