Sunday, May 31, 2009

Milwaukee chamber boss offers tips for development

By Dave Alexander

MUSKEGON -- Economic and community development has much more to do with people and their skills than it does with tax policy, highways or the fresh water of Lake Michigan.

That was the message the head of the Metropolitan Milwaukee Association of Commerce gave a Muskegon business group Friday at the Holiday Inn Muskegon Harbor.

Milwaukee chamber President Tim Sheehy acknowledged that his community and Muskegon share a tremendous asset in Lake Michigan but he learned from an economic minister of Singapore on a trip a decade ago what was important to a region's economic future.

"Milwaukee, Muskegon and Singapore all have great deep-water ports," Sheehy told the Business for Breakfast gathering of the Muskegon Area Chamber of Commerce. But the minister said his country's future was tied to it being a "port of human knowledge."

The game changer in attracting companies to a community like Milwaukee or Muskegon is the population's education and the workers' skills, he said.

The Milwaukee economic development strategy is to focus on two key indicators: the percentage of work-age residents with at least a bachelor's degree and the percentage of work-age residents without a high school degree.

The most important economic development strategy should be to increase the former and decrease the latter, he said.

Sheehy's numbers show Muskegon has a lot of work to do in improving its "human capital."

Milwaukee has 27 percent of its 18-to-64-year-olds with at least a four-year college degree, compared to only 13 percent for Muskegon County. As for non high school graduates of the same age, Milwaukee has 11 percent, compared to Muskegon's 17 percent.

Sunday, May 17, 2009

Offshore Wind Energy Proposed for Great Lakes

Buffalo, United States []

Following the release of offhsore wind development guidelines last week by President Barack Obama and Interior Secretary Ken Salazar, New York Power Authority (NYPA) president and CEO Richard Kessel announced a major public-private initiative for the potential development of wind power projects in the New York State waters of Lake Erie and Lake Ontario.

NYPA released a Request for Expressions of Interest (RFEI) to initiate efforts to develop offshore wind projects in the Great Lakes. A Request for Proposals (RFP) to examine technical issues related to the viability of such projects is expected to be released before the end of the month.

To carry out the initiative known as the Great Lakes Offshore Wind Project, NYPA, with the support of wind power proponents including National Grid, the New York State Energy Research and Development Authority, the New York State Department of Environmental Conservation, state and local environmental organizations, wind power developers and the University of Buffalo, is gathering a wide range of environmental, economic development, technical, financial and other information to serve as the foundation for the possible installation of wind power projects by one or more private wind power developers, sized to a minimum of 120 megawatts.

The first step in the initiative was taken when NYPA issued the RFEI for environmental, economic development, technical, operational, socio-economic, financial and other information from the wind power industry. This information will assist NYPA in determining the feasibility of taking the next step of preparing a wind power development RFP which, if issued, would be expected to result in high-quality proposals for the construction of wind generating projects.

The American Wind Energy Association (AWEA) welcomed the announcement.

“This is a great sign for offshore wind energy in the U.S.,” said Denise Bode, CEO of AWEA. “As we seek to dramatically expand wind energy, both on- and offshore, it is vital that we commit to long-term stable policies such as the Renewable Electricity Standard to allow the market to reach its full potential and enable businesses to build new factories and create new jobs.”

Governor's Report: Michigan is Still in Motion

The automotive industry may have hit a stop sign, but Gov. Jennifer Granholm's aggressive strategy is maintaining forward momentum in the crown of the Great Lakes. From motion pictures to nanotechnology, the Wolverine State is in the hunt for new jobs.

By Jack Rogers

Nowhere has this year's economic debacle hit harder in the United States than in Michigan. The state that is synonymous with a U.S. auto industry on the brink of bankruptcy currently is suffering with the nation's highest double-digit unemployment rates.

To add insult to injury, the crown jewel of Michigan's economic development efforts—a $17-billion project between Midland, MI-based Dow Chemical and the government of Kuwait—was canceled abruptly by the Kuwaitis earlier this year when they felt the bite of the sudden plunge in the price of oil.

So it is understandable if you wouldn't expect to hear a lot of good news coming from the crown of the Great Lakes these days. But you would be wrong.

