Illinois community bank leads the way for area's reversal of misfortune

Northwestern Financial Review, Nov 1-Nov 14, 2004 by Hilgert, Jackie

The roots of southern Illinois spread deeply into the state's coal reserves. In fact, coal mining provided residents of Williamson County with a high standard of living for the better part of the 20th Century. But when Congress enacted clean air legislation in the mid-1990s that put severe restrictions on sulfur dioxide emissions, the demand for Illinois' high-sulfur coal dropped like an anchor, plunging thousands of union coal workers into joblessness. And it sunk the county into uncertainty.

"Today, there are no working coal mines in Williamson County," said Dutch Doelitzsch, chairman and CEO of $240 million Midwest Community Bancshares, Marion, Ill. "As a result, our economy has had difficulties." Note Doelitzsch used the word had. Today, Williamson County is a pocket of prosperity. Through the efforts of the larger of his two banks, the Bank of Marion, Doelitzsch has led the turnaround.

"Those of us in our bank and those of us in the community decided we should do what we could to create other kinds of jobs," Bank of Marion's chairman said. Doelitzsch had done a lot of economic development work throughout his career so he, with support from the bank, spearheaded the creation of the Regional Economic Development Corporation (REDCO), a non-profit entity charged with breathing life back into the region's economy. REDCO was launched in 1999 with Doelitzsch in place as its chairman, and with combined support from the cities of Marion, Herrin, Johnston City and Carterville, and additional support from the Williamson County Airport Authority and three area Chambers of Commerce. By autumn of the next year, things were cooking.

Aisin, a Japanese manufacturer of components for new automobiles, initiated conversations with REDCO about locating a plant in Williamson County. "We had land and a number of industrial parks in the county that we thought would be suitable for Aisin," Doelitzsch recalled. "They said, we'll consider what you've submitted, but we're really interested in something a little different." Aisin officials only defined "different" as meaning a bit more expansive. Aisin also was looking at proposals from other states. At the time, Doelitzsch estimated Aisin would bring between 100 and 150 new jobs if it chose to build in Williamson County.

"We felt that if we didn't do more, we were going to lose Aisin as an industry," Doelitzsch said. With quick action, REDCO took an option on a 289-acre site and created a plan with all necessary infrastructures in place; the new plan was submitted to Aisin officials. "In these types of negotiations you generally don't have time to lollygag," Doelitzsch said of the entrepreneurial approach REDCO took to snare Aisin. Still, the non-profit had taken an option on property with no guarantees.

The proposal's decision dates didn't line up cleanly, which made things complicated for the fledgling development corp. "The decision date for us to go forward on the property - or back away - came before Aisin's decision to accept our proposal - or back away," Doelitzsch said. "I felt we were in good enough position," he said. So, the Bank of Marion took the lead position on a $2.7 million bridge loan to secure the deal before the deal was secured. Fully prepared to have the Bank of Marion carry the entire loan, Doelitzsch asked other locally-owned banks in Williamson County to step up and participate. "And they all did," Doelitzsch said.

It took between 30 and 45 days after the bank closed on the property deal for the Aisin team to commit a manufacturing facility to Williamson County; in the interim, Doelitzsch said he crafted his resignation letter in case the company decided not to commit. "It was a loan based on sound principles," he said. "Sure, it was aggressive, but we were secured by the land and the various entities that had pledged to stand behind REDCO"

Not only did Aisin build its initial manufacturing plant, adding more than its original estimate of 150 new jobs, it's since doubled that facility and brought two other Aisinfamily facilities to the area. By 2007, Aisin expects to employ approximately 1,000 people.

REDCO's entrepreneurial approach to economic development resulted in more success stories: Circuit City (300 jobs), Health Care Services Corp. (400 jobs), Wisconsin Physicians Service (375 jobs), Illinois Tool Works (80 jobs), Crisp Container (70 jobs) all came to the area.

"In the beginning, we sat around and tried to figure out, by looking at successful economic development initiatives, what worked," Doelitzsch said. Now other groups are looking to Doelitzsch for a similar education.

Bill Glaze is vice president of the $15 million Bank of Chestnut, Ill. He's also mayor of Mt. Pulaski, a community of 1,800 people located in central Illinois' Logan County. The entire county has a population of 32,000 people and the county seat, Lincoln, took a hit when the state closed the Lincoln Developmental Center. The town lost 500 jobs when the state-run institution shut down. The state retains ownership over the 100-acre site, but Glaze and others who've formed the Logan County Economic Development Partnership, hope to bring industry or housing or some combination of the two, to the site.