Sunday, March 22, 2009

Biotech development could be a valuable job generator

By Jeff Hansel
Post-Bulletin, Rochester MN

Most communities across the United States face job losses this year.

But Pine Island and surrounding communities stand on a precipice with the Elk Run biotechnology project that could bring thousands of new jobs to the region, increase construction, draw national attention, boost population growth and add a whirlwind of activity during the coming decade.

California-based Tower Investments, and venture-capital group Burrill & Co., also of California, announced that nearly $1 billion is in play for development of a biotechnology center at Elk Run.
Burrill specializes in the life sciences.

"It's a big plan. There could be thousands of jobs out there eventually," said Gary Smith, president of Rochester Area Economic Development.

People in the know say Burrill is attracted by Pine Island's location within a short driving distance to researchers at Mayo Clinic and a short commute to research labs at the University of Minnesota in the Twin Cities.

The biotechnology project will also have access to the Hormel Institute in Austin, IBM in Rochester and the Minnesota Partnership for Biotechnology and Medical Genomics, which is located in Rochester and the Twin Cities with a Rochester headquarters.

There are hundreds of biotech companies, large and small, scattered throughout the state, such as Medtronic in the Twin Cities and Kerry Bioscience in Rochester.

And there's a skilled work force and a well-established educational system that produces doctors and researchers.

Plop down $1 billion to draw biotech companies to Pine Island, and the results could turn Minnesota into a globally competitive biotech powerhouse.

"You can't say enough about the potential that this may hold for the area," said Rep. Steve Drazkowski, R-Wabasha. The most important aspect of the project, he said, "is the jobs it's going to create for the area."

If the biotech project succeeds, Smith said, it would have regional effects. People have been second-guessing the project, he said, but "with the right people engaged with one another, just about anything is possible out there."

"Mayo Clinic has had dialogue with Tower Investments for the past few years as they work toward development of Elk Run," said Mayo spokesman Adam Brase. "We have been asked to participate in some planning activities."

State Rep. Randy Demmer said it's hard to get his arms around the project's potential economic impact.

"I know it's multiple companies. It's a biobusiness park is what it is. So we're talking about a group of companies that would be synergistic," Demmer said.

"Working with a world-class firm like Burrill brings to Elk Run capital, experience, innovation and opportunity that will be transformative for the region," Tower founder and CEO Stephen Marks said in a statement.

Pine Island long ago foresaw the coming competitive nature of the local economic market and positioned the city to take advantage of opportunities that exist now, said City Administrator Abraham Algadi.

The city plan avoids new development in flood zones and residential development along U.S. 52, he said. The city mapped out the best places for retail development, housing and business growth. Biotechnology became the obvious best fit, and a clear plan for the city's future took shape.

"Once you fix this with broad brushes like this, it makes private investment easier," Algadi said.
A few developers came and went before Tower Investments became interested, he said. But now Tower has signed a deal.

"Good things come to those who wait," Algadi said.

"Elk Run is geographically and strategically positioned in a uniquely propitious way. The opportunity to work with Tower on this enterprise is exciting for us especially considering Elk Run's proximity to Rochester, home of Mayo Clinic, and its incredible potential to create and attract bioscience companies to the state," said Burrill founder and CEO G. Steven Burrill.

Reporter Jeff Hansel covers health for the Post-Bulletin. Read his blog, Pulse on Health, at

Wind is at the back of West Michigan's fledgling renewable energy industry

Posted by Julia Bauer The Grand Rapids Press March 15, 2009 05:00AM

GRAND RAPIDS -- Solar power is hot. Wind turbines are terrific. But will renewable energy power up jobs as fast as Michigan's auto industry is switching them off?

"I don't think it's a complete solution, a silver bullet," Grand Rapids lawyer Scott Watson said of the region's growing energy industry.

"But it's one component of silver buckshot."

As alternative energy gathers momentum, area manufacturers are dipping their toes into a widening pool of opportunity.

What they're hoping to find is an incoming tide of customers and a boatload of tax breaks from state and federal coffers.

In the past six months, big wins blew in for Michigan manufacturers contemplating the energy industry: The state set a goal to tap 10 percent of its energy needs from alternate fuels by 2015.

Then last month, renewable energy projects got a boost in the federal stimulus package.