Governor Jennifer Granholm and her economic development team have been extraordinarily busy since the beginning of the year. Hardly a week goes by without the announcement of a major new job-creation initiative from the governor's office. More than a dozen new projects expected to create nearly 9,000 new jobs and an investment of more than $300 million in the state have been unveiled since the beginning of the year, and Granholm says more are on the way.

Diversification has been the watchword of Michigan's counterattack against the pervasive economic gloom.

"We are undertaking the most aggressive economic diversification strategy in the nation, and helping Michigan manufacturers expand into new, high-growth sectors is a critical component of that effort," Granholm says. More here.

Marketing paying off in Tecumseh

By David Frownfelder
Daily Telegram
Wed Apr 08, 2009, 05:30 PM EDT


To find new businesses and attract tourists, Tecumseh is turning to the Internet and partnerships with universities and business groups.

Aggressively marketing itself is key for economic development in the city, economic development director Paula Holtz said Monday in delivering her department’s annual report at the Tecumseh City Council meeting.

“When we get the opportunity to talk to a business that wants to come to Tecumseh, we leave no stone unturned,” Holtz said.

The city is advertising on CPIX, a major commercial and industrial real estate Web site in Michigan. In addition, the Tecumseh Business and Technology Campus Web site has generated some interest, she said.

“CPIX is being used to market the campus, and checking the (Tech Park) Web site, we found 50 hits recently,” Holtz said.

A joint effort with Michigan State University and the Michigan Corn Growers Association is being explored for the campus. What form that will take has not been determined, as this is in the early stages of development.

“These are baby steps,” Holtz said.

The city recently joined a site selector network that matches up businesses with potential sites. Tecumseh is targeting smaller industrial and commercial enterprises, which add fewer than 100 jobs but are vital for the area’s economy, Holtz and city manager Kevin Welch explained.

Business recruitment is only part of the city’s marketing plan. Advertising in other markets such as Toledo, Jackson and Ann Arbor has paid off in bringing people to Tecumseh to visit. Holtz cited festivals such as the annual powwow at Cal Zorn Park in June, Promenade Tecumseh and the Appleumpkin Festival as examples of how well the marketing is paying off.

“The Appleumpkin (Festival) has really taken off. The past two years we have had record crowds,” Holtz said. “And, the powwow continues to grow.” More here.

Recession highlights importance of regional economic development

By Bill Ihlenfeldt

The time for Momentum West is more critical now than ever!

We all are struggling to come to grips with the economic condition of our world today. I don't remember a time in my life when it has been a more critical issue. We are in a period of trial and error in which leaders worldwide are struggling to find the key to turn things around. We also hear that no matter what occurs, the future will be different.

Western Wisconsin has always been somewhat insulated from these types of downturns, perhaps because we have avoided the major fluctuations in housing, wages, employment and other areas. One could argue that causes other problems, but at this time it is something of a positive factor. We have also worked well together in developing and diversifying the region in which we live. Perhaps the loss of employers such as Uniroyal has made us more aware of what can happen, and this has stimulated us to look to the future with the optimism that working hard together pays off.

Organizations such as Momentum Chippewa Valley and United St. Croix Valley have worked to market their respective regions and tackle common regional issues for about 20 years. Today, the scene has changed, and their successes have bred new, larger organizations in other parts of the state. We also have talked for many years about the I-94 Corridor, or connection, because of the common thread the interstate creates between Minneapolis-St. Paul and the Chippewa Valley.

Leaders in the region soon realized that this common thread created a natural environment with common needs, issues and problems. Those same leaders also realized that working together gives us more clout when dealing with issues downstate and nationally, and a new, larger organization was born: Momentum West.

Momentum West is a regional marketing organization made up of 10 counties in western Wisconsin: Barron, Chippewa, Clark, Dunn, Eau Claire, Pepin, Pierce, Polk, Rusk and St. Croix.

Volunteers from these counties have been working for the past year to craft an organization that will make certain that our region is recognized in Madison, nationwide and even globally.

Momentum West is largely funded by the private sector, which is critical, because if we are to create a better economy for the region, then the business community must guide us. Higher education also is involved because a highly trained workforce is a key to a better economy, while county governments play a role because of their economic development units and emphasis.

