Isles a tough sell
for business

A relocation consultant says
a vacation image and poor
business-climate rankings hurt

By Rob Perez
Star-Bulletin

If Hawaii could convince mainland corporate executives to give the state a serious look as a place to do business, it could lure many of them, leading to new job opportunities for local residents.

The problem is most executives don't even consider Hawaii a possibility.

So says Robert Ady, a Chicago executive with Fantus Consulting, the nation's largest company specializing in helping companies relocate or find expansion sites.

If companies seriously considered Hawaii, "I would just stop short of guaranteeing" they would locate here, Ady said yesterday following a talk to a panel looking at ways to improve the state's business climate.

Despite Hawaii's dismal rankings in national surveys, the state has key attributes that could attract information-oriented companies that don't have to be on the mainland, Ady, a 30-year veteran of the relocation business, told members of the working group for the Economic Revitalization Task Force.

But he said Hawaii typically doesn't survive even the first cuts when companies start eliminating potential sites for expansion or relocation.

"Quite frankly, Hawaii has been very easy for us" to eliminate right off the bat, Ady said. "You're usually not even on the radar screen."

Executives don't consider Hawaii typically because they think of it only as a vacation destination or the state's poor business rankings discourage any consideration, he said.

But Hawaii's good telecommunications system, availability of labor and a relatively well-educated population (based on high school graduation rates) are attributes that can work in the state's favor, Ady said.

He acknowledged that climate rankings can be very subjective and even unreliable, yet they are important in attracting attention. "It's a fickle thing. It's difficult to quantify, it's difficult to measure but it's absolutely deadly," he told the working group.

If Hawaii wants to improve its chances of luring businesses, it needs to make structural changes, such as with its tax system, and demonstrate a long-term commitment to economic development, according to Ady.

He said private-sector involvement is critical. If the private sector isn't taking an active role, companies will shy away from considering that area, wondering why there isn't the public-private partnership found in so many successful communities, Ady said.

Also, Hawaii will have a tougher time attracting companies if residents are pessimistic about the economy or seem anxious to move away, he said. "Why should (a business) invest $50 million in an area that doesn't have faith or confidence in itself?"

Ady was invited to speak to yesterday's panel by the task force, which is trying to develop ways to improve Hawaii's economy.

If significant changes don't result from the task force process, Ady said, that will send a strong message to outside businesses. "It'll be damning for the state," he said.

Cherylle Morrow, a small business executive who is part of the business-climate group, said she was pleased Ady stressed the need for action.

"I think he really addressed a lot of the issues we've all talked about for so long," Morrow said.

Not everyone, however, liked what Ady said.

When he cited Michigan as an example of a state that significantly improved its business climate without hurting the environment, that triggered an outburst by Sierra Club attorney David Frankel, who was in the audience.

"Some of the things you're saying just aren't true," Frankel said.