Most West Michigan manufacturers still are mulling the impact of those programs. But they're feeling optimistic.

"I think it certainly will help create a market for wind power, in particular, but also for renewables across the board," Watson said of the state and federal incentives.

"When you have a market for installing this, you have a market for manufacturing components."

No one expects renewable energy to single-handedly replace the automotive jobs lost in West Michigan. The hope is that it has the potential to supplement a company's bottom line.

"We're still going to build cars," said Rick Chapla, of the Grand Rapids economic development agency, The Right Place Inc. "But (with these new products) it's a more diversified base.

The state's car-making muscle will in fact be a leg up for these startups.

"Turbines are not terribly different from the supply chain associated with the auto industry," Chapla said. "It is a very big opportunity."

Two high-profile endeavors already are tapping wind and solar.

United Solar Ovonic, a division of Energy Conversion Devices in Auburn Hills, has two plants, each 280,000 square feet, in Greenville.

The maker of flexible solar film is running a healthy backlog and employs more than 400 in the Montcalm County town.

Although solar power is hot, the best bet for Michigan is wind-driven, said Watson. He has studied the tax breaks written into the federal stimulus package to nurture the nation's bid for energy independence.

"We've got great wind, particularly offshore," Watson said. "It's all about the resource.

"With the current technology, the resource (in Michigan) is better for wind technology than solar."

Wind power made big news last week.

On Wednesday, Spanish logistics firm Berge Logistica Energetica and Rockford Construction of Grand Rapids formed Rockford Berge.

It expects to find sites and build wind farms in Michigan and eventually around the Great Lakes.

The new venture plans to advise and manage projects with wind turbines from 150 to 350 feet tall, or higher.

Saturday, March 21, 2009

Is Chicago our kind of town?

So, should this region rebrand itself as Chicagoland?

Traveling abroad, should we say we hail from the greater Chicago area, you know, land of the Cubs, Bears, White Sox? (And would that make our Big 10 team, gulp, the Northwestern Wildcats?)

The benefits of sharing Chicago's halo are obvious.

From Berlin to Beijing, people immediately recognize Chicago and think of a vibrant, progressive city. Say Michigan, and they think Detroit in ruins, then cars and automakers on the verge of bankruptcy.

So line up behind Chicago if you want to make a splash in the global marketplace -- that was the advice of Chicago author Richard Longworth last week to the Economic Club of Grand Rapids.
"West Michigan has more to do with Chicago than it does with Detroit or even Lansing," said Longworth, author of the book "Caught in the Middle: America's Heartland in the Age of Globalism."

Give up on the quaint idea of state identities, said Longworth, a senior fellow at the Chicago Council on Global Affairs. "Globalization couldn't care less about state lines drawn two centuries ago.

"We're basically one economy, and we should be working together." More here.

Great Lakes States Sweep Metro Rankings

In addition to racking up the most number of projests totals in the statewide and micropolitan categories, the Great lakes states also dominated the metro ranking as well.

Seven of the top Tier One metros came from the Great Lakes including Chicago-Naperville-Joliet, Ill./Ind./Wis.; Cincinnati-Middletown, Ohio/Ky./Ind.; Detroit-Warren-Livonia, Mich.; New York-Newark-Edison, N.Y./N.J./Pa.; Pittsburgh, Pa.; Columbus, Ohio; and Cleveland-Elyria-Mentor, Ohio.

In the Tier Two category (populations between 200,000 and 1 million) the Great Lakes state placed six cities in the top 10 including Dayton, Ohio; Akron, Ohio; Toledo, Ohio; Allentown-Bethlehem-Easton, Pa./N.J.; Grand Rapids-Wyoming, Mich.; and Youngstown-Warren-Boardman, Ohio/Pa.

And among Tier Three metropolitan areas (less than 200,000 in population) placed five in the top ten. Those winning honors were Springfield, Ohio; Jackson, Mich; Wheeling, W.Va./Ohio; Elkhart-Goshen, Ind.; and Muskegon-Norton Shores, Mich.

The rankings confirm that the Great Lakes states region is the seeing more new projects and business expansion than other part of the U. S. and are no longer deserving of "rust belt" moniker.

