GBC-GBA marriage may end up hurting both

October 13, 2002|By JAY HANCOCK

SOMEHOW, strategic opportunities to merge and harmonize Maryland's business leadership groups seem to crop up only when the economy stinks.

It's true, as the motivational robots never stop telling us, that sometimes opportunity lies in crisis. But it's important not to confuse the opportunity to fine-tune the promotion of civic progress with the opportunity to save money.

For five years metro Baltimore companies have financed an ample and highly visible regional-promotion apparatus.

The Greater Baltimore Committee, with a half-century of heritage, consumes $1.8 million annually to lobby Annapolis, promote political cohesion and coordinate companies that want to do more for the area than just pay employees and remit United Way pledges.

The Greater Baltimore Alliance, which became full-fledged in 1997, spends $3.1 million a year to sell the region to potential employers and persuade resident companies not to bolt. The GBA's budget includes $440,000 from taxpayers as well as $600,000 in noncash donations from members.

The GBC is in the business of improving the product known as metropolitan Baltimore. The GBA sells the product.

Other business groups exist. The Maryland Chamber of Commerce lobbies Annapolis for companies statewide. Maryland Business for Responsive Government is a statewide voice with a Baltimore focus and a less-liberal approach than the chamber or the GBC. The Downtown Partnership of Baltimore looks after the city core.

But the recent talk about refocusing the private sector's public voices has centered on melding GBA and GBC.

Prompted in part by developer and GBC Vice Chairman Walter D. Pinkard Jr., the suggestions were made after GBC President Donald P. Hutchinson said he would resign to become Maryland boss for SunTrust Banks. The vacancy gives the groups' boards, the thinking goes, a chance to reassess their missions before installing a new GBC head.

Both organizations are important. Launched in the mid-1950s by visionaries such as developer James W. Rouse, Hecht's President Robert H. Levi and William Boucher III, its longtime executive director, the GBC has often represented business at its civic best, promoting the common good in ways that go beyond the indirect benefits of Adam Smith's invisible hand.

The GBC was a key force in redeveloping the Inner Harbor and Charles Center, and in building the Jones Falls Expressway, the Baltimore Arena and two downtown sports stadiums.

Under Hutchinson, a former Baltimore County executive who took over in 1993, the GBC supported drug-addiction treatment, management reform in Baltimore government and developing the Hippodrome Performing Arts Center while unsuccessfully opposing Gov. Parris N. Glendening's grant of collective-bargaining rights to state workers.

The GBA, for its part, assumed its present form with the 1997 hiring of Ioanna Morfessis, a highly praised economic development pro who once worked in Montgomery County and later ran a regional group in Phoenix, Ariz. It should be noted that Mary E. Junck, publisher of this newspaper at the time, was GBA chairman and was instrumental in launching it.

In the business establishment's view, the GBA has a mixed record. Although it has posted wins, such as the 500-job Bank One operation in Baltimore, the group has landed fewer deals than many had hoped, and its hiring two years ago of celebrity trend guru Faith Popcorn prompted widespread skepticism.

In fairness, Morfessis has had several things working against her. Business migrations subsided, reducing the number of prospects. Maryland's reputation for high labor costs, relatively high taxes and entrenched unions makes it a hard sell for relocating companies.

The state has cut financial incentives for new employers. And its incredibly low unemployment rate in recent years was also a turnoff for expanding companies. Morfessis has spent much of her time getting existing employers to stick around.

There are reasons to consider combining the GBA and the GBC. As separate units, they have the potential to overlap in wasteful ways. One combined organization would tax Baltimore's diminishing executive leadership ranks less severely than two separate ones.

But Hutchinson, who questions a merger, is right to wonder. Corporate relocation pros automatically expect a place of Baltimore's stature to field a crack regional economic development arm, and history suggests that a subsidiary GBA would lose its edge.

In the late 1970s, the GBC absorbed a regional chamber of commerce charged with marketing the area; the salesmanship quickly faded. Again, in the early 1990s, Maryland Economic Growth Associates, a statewide business recruitment group, became affiliated with the Maryland Chamber. Again, the marketing disappeared.

GBA should be able to run on less than $3 million. But the slumping economy that is making members question their dues should also remind them of the importance of economic development.

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