Monday, June 21, 2010

Think tank lists Des Moines, Iowa, as No. 2 city for performance during downturn

By John Schmid of the Journal Sentinel

As the nation's industrial heartland rises from recession, its cities might look to an unlikely metro region to emulate: Des Moines, Iowa.

According to The Brookings Institution, a Washington, D.C., think tank, Des Moines nearly tops a ranking of "overall performance during the recession" of the 21 biggest cities of the Great Lakes region, which stretches from Minneapolis and St. Louis, Mo., to Pittsburgh and Rochester, N.Y.

Iowa's capital edged past Madison, which has a larger population, while Des Moines also came out well ahead of both Chicago and Milwaukee under the index. Brookings used a composite measure of employment, unemployment, economic output and housing prices. It tracked each from the start of the recession through the first quarter of 2010.

Only one city fared better than Des Moines: Buffalo, N.Y. But even before the Brookings study, Iowa had caught the attention of Wisconsin's economic planners. Many ask why Iowa - seen by some as a sleepy agricultural state without major cities or professional football or baseball - outpaces the Midwest.

"Anybody that's been watching economic data sees that Iowa definitely outperforms other states in the region," said Todd Berry, president of the Wisconsin Taxpayers Alliance in Madison. "It's a fairly recent phenomenon."

Many took notice in 2008 when IBM Corp. announced plans to create 1,300 technology jobs in Dubuque, Iowa. At the time, a media commentator in the Research Park Triangle, a university and technology mecca in North Carolina, expressed astonishment that IBM chose "the land of farms, cattle and the Iowa caucuses."

"Iowa has won good marks for its economic strategy," said Tim Sheehy, a top official in the Milwaukee 7 economic development consortium and president of the Metropolitan Milwaukee Association of Commerce. "Some of the work that we did early on looked at Des Moines."

"We've been watching Iowa for the last three or four years," said Berry, who tracks competitive benchmarks for Wisconsin. In the 10 years from 1998 to 2008, Iowa's per-capita economic output outpaced the national average while Wisconsin lagged behind the national average, Berry said.

Among the reasons for Iowa's relative success: The state has two notable research universities - Iowa State University in Ames and the University of Iowa in Iowa City. Iowa invests disproportionately in its universities, and it relies less on heavy manufacturing than many neighbors, he said.

The 21 largest cities of the Great Lakes region - which have roots in the 19th century farm, factory and foundry economy - offer one of the most relevant comparisons for Wisconsin's urban centers.

Milwaukee, Minneapolis, Louisville, Ky., and Cincinnati cluster in the middle of the pack, Brookings found. "The extent of job losses during the Great Recession has been highly varied across the Great Lakes region," it said. And compared with the rest of the nation's metro centers, "the Great Recession has been more severe and its recovery weaker in the Great Lakes region than any of the previous three recessions and subsequent recoveries."

Faring worst on the list was Youngstown, Ohio, a former steelmaking town of about 500,000 people.

The ranking makes clear that cities with a concentration of automakers or auto-parts supplies "are among those with the largest employment declines in the nation." Detroit has suffered employment declines greater than 10% since its pre-recession employment peak, as have Dayton, Youngstown and Toledo in Ohio, it said.

One bright spot: The region as a whole avoided the worst of the housing-price inflation that led to the mortgage meltdown. Housing prices fell in the past three years in the Great Lakes region, Brookings said, "but by significantly less than in the 100 largest metropolitan areas."

Great Lakes rankings
The Brookings Institution measured employment, unemployment, economic output and housing prices in the 21 biggest cities in a region that includes Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Kentucky, Missouri, Wisconsin and the western parts of New York and Pennsylvania. Ranked from the top:

Buffalo, N.Y.

Des Moines, Iowa


Rochester, N.Y.

Columbus, Ohio



St. Louis, Mo.

Syracuse, N.Y.


Louisville, Ky.



Akron, Ohio



Dayton, Ohio

Grand Rapids, Mich.


Toledo, Ohio

Youngstown, Ohio

Source: Brookings Institution

How one Michigan city tries to lure Millennials and retain talent

T. J. Hamilton | The Grand Rapids Press

GRAND RAPIDS -- Bridget Clark Whitney and Leslie Perales represent the yin and yang of Michigan as a destination for talented, college-educated Millennials.

Whitney oozes Grand Rapids' youthful energy from every pore.

The 30-year-old is executive director of Kids' Food Basket, a fast-growing nonprofit agency that serves after-school meals to children in low-income families. She could be a poster child -- or maybe more accurately, a poster Millennial -- for the crusade to attract young professionals to West Michigan and stem the state's so-called "brain drain."

A dynamo on the job and off, the Pittsburgh native and 2003 Aquinas College graduate bubbles over when describing the qualities that should make Grand Rapids a hotbed for 21- to 35-year-olds.

"Everything you want, you've got here, short of IKEA or Whole Foods. The culture, the excitement, the nightlife, the sociability and the people all together create an incredible place to live," she raves. "There's an incredible generosity that exists. It's part of the culture. ... There's nowhere else in the world I'd rather be."