Thursday, March 12, 2009

Great Lakes States Place Six of Ten in Governor's Cup Rankings for Biz Growth

Ohio won Site Selection magazine's Governor's Cup for the third year in a row and earned its fourth victory in the past six years; it won the 2003 award as well.

Ohio's 503-project finish narrowly edged runner-up Texas' 497 qualified projects. Michigan, Pennsylvania and North Carolina complete the top five finishers with 296, 290 and 245 projects, respectively.

Rounding out the Top Ten were New York, Virginina, Illinois, Kentucky and Indiana.

While many believe that southern and southwestern states are gaining the most new business investments, these Site Selection rankings prove that the Great Lakes region is where busineses are placing their money. A skilled workforce, central access to markets and improving regulatory environments have allowed the region to shed its "rust belt" image," said GLEDC president Rod Crider. More here.

Great Lakes States Claim Top Three of Four Spots in Micro Rankings

Ohio, Pennsylvania and Michigan were three of the top four states cited by Site Selection magazine for new business growth within micropolitan areas. Great Lakes states dominated the rankings by garnering half of the top ten spots.

A micropolitan area is designated by the U.S. Census Bureau as a largely rural economy that includes a city of at least 10,000 people but less than 50,000 and covers at least one county. Of the 3,141 counties in the U.S., 694 are classified as micro areas and account for about 10 percent of America's population.

The Site Selection Rankings recognize the micropolitan areas with the most new or expanded capital projects the previous year as tracked by magazine publisher Conway Data Inc.'s New Plant Database. More here.

Saturday, March 7, 2009

Communities Must Play a Role in the Road to Renewal

Reprinted from Great Lakes Manufacturing Council Focus, February, 2009

The uncertainty surrounding the automotive industry, the national economy and the Great Lakes Region will continue throughout 2009. If you want to hear the latest thinking on where the industry is headed the Center for Automotive Research is holding a summit on how communities, industry and other stakeholders can respond to the changing automotive environment. This inaugural event, called the Road to Renewal, will be held April 14-15, 2009 at the Renaissance Chicago Hotel in Chicago,

Dr. Sean McAlinden, CAR’s chief economist, and Dr. David Cole, CAR’s chairman, and other speakers will offer their views on the future of the industry, provide further insights into changes communities can expect and suggest ways in which communities might plan and partner to better position themselves for future prosperity.The United States Department of Commerce Economic Development Administration has provided seed funding for this event, and the University of Michigan is an active participant in developing the agenda that will focus on ways communities can plan and partner in order to prosper—either through transition or transformation.

Following is an interview with CAR Chairman David Cole:

What is the impact of the auto industry crisis on the Great Lakes Region?

This is a terrifying time in the Great Lakes Region. Manufacturing, specifically the auto industry, is undergoing a massive transformation and no one is sure how things will pan out. Many communities in the Great Lakes Region have either lost manufacturing plants or face losing them in the future.

Unfortunately, many people have forgotten that manufacturing in the Great Lakes Region is a critical part of the regional and overall U.S. economy. We must change that and put manufacturing back on the front burner. Communities in the Great Lakes Region can play a key role but they must know the facts about manufacturing.

What is the outlook for the auto industry in the Great Lakes Region?

The outlook for the auto industry over the next few months is dismal because auto sales are at a depression level. However, the prospects for the industry are considerably brighter in the mid- and long-term for several key reasons.

First, we are scrapping about 13 million vehicles a year so there is pent-up demand and that will lead to significant increases in sales.

Second, the current restructuring in the industry will lead to significantly lower costs as the break-even volume is dramatically lowered.

Third, the industry, particularly General Motors, Ford and Chrysler, is reducing capacity by more than 3 million units, In addition there is evidence that there is much more discipline to limit production, which should drive the market to a sellers’ rather than the buyers’ market we have been in for over 10 years.

Fourth, labor costs for the domestic three automakers will reach parity with the international manufacturers.

What impact will that have on communities?

Any community with manufacturing operations is in trouble right now. Automotive suppliers with minimal debt that have a good blend of customers, high quality manufacturing and engineering capabilities and produce engineered components and systems will be survivors. On the other hand, commodity suppliers will be in trouble. This includes products such as simple stampings, nuts and bolts and plastic moldings … any products where tools can be easily moved to another facility.

