Magazine article American Banker

Bankers Envision World Trade Center as 30-Story Cure for Iowa's Economy; Proposal to Wed Public and Private Sectors Gets Boost from Legislature

Magazine article American Banker

Bankers Envision World Trade Center as 30-Story Cure for Iowa's Economy; Proposal to Wed Public and Private Sectors Gets Boost from Legislature

Article excerpt

DES MOINES -- "Economic growth" is uttered in this depressed agricultural capital with the reverence due the holy grail, and some Iowa bankers believe they know where to find it -- in a world trade center to be built here in the nation's heartland.

For more than two years, John Ruan, chairman of Bankers Trust Co. and putative leader of the Des Moines business establishment, has been campaigning for an office tower and exhibition complex to attract buyers from around the world and impress them with Iowa's leadership in agriculture and related products and technologies.

Growth in business activity and jobs associated with the center would make it easier for Iowa to diversify beyond agriculture and reverse its population loss of recent years, according to Bradley L. Burt, a former employee of Mr. Ruan's bank and one of eight people now staffing the trade center project.

Early responses to the plan were critical at best. But now that Iowa is reeling from the crisis in the farm economy, the world trade center idea has gained credibility and momentum as the hunt for economic growth has been taken up by the state Legislature.

On Feb. 13, the Iowa House voted 52-45 to approve a state lottery, proceeds of which would be allocated to economic growth programs, including trade development. Of $230 million in anticipated lottery proceeds over five years, $30 million would be applied toward establishment of the trade center and related activities.

Supporters say it will cost $75 million to erect the building and launch other aspects of the plan, such as an educational institute, satellite facilities in smaller cities and towns, and marketing management. The private capital contribution is budgeted at $45 million -- which is also the estimated construction cost -- over four years. Boosters Propose Partnership

Mr. Ruan envisioned the trade center as a "public-private partnership," meaning that neither the state nor the business community needs to shoulder the entire burden. His plan calls for active state involvement in operating and promoting the center, which is why he wants to see it in the capital city of Des Moines. Potential buyers in foreign countries, to which Iowa will want to sell its products, are accustomed to government intervention and would not be repelled by it, as some Americans might be.

For example, as lessor of space in the trade center, the state might charge as little as $3 per square foot. This would encourage occupancy by Iowa sellers, particularly entrepreneurs who are discouraged by the prevailing $10 rate in downtown Des Moines. Office space in New York and other financial centers costs much more.

Convinced it is a no-risk proposition, Mr. Ruan has spent an undisclosed amount of his own funds and promised to contribute millions of dollars more to help realize his dream. If it succeeds, it could not only help turn around one of the nation's most hard-pressed state economies, but it could turn Mr. Ruan and his close associates -- bankers by trade -- into local heroes.

"As bankers we have certain responsibilities to our communities, and the world trade center, by helping our state and its economy, will help our banks," Mr. Burt said. "I find that my banking skills are perfect in helping build support for the trade center in the private sector as well as in the government." World Food Prize

Mr. Ruan has offered to endow, if the state matches his $1 million, a World Food Prize to be awarded under the trade center's auspices to those who make significant contributions to solving food production and nutrition problems. But Mr. Ruan, who controls trucking and insurance companies in addition to Iowa's largest independent bank, has lately been pursuing his crusade from behind the scenes.

For the role of public spokesman he enlisted Bankers Trust's highly regarded president and chief executive officer, Herman Kilpper. …

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