The Pennsylvania transplant even blogged online, "I'll say it: Grand Rapids. Best. City. Ever."

Perales, 24, is impressed by Grand Rapids' progress, but it doesn't guarantee a job and it's unlikely to bring her back here anytime soon.

Perales, a Zeeland High School graduate who earned a print journalism degree from Grand Valley State University in 2007, adores her new home in Reston, Va., just outside Washington D.C.

After her boyfriend, GVSU grad Steve Loges, couldn't find work in Michigan three years ago, he accepted a position with his brother's Internet marketing firm outside Washington. Perales joined him four months later. In just three weeks, she found work as a general assignment newspaper reporter and has since taken a better-paying job as content editor for Knowlera Media, which specializes in how-to videos.

Perales loves the culturally diverse Washington area and wonders if the Grand Rapids area can match that city's vibe and robust economy.

"At this point, I'm not sure if I want to come back at all," she concedes. "I love it here. It seems like a lot of young people in the area really enjoy living here. The opportunities that you find here, you just don't feel like you have to go searching for those more diverse opportunities. They're just everywhere here."

Economic hurdles

Stopping the brain drain of Millennials drawn to vibrant urban centers and making Michigan a magnet for creative minds is a hot topic, online and on the street. Groups such as the Great Lakes Urban Exchange (GLUE), seek to revitalize industrial cities in the region, in part, by targeting these young, "post-boomer urbanists" who experts consider linchpins in spurring growth, innovation and economic recovery. More here.

Monday, June 7, 2010

Economic development group's performance and budgeting being questioned

Melissa Domsic

LANSING -- Three years after its founding, the Lansing Economic Area Partnership Inc. regional economic development group seems to be at a crossroads.

LEAP has been involved in several efforts to boost business and the economy in general since its formation, from helping draw IBM to Michigan State University to compiling the Greater Lansing Next: A Plan for Regional Prosperity that outlines ways for the area to grow.

But some local officials are raising questions about the organization's overall performance and budgeting, including transparency. And some LEAP board members are taking another look at their financial commitments.

"Some of us believe the initial three-year (financial) commitment was to help the organization get off the ground," said Ted Staton, East Lansing city manager. "Now that it has a plan and is working on that plan, they need to move to the next phase of the organization's existence."

Nonprofit group LEAP was formed in 2007 to unite public and private organizations to boost the region's economic development.

Of the 36 organizations listed as board members, 15 said they intend to continue financially supporting LEAP. Eight said they were unsure of their plans for next year, including three companies that recently had management changes. Six municipalities will consider lowering their contributions. Four board members did not respond to requests for information.

Three board members exchange services instead of paying a fee, including the Lansing State Journal.

While the organization has support from many business and community leaders, it also has been catching flak for what some local officials describe as a lack of transparency and measurable results.

Delhi Township Trustee Derek Bajema recently questioned whether the township's $35,000 annual investment in LEAP was paying off.

"I understand that the economy has been down, it's tough to attract business in this kind of environment," he said. "At the very least, I think just more transparency needs to be there."

Bajema requested a copy of LEAP's budget and received a seven-line budget that didn't break down components, such as the $750,843 in personnel costs.

"At the heart of it all really is: These are taxpayer dollars, and if nothing else, let's see how you're spending taxpayer dollars," Bajema said.

LEAP is funded by contributions from more than 60 businesses, local governments and other community organizations. About half of the members serve on the board of directors.

The organization provides the same seven-line budget to its board members.

Board member and Delta Township Supervisor Ken Fletcher said he thinks LEAP needs to better account for the money it spends.

"I think LEAP does do great work in the community and they should be willing to go out there and show the funders exactly how they're using that money and how they're accomplishing their goals," he said.

This year's $1.2 million budget provided to the Lansing State Journal by LEAP included a $750,843 personnel budget for eight employees.

President and CEO Denyse Ferguson would not disclose details beyond the seven-line budget.

However, LEAP files financial reports with the Internal Revenue Service. A report filed in September 2009 shows former President and CEO Matthew Dugener was paid a $144,845 salary plus benefits in 2008. Ferguson made $120,791 plus benefits. She served as executive vice president until October 2008, when Dugener resigned and Ferguson took over as interim president and CEO. Justin Himebaugh, former chief operating and financial officer, made $104,710 plus benefits.

Ferguson has noticed people have focused on the amount spent on wages and benefits and are asking why the business development budget isn't larger. But, she said, service organizations such as LEAP hire professionals to carry out business development activities and pay them accordingly.

The business development budget accounts for incidental costs that arise as the employees carry out their jobs, Ferguson said.

For more on this story, read Friday's Lansing State Journal.

New York considers five Great Lake offshore wind proposals

The state of New York has begun a multi-phase review process for five proposals seeking to build offshore wind turbines in the Great Lakes.

The New York Power Authority is expecting to spend six to seven months looking into the projects proposed for state waters of Lake Erie and Lake Ontario before picking a