Momentum West provides a venue to bring all of these resources to the table to carve a new image and to find new directions and ideas for the region with a private-sector basis. It is not another economic development layer, nor is it doing work similar to local chambers of commerce. Rather, it is an organization that transcends localities and looks at the big picture for the region.

It is designed to make the state and nation aware of our great qualities and work to help local units of government, chambers of commerce and economic development organizations move in directions that are not possible independently.

Together, we can influence our future as a region. Because we cannot be complacent, the time is right for Momentum West.

Ihlenfeldt is volunteer interim director of Momentum West and retired president of Chippewa Valley Technical College.

Promises to create new jobs fall short

Many tax incentives go unused because firms fail to deliver on pledge

Michigan's major economic development tool has produced only about 24,000 new jobs over its 14-year life, a Free Press examination has found.

State officials also say the program -- tax incentives granted for jobs that are created or saved -- has retained more than 43,000 positions.

The state, however, has shed more than 700,000 jobs since the decade began. In March of this year alone, 25,000 people in Michigan joined the unemployment rolls.

Overall, the Free Press found that when it comes to job creation projects in Michigan, reality often falls short of promises.

Each month, state economic development officials trumpet business expansions and relocations that have won tax credits because they will add jobs in Michigan even as the auto industry's slump makes that difficult.

The Free Press studied 195 of these incentives awarded from 1999 through 2005 and found that slightly more than half of them were not fully utilized or never used at all because companies failed to create enough jobs to claim the tax credits.

The Michigan Economic Development Corp. defends the incentives, which have cost $411 million, noting that companies benefit only if they create jobs. "It has had a big impact," said Peter Anastor, the agency's manager of community and urban development.

But Michael LaFaive, a director at the Mackinac Center for Public Policy, said: "This is a job announcement program, not a real jobs program." More here.

Thursday, May 14, 2009

Phone-based service firms drawn to Northeast Ohio

by Tom Breckenridge and Michelle Jarboe/Plain Dealer Reporters
Monday May 04, 2009, 7:31 PM

CLEVELAND — Opportunity is calling.

Companies specializing in phone-based service -- from telemarketing to technical support -- have hired thousands of Northeast Ohioans in recent years.

Experts say our region is fertile ground for such companies, which are drawn by attributes many see as a downer -- lots of skilled jobless workers and empty buildings at busy crossroads.

Call center biggies, like TeleTech Holdings Inc. and InfoCision Management Corp., have opened offices from the Youngstown area to Lorain, as have smaller, more specialized operators.

Many of these jobs, paying $10 to $14 an hour, aren't the focus of most economic development strategies.

But many provide benefits and complement long-term strategies to bring higher-skilled, higher-paying jobs to the region, economists say.

"Not everybody can work at high-tech jobs, or have MBAs or Ph.D.s," said Ziona Austrian, director of the Center for Economic Development at Cleveland State University. "These jobs fit people with different skill levels and different educational levels."

The latest calling operation to land here is Collectcorp Corp., which plans to bring 60 jobs to an Engle Road office building in Middleburg Heights this year, officials said. The company anticipates having up to 135 jobs by the end of 2010.

The Phoenix-based company specializes in loan and credit collections for dozens of large companies, ranging from American Express to Bell Canada.

Collectcorp liked the region's work force and the proximity to Cleveland Hopkins International Airport. The company could receive more than $200,000 in tax breaks from Ohio and the suburb.

"The increase of our U.S.-based client business has increased our capacity needs," company Chief Executive Nicholas Wilson said in a press release Monday.

Team NEO, the region's leading business-development group, believes companies specializing in call center services are a growing sector.

Such companies account for about 1 percent of the region's $170 billion annual economic output, said Carin Rockind, head of Team NEO's marketing and communications.

Real estate brokers say that roughly a half-dozen companies are scouting Northeast Ohio sites for call centers or customer support operations.

Some of the companies already are in Northeast Ohio, while others have just a small presence here or would be new to the market.

Most are looking at suburban locations, which provide ample parking, though a few companies have expressed interest in setting up call centers in downtown Cleveland.

