Will Iowa City reap benefits of ICAD, ICABP merger?

On Nov. 17, the Iowa City Area Business Partnership (ICABP) and Iowa City Area Development Group (ICAD) announced a resolution to merge by July 1, 2023. Leaders from the organizations predict the unification will provide investors and small businesses a one-stop shop for all their needs. ICAD Vice President and Director of Strategic Growth Tom […]

On Nov. 17, the Iowa City Area Business Partnership (ICABP) and Iowa City Area Development Group (ICAD) announced a resolution to merge by July 1, 2023. Leaders from the organizations predict the unification will provide investors and small businesses a one-stop shop for all their needs. ICAD Vice President and Director of Strategic Growth Tom Banta will become the interim CEO in January, and ICABP President & CEO Kim Casko will remain in both roles until the July merger. Current ICAD President Kate Moreland is stepping down to start her own venture called Kate Moreland Coaching. She will remain involved as a part-time consultant for the Better Together 2030 All In Vision. The CBJ spoke with Ms. Casko, Ms. Moreland and Mr. Banta to learn more about the motivations behind the merger, how they expect the region to benefit from the decision and where they see the future of economic development headed in the Corridor.

What does the merger mean?

Both organizations, although similar in name now, have focused on helping the business community for decades.  The ICABP, known as the Iowa City Chamber of Commerce in 1940, has historically focused on helping local businesses. ICAD separated from the group – at that point called the Greater Iowa City Area Chamber of Commerce – in 1984 to hone in on interstate commerce efforts. While ICAD assists companies conducting business across state lines, it also serves aspiring entrepreneurs and offers guidance on location and expansion projects. The November announcement wasn’t the first time ICAD and the ICABP contemplated joining forces. “Most recently it was 2018,” said Ms. Casko, speaking of a six-month study called Project Penguin. “We ultimately decided to stay separate, given the growing presence of ICR.” ICR, or Iowa City-Cedar Rapids, is a nonprofit organization launched in 2017 by ICAD and the Cedar Rapids Metro Economic Alliance that focuses on business attraction, workforce development and inclusivity. The city’s relationship with the Cedar Rapids Metro Economic Alliance will not change as a result of a merger, Ms. Casko and Ms. Moreland agreed. Other concerns at the time centered around whether a combined organization would still have the best interests of small businesses at heart, and if advocacy for these businesses would be more difficult, she said. Five years later, the two groups are agreeing to merge, finally following the trend statewide of combining a city’s chamber of commerce with economic development efforts. Out of the 18 largest markets in Iowa, only Mason City and Iowa City did not have merged organizations under one roof, Mr. Banta explained.  “I think it’s a long time coming,” he said.

Why merge now?

The two organizations opted against a merger four years ago, instead deciding it was better to work toward that direction and begin to share resources. But in recent years, roles and responsibilities of the two groups overlapped to such a degree that continuing with the status quo duplicated efforts and muddied the benefits of membership for participating businesses and investors.  “When COVID-19 first hit, we had two or three staff people researching information independently and sending out information to the same stakeholders,” Ms. Casko said. “That was a big ‘aha’ moment for us.” The ICABP is part of the Iowa Chamber Alliance, a coalition of chambers of commerce across the state. They compared their situations to chambers in Cedar Rapids, the Quad Cities, Des Moines, Ames and even outside state lines like Topeka, Kansas, and saw they were an outlier in a world where economic development and chamber activity are co-mingled and inextricably linked – more than ever before. “Economic development has really changed,” Ms. Moreland said. “Workforce is a perfect example. That’s one of the top issues in economic development but it’s also a top issue for chambers to help their local businesses.” The merger will let business owners have access to the wide range of services already offered by ICAD and the ICABP at MERGE in Iowa City, but under one organizational structure to eliminate confusion.

“ICAD has built up a lot of strength with serving entrepreneurs,” Ms. Moreland said. “At some point, they need to reach out to the chambers to connect them to other businesses. Being able to have one front door versus [saying], ‘You’ve reached your point here, so we’re going to kick you over to this entity.’ Now there is one voice to be the trusted source.”

Changes coming

While all three leaders acknowledged an intentional listening period is important to ensure stakeholders are happy with upcoming changes, they reiterated the move is in the best interest of the region. “We’re not looking to cut things,” Ms. Moreland said. “I want to assure people that this is about providing greater value and opportunity.” One such area is interstate commerce. With the rise of digital strategy, and the acceleration of online trends following the pandemic, small businesses traditionally concerned solely with local buyers now recognize the vast potential of shipping products and services beyond state lines. “These Main Street businesses that relied only on foot traffic, they’ve had to expand,” Mr. Banta said. “Doing that requires new skill sets and new capabilities that change their business model.” He referred to a case study where a small machining and metal fabrication company in Johnson County added a robot, allowing the company the flexibility to manufacture products for business-to-consumer clients in addition to its traditional business-to-business customer model. “The dynamics and the lines are blurring,” he said. “It’s our role to connect companies to these resources. The world is changing.” ICAD has seen a steady growth in the number of investors in recent years, Ms. Moreland said, and the organization was lucky to just lose under 10 small businesses from its membership during the pandemic. “We feel like we served people during that very challenging time, and this is about being bold about what’s next,” she said. They expect the new organizations will need a revamped revenue model that will let businesses engage differently with the organization based on its wants and needs at all stages of a company’s life cycle. “I’m super excited about this part because for a while we’ve wanted to reinvent our dues model,” Ms. Casko said. “It’s a very traditional archaic chamber model and it’s complicated. Being able to move to a more modernized model that involves tiers of subscriptions will take us to the next level."

What does the future hold?

A Merger Advisory Council, composed of board members, is set to begin work on unifying the two organizations. By next summer, the organizations will vote again on bylaws and articles of incorporation. 

From there, a hiring process will commence to select a new president of the so-far-unnamed merged entity. A press release indicated it is not a foregone conclusion either Ms. Casko or Mr. Banta will assume the position. Ms. Casko acknowledged July 1, at first glance, seems like a quick turnaround to merge both organizations, but that most of the groundwork has already been accomplished. She said that deadline is important because it’s the start of a new fiscal year for ICAD, creating a sense of urgency to wrap up the process by then. The merger, Mr. Banta believes, will only strengthen the solid foundations many major companies have in the region. “I think biotech is prominent,” he said. “We have strong assets and strong capabilities within the university around the life science side of things. I also think we have tremendous resources and capability with the biomass and food ingredients industry as well. Cedar Rapids is one of the largest bioprocessing operations in the country. Fermentation is at the center of that and I think it’s something we continue to build around, but I think we’re well-positioned in the bioeconomy.  “We’re laser-focused on education technology and leveraging the legacy we’ve had with ACT and Pearson,” he continued. “You have blue chip manufacturing partners here like Procter & Gamble. We are home to the largest global operation for manual toothbrushes and have the only North American electric toothbrush operation here. “It all makes for a pretty robust, diverse economy with a lot of growth potential,” he said.