WEDC’S Hall has 'eyes wide open' in mission to restore credibility, create jobs
Reed Hall only planned on the “interim title” during his time as Wisconsin Economic Development Corp. CEO. He had just retired to Madison and thought that taking the helm at WEDC would be an opportunity to give back to the community after spending years in the private sector.
“I really hadn’t given it much thought, but I looked at it and thought, ‘sure, for an interim I’m OK with it,’” the longtime Marshfield Clinic exec said. “This opportunity to do public service after 36 years in the private side of business, I think we all need to do public service at some time in our career.”
But after three months in the position and a request from Gov. Scott Walker in early January to take over full-time, Hall’s now ready to rework the department and fix the gaps in accountability.
“I think once people start realizing all the great things going on here, then the bad press is behind us,” Hall said. “But I go into the job with my eyes wide open. I know there’s some credibility that still needs to be gained.”
Hall, 64, said he told Walker early on he didn’t want to be a candidate for the permanent CEO position because of the edge his interim basis would give him over the other candidates. However, after the three finalists forwarded by the search committee were interviewed, Walker came to Hall again to ask if he’d consider taking on the position, which pays an annual salary of $120,000.
Walker’s choice of Hall was met with skepticism by some Democrats. Senate Minority Leader Chris Larson said Hall was the least qualified of the candidates with regard to economic development. But Hall points out he has served on several boards that dealt with economic development, such as Forward Wisconsin, the Wisconsin Manufacturers & Commerce Executive Committee and the Wisconsin Alumni Association. He also points out that the Marshfield Clinic, an economic engine in central and western Wisconsin, provides a model for how he approaches economic development.
“When I joined the clinic in 1976 there were 145 physicians, and now there are over 800,” Hall said. “Staff grew to 7,500 people. Now, [what] that demonstrates to me is that one of the best ways to grow jobs is existing businesses doing well and expanding the footprint.”
While Hall takes over an agency that has been plagued by missteps in the last year, he says the 94-person organization is already on the right path to restoring its credibility.
Hall notes that the public-private corporation is in the process of hiring a new chief financial officer and will be putting out a job posting next week for a vice president of credit risk assessment. The latter position came out of recommendations from the Financial Institution Products Corp., which recommended a more rigorous approach to vetting WEDC’s loans to businesses.
That means WEDC has to operate more like a bank but retain some level of flexibility, Hall says.
“Our mission is giving out loans to create jobs,” Hall said. “So we have a broader filter than what a normal bank has. If we only had a 1 percent loss ratio [like most banks], I think we probably wouldn’t be doing what we should, because we’d be too conservative in our loans. We can be more generous in looking at credit risk, assuming more jobs are created in that.”
Hall says the agency has made progress in addressing the $19 million in loans that are past due, but that at some point some will have to be written off as unrecoverable. Schenk S.C., the company that audited WEDC, estimates $4 million in past due loans are likely unrecoverable. Hall hopes the new credit committee and associated vice president will help make sure the loan portfolio balances economic development and fiscal responsibility to taxpayers.
Hall says the restoring the credibility of the agency will take time but hopes that recent efforts in areas such as trade missions, seed capital and risk management procedures will improve the public image.
When it comes to the agency’s main goal of economic development, Hall says a venture capital bill would be an important tool to state job creation efforts. But those efforts have been slow. Walker acknowledged last week that a legislative measure isn’t quite ready.
“When we were on our tour of the state last week with the governor, individuals from different parts of the state talked about the importance of this extra pot of money being available for venture opportunities, for true startups,” Hall said. “You need many items in your arsenal to really grow economic development appropriately in the state. This is one of them.”
Hall had asked the State of Wisconsin Investment Board in a letter late last year to help the planned venture capital “fund-of-funds” by co-investing $200 million of state pension funds. After SWIB rejected that suggestion, Hall said during his recent confirmation hearing that he would look elsewhere for that co-investment.
Hall said the main disagreement between legislators has been over how to fund it, even with a big surplus to work with in the next budget.
“Where does this money come from?” Hall asked. “One assumes this is going to be taken from another program someplace, unless you’re going to take some of the excess surplus. But do you use that for startups? Do you use that for roads? There’s a long list of priorities attached to those funds.”
Listen to the interview.