Is there a future for the auto industry in the Great Lakes Region?

Absolutely, but communities must be strategic in working to retain or attract new businesses. Community leaders must build strong personal relationships with the leaders of the manufacturing operations in their community. They need to gain the confidence of those who make decisions. It is particularly important to have a strong educational system which recognizes that future auto production workers will require a minimum of a two year community college education to qualify for employment.

A prime example of a community effort (in this case at the state level) is GM’s recent decision to locate a battery production facility in Michigan. The only reason that factory did not go elsewhere was because the Michigan Economic Development Corporation put together a comprehensive proposal to bring the work to Michigan. It was able to do so because it has a strong relationship with the automaker and an understanding of its needs.

Community leaders need to make sure they are in intimate touch with every stakeholder in the community including schools, banks and utilities … all stakeholders with an interest in a prosperous and growing community.

How big is manufacturing’s impact on the U.S. economy?

We have forgotten what is important and what is not important. This was evident last year when the automakers went to Washington to ask for loans. It was clear Washington did not understand manufacturing and its critical role in the U.S. economy.

For example, U.S. automotive suppliers represent a $240 billion industry. They employ almost 700,000 people at about 8,600 plant locations across the country. Supplier products account for more than two-thirds of the content on each new vehicle. There over 300,000 direct jobs in the auto manufacturers. For every auto supplier job there are nearly 5 additional jobs. Auto manufacturers have an economic multiplier of over 7 meaning for every job in their organizations there are over 6 elsewhere. For an auto assembly plant, the multiplier is about 9 or 10. Any way you look at it this industry is a very important part of our economy.

What are the skill needs of the new workforce? Will we have enough people with the right skills?

Manufacturing is a knowledge-based industry and an educated workforce is essential. After we get past the current economic turmoil we will not have enough skilled workers to meet the growing demand for advanced manufacturing jobs as the exit of the “baby boomers” gains momentum.

Going forward that workforce must be readily adaptable to change, prepared for lifelong learning experience and have an education well beyond high school. The Great Lakes Region has the talent and resources to provide the workforce of the future but we must establish a more collaborative relationship between business and the education and training communities to ensure that the appropriate human resources are available.

In the past we were concerned with the idea of “offshoring” for cheap labor. We must guard against a new movement that could be “offshoring” for skilled workers.

What changes will occur in our communities as a result of technological innovation?

Technology is changing at an incredible pace. Companies that can effectively operate at the leading edge of knowledge and are creative and innovative have a distinct competitive advantage. The foundation for this innovative culture is a highly educated and motivated workforce. This requires comprehensive and strategic policies ranging from education to tax and investment. We are increasingly in an “innovate or die” environment and this includes communities as well as businesses.

What can communities do?

Communities need to hold meetings and, in general, raise awareness of the challenge. It is a lot easier to retain a job than to acquire a new one. Communities should be deeply involved in all aspects of economic development beginning with nurturing personal relationships between community leaders and manufacturing employees and leaders. A continuous dialog is required.

Communities must also develop a comprehensive strategy to ensure that they are aligned with both the jobs of today and jobs of the future. The educational institutions must operate at a high level of excellence to deliver an appropriately skilled workforce.

Port seeks $26.5 million for makeover of docks, warehouses

Cleveland's port seeks a $26.5 million makeover of its docks and warehouses, driven by the prospect of a wind turbine manufacturing plant opening on port land.

M. Torres Group, based in Pamplona, Spain, could generate up to 200 jobs over three years, partly to crank out wind turbines for the county's proposed pilot project on Lake Erie, the port's application for state money shows.

Over 10 years, the company could employ up to 3,000 if it successfully taps the nation's growing market for wind turbines, the application shows.

M. Torres, which does little business in the United States, would eventually fill the port's largest warehouse, a 144,000-square-foot facility that can handle rail cars.

That would strain the port's ability to handle current operations and attract new business, the port says.

So it's applying for state and federal job-stimulus money to improve the port. Proposed changes include a new warehouse and filling in one of the port's three slips.

The port is pitching the investment, even as it proposes to relocate its operations, west of Cleveland Browns Stadium, to a site north of East 55th Street.