David Browning, managing director of the CB Richard Ellis brokerage in Cleveland, said he's aware of four or five potential call center deals in Northeast Ohio.

Two of them are in final lease negotiations and might be announced within two months, he said.

"I'm a little surprised by it, in that we clearly are in an economic downturn where a lot of firms are shedding jobs," said Browning, who has seen a small wave of interest in call centers during the last 60 to 90 days. "To all of a sudden have a category like this, call centers -- and it's various industries that these call centers are supporting -- it's good for the market and it's good for employment."

Browning and other brokers would not identify the companies that are seeking space.

An unidentified call center operator recently toured the former Cole National Corp. headquarters in Twinsburg.

Larry Finch, the city's director of community planning and development, said the company is looking for 50,000 to 150,000 square feet. The center might employ 600 people, with room to grow.

"I understand they're considering a couple other locations, in other areas and other states," said Finch, describing conversations with the company as "preliminary."

The U.S. call center market has experienced a slowdown since late 2006, but researchers said call centers actually have added jobs during the past year.

Some companies that sent customer service overseas are rethinking outsourcing and bringing call centers home.

"Although there has been a lot of growth internationally, there's been a lot domestically, as well," said Sean Carman, senior director of research and consulting with CB Richard Ellis' labor analytics group in Phoenix.

He believes companies are putting a greater emphasis on customer service and keeping their existing customers, rather than spending money to woo new ones.

"Every company's got their own reason," he said. "I really haven't had a chance to ask people why they're growing."

Executives with CB Richard Ellis' labor analytics group said that most of the call centers they have scouted for in Ohio involved higher-end skill sets, related to pharmacy, technology, nursing or health.

Though the average starting call center wage in the Midwest was $10.14 per hour last year -- or roughly $21,100 per year -- workers in more specialized fields such as nursing can make more than $45,000 a year, said Jim Trobaugh, a senior vice president with the labor analytics group.

Indiana officials seek to lure more wind energy jobs

Officials with the Indiana Economic Development Corp. and the Indiana Office of Energy Development are in Chicago this week, talking with representatives of wind energy companies during what is being billed as the world’s largest wind conference and trade show.

More than 1,200 exhibitors and about 15,000 people in the national and international wind energy business are expected to attend the conference, Windpower 2009.

Representatives from Duke Energy Corp., various Indiana economic development agencies and researchers from Purdue University also will attend the conference.

In April, the American Wind Energy Association ranked Indiana as the fastest growing state for wind energy installations in 2008. It is estimated that more than 800 megawatts of wind energy will be produced in the state by the end of the year, the IEDC said in a news release.

State officials hope to tout that distinction to companies seeking to develop wind farms.

Last month, Dominion Resources Inc. (NYSE: D) and BP Wind Energy launched the first phase of Fowler Ridge Wind Farm in Benton County, Ind. The largest wind farm east of the Mississippi, Fowler Ridge is expected to generate enough carbon-free electricity to power more than 120,000 homes, according to the release. The wind farm also is expected to create as many as 200 jobs.

“Indiana has risen quickly as a national leader in wind energy development and is a natural location for future investment from the growing industry,” Indiana commerce secretary and IEDC CEO Mitch Roob said in the release.

Study: Ohio's incentives need fine-tuning

A new report on Ohio’s job attraction and retention strategies indicates a 2005 tax reform package has lessened the burden on existing and incoming businesses, but cautions that many reforms lie ahead in making the system work better.

The Ohio Department of Development released a report titled the “Ohio Economic Development Incentive Study,” first commissioned in 2007 and composed of development leaders from around the state. The study looks at Ohio’s job-creation tax incentives, loans and its local development programs along with the bureaucratic backbone of the system.

The good news in the report: A comprehensive tax reform package passed under the Taft administration in 2005 appears to have lessened the burden for business and has helped Ohio be competitive with nearby states. For example, a small manufacturer’s job retention project costs and total tax burden are expected to lessen by about 15 percent based on Ohio’s projected tax structure in 2011.