Currently, the port plans a phased move that starts in the early to mid 2020s and finishes in the late 2030s, Wasserman said Friday.

"The underlying objective while we're still there is to have the busiest port we can to have maximum effect on the regional economy," Wasserman said.

City and county officials appear to favor the $26.5 million in improvements at the current site.

In a news release from the port, Mayor Frank Jackson said careful planning by the port will spark job growth.

Encouraging investment is key to a "community where people are not exactly knocking doors down to get into," Cuyahoga County Commissioner Tim Hagan said in an interview.

The port's effort meshes with the county's request last month for $28 million in federal stimulus money for the wind turbine project on Lake Erie, said county development Director Paul Oyaski.

That would be half of an estimated $56 million needed to erect six to eight wind turbines on Lake Erie, connect them to the region's electric grid, and establish an off-shore wind research and testing center, county officials said.

M. Torres is apparently considering a major investment in the project. Gov. Ted Strickland first named the company as having an interest in Ohio in December.

The state's development department leads negotiations with M. Torres, which so far has declined to comment.

The port would need $1million to outfit its largest warehouse if M. Torres decides to come, according to the port's application for state funding.

Other improvements under the $26.5 million plan include:

• $10.2 million for a new manufacturing-warehouse. The 100,0000-square-foot building would sit southwest of the port's western slip.
• $2.2 million to fill in the port's eastern slip, which is owned by the city. The work would create 3.5 acres of new land and allow a new, 1,583-foot berth for Great Lakes ships.
• $10 million to expand a warehouse. It sits just west of the slip that would be filled in.
• $2.2 million for a mobile crane. The Manitowoc crane could lift up to 200 tons, and it would replace the "Buckeye Booster."

The 150-ton crane underwent $454,000 in repairs in 2001. But port officials say the stationary, 45-year-old crane is no longer useful.

The port applied for $13 million from the state, under its $1.57 billion job-stimulus plan. The port will apply soon for $13.5 million in money from the Economic Development Administration, under the U.S. Department of Commerce.

The improvements would bolster the port's ability to handle more shipping. Wasserman and his staff have an ambitious plan to capture more business through international and Canadian ports, though some are skeptical such business is available.

Those opposed to the port's big move hope the investment signals the port will stay where it's at.

The port's proposed relocation to East 55th will cost hundreds of millions of dollars and displace a marina, fishing pier and parkland.

The port says it wants to replace and ehance lake-side amenities, but opponents say the costly move will take much longer than the port estimates.

"This makes sense for the port and for taxpayers, to make the best use of the current location," said lawyer Bill Gruber, one of the leading opponents. "It's better than destroying a park along our lakefront."

Local chamber pushing Great Lakes economic plan

Thursday, February 19, 2009
By Dave Alexander

MUSKEGON -- Muskegon Area Chamber of Commerce officials were among a group of 40 in Washington last week to lobby not for a larger piece of the economic stimulus package but for longer-term investment in the Great Lakes.

Chamber leaders from 12 states and two Canadian provinces met with lawmakers on Capitol Hill for three days last week to push a five-point strategic plan for the Great Lakes region.

The economic development strategy touches on the environment, border issues with Canada, transportation funding and federal immigration. A regional innovation strategy is needed to transform the Great Lakes economy, the chamber leaders argued.

"When taken as all 12 states and the two provinces, our gross domestic product makes us the second-largest economy in the world," said Janessa Stroud, vice president of government affairs for the Muskegon chamber. "I think we turned some heads in Washington."

The chamber strategy is to "leverage" the Great Lakes for economic development, Stroud said. A future regional summit on port development and binational issues with Canada is in the works, she said.

Great Lakes restoration legislation that has not made it out of Congress and was not specifically addressed in the economic stimulus plan signed by President Obama Tuesday is also key to the chambers' agenda, Stroud said.

The fact that Obama lived along the shores of Lake Michigan in Chicago and has been a co-sponsor of past Great Lakes restoration legislation gives chamber officials hope that the issue could move through Congress in late 2009 or early 2010, Stroud said. Restoration of the lakes could include $20 billion over five years to upgrade waste and stormwater infrastructure.

Another $150 million annually could go to clean up sediments in waterways that feed the Great Lakes.