The tax reform package credited with easing the weight on businesses’ shoulders included a phased-in 21 percent reduction of the state’s personal income tax, a crucial revenue source that hit the spotlight once again this week. State officials on Tuesday said that sagging income tax revenue could lead to tapping Ohio’s rainy day fund to plug a hole of $600 million or more in this year’s budget

A detailed analysis of various business incentives, however, points to a need for improvement in a number of areas, including the state’s job creation tax incentive, a key weapon in its economic development arsenal. The study found that a 150 percent of federal minimum wage requirement for companies proposing to add jobs allows businesses to get a tax break for creating relatively low-paying jobs. Reporting requirements, the study said, also come at companies’ expense and generate “no apparent benefit to the public.” The study recommended the state increase the minimum-wage threshold for job-creation requirements and simplify reporting requirements.

The task force commissioned for the study also looked at localities’ Community Reinvestment Area and Tax Increment Financing district initiatives.

“Tax abatement began in Ohio as a targeted urban development program, but now virtually all areas of the state qualify,” the study said, recommending that Ohio redesign the programs to limit eligibility to a streamlined list of criteria.

The study also took aim at what it considered a fragmented economic development landscape, with hundreds of agencies within the state that can generate confusion for businesses. It urged that economic development incentives provided by the state be standardized and simplified, a recommendation that echoed for top-level operations at the Ohio Department of Development itself.

To download the full report, click here.

Buffalo poised to display its green side to 3,000 visitors

By Stephen T. Watson

If you believe our poor meteorological reputation, bringing a solar power conference to Buffalo is like talking about snow removal in Phoenix or preparing for hurricanes in Minneapolis.

But Buffalo this week hosts one of the largest national conferences on solar and other renewable energy sources, and that’s not a punch line for a joke in a Jay Leno monologue.

In fact, organizers say the Solar 2009 National Conference offers a chance for an expected 3,000 out-of-towners to see that this region is a hotbed of activity in renewable energy and green jobs.

“We need to be put on the map for a little bit more than snow,” said Edward E. Hogle, who is building student housing in Black Rock that will use solar energy and boilers running on grease and vegetable oil.

A number of businesses that offer green products and services have sprouted up here in recent years, and experts say this region can be a center for the nation’s emerging green economy.

Companies, schools and local governments also are working to become environmentally friendly, taking advantage of solar and wind power to operate more efficiently.

“People say, ‘Why Buffalo?’ It only makes sense for Buffalo, because of our strategic location,” said Marika Woods-Frankenstein, cultural and environmental development coordinator for the Elmwood Avenue Festival of the Arts.

The conference, in the Buffalo Niagara Convention Center, will show off local green projects, including wind turbines, solar panel arrays and Hogle’s green housing.

And if you think this a stretch for a place perceived as a frozen landscape 10 months of the year, think again. We have more sunny days annually than Rochester, Syracuse — and Orlando, Fla.

“Buffalo has been called the sun capital of the Northeast,” said Adam Rizzo, president of Solar Liberty, a Williamsville company that installs solar systems.

Interest in the Solar 2009 conference is sky-high, said Neal Lurie, American Solar Energy Society spokesman. With about 5,000 people expected, the Buffalo event will have the biggest crowd in the conference’s 38 years, he said, “which is impressive when you consider last year we were in San Diego.” More here.

Friday, May 8, 2009

Will Flint become a pioneer in how to purposely shrink a city?

The New York Times, April 21

Instead of waiting for houses to become abandoned and then pulling them down, local leaders in Flint, Mich., are talking about demolishing entire blocks and even whole neighborhoods. The population, stores and services would be condensed into a few viable areas and the rest would return to nature. Planned shrinkage became a workable concept in Michigan a few years ago, when the state changed its laws regarding properties foreclosed for delinquent taxes, allowing them to become the domain of county land banks. Other cities with shrinkage problems are setting up land banks as well. More here.

How Michigan attracts clean tech companies from Massachusetts

Boston Business Journal, April 17

With its strong manufacturing legacy, high-tech research capabilities, and incentives, Michigan has wooed three Massachusetts clean-tech firms to build large scale manufacturing facilities that will generate thousands of jobs. Part of Michigan’s strategy is to target specific companies and engage with them at a high level; still, it makes a few in Massachusetts wonder if the state should retool its strategy with more direct financial incentives. More here.