Study confirms it: Michigan needs to work at attracting best and brightest

Posted by Jeff Cranson The Grand Rapids Press February 25, 2009 16:58PM

You have no doubt heard this before, but a national study concludes that Michigan's metro areas need to get much better at keeping and attracting young workers, retirees and well-educated immigrants

Our state lags far behind others in each of those categories, according to Land Policy Institute at Michigan State University.

What makes this hard to digest is the study's secondary findings that people increasingly decide where to live based more on quality-of-life factors than career opportunities.

For many of us, Michigan is synonymous with quality of life.

So why is a state still abundant with recreational opportunities -- Great Lakes, pristine beaches, forests, dozens of downhill and nordic skiing facilities -- not getting the message out?

Perhaps because Michigan only makes the national news when auto executives and labor leaders trek to Washington, D.C. seeking money for what people outside the Midwest see as an antiquated and undeserving industry.

Whether that perception is fair doesn't matter.

Gov. Jennifer Granholm and others rightly put the focus on the Michigan brain drain a few years back with the Cool Cities initiative. The concept is simple and should resonate across party lines: Maintaining a knowledge class begins with creating an environment of tolerance for lifestyle and ethnicity that encourages creativity, learning and business districts with all the things that make life fun.

"People who create the most jobs directly and indirectly are also those people moving to those places in the country that have the best amenities and quality of life," said Dr. Soji Adelaja, the report's lead author and director of the Land Policy Institute. "They are seeking places first, not jobs first."

But the jobs can also be part of the draw. That point came across today In a meeting with Press editors, Van Andel Institute Chairman and CEO David Van Andel, and Jeffrey Trent, the institute's new director.

With great clarity, both men made the point that theirs and other life-science enterprises will create the kinds of jobs that help transform the state's economy. Van Andel said the slumping economy can actually work in the VAI's favor because of the talent that is available.
He said he is "bullish" on the institute's future.

And those jobs would go to exactly the type of people discussed in the study. Improving the cities where those facilities are located can only help.

Adelja, the study's author, concludes that economic development types need a new model, one that focuses less on tax incentives and more on increasing our population of "knowledge workers" who "look for interesting places to live, move there and enable economic activity to follow them, including job creation for themselves."

Who can argue with that?

Tough economy, layoffs increase interest in entrepreneurship in Ann Arbor

by Nathan Bomey Ann Arbor Business Review
Thursday January 29, 2009, 6:50 AM

The perceived risk in joining a small company or starting your own business is rapidly shrinking in Michigan as many large corporations - where job security was long-assumed- are laying off workers in the thousands.

The shift appears to be closing the gap between the uncertainty of starting a company and loss of stability in corporate positions.
As a result, today's economic climate could boost Michigan's entrepreneurial ambitions even as the unemployment rate ticks up to 10.6 percent.

Among the signs that the Ann Arbor region is growing interest in startups:
• 550 people - including a diverse mix of entrepreneurs ranging in age from college students to senior citizens - attended the Annual Collaboration for Entrepreneurship on Jan. 22 at Washtenaw Community College. A coalition of several local organizations led the event.

• The Ann Arbor-based statewide nonprofit Great Lakes Entrepreneur's Quest is reporting a significant uptick in interest in its biannual entrepreneurial business plan competition, said Diane Durance, executive director.

• Distribution of Ann Arbor SPARK's job listings for entrepreneurial companies has tripled since 2007.

Michigan has long been defined by a culture that is wary of entrepreneurialism and cautious about starting a company, several experts have said.

But contraction at the domestic automakers and the supplier community, job cuts in the pharmaceutical industry and the sluggish housing market are prompting some Michigan workers to reconsider entrepreneurialism as a livelihood.

"One of the positive effects of this horrible downturn that we're in is you do get that sense of, 'Well I have nothing to lose now. I can do what I've always wanted to do,'" Durance said. "I see people pursuing their dreams."

As Michigan's culture becomes more receptive of entrepreneurialism, local economic development officials believe the economy will become stronger.

Amy Cell, managing director of talent enhancement for economic development group Ann Arbor SPARK, said Michigan can't afford to wait for existing companies to rebuild its economy.

"I think the big thing for 2009 is entrepreneurship, because we are not going go to be able to get out of this by attracting big companies that are expanding," Cell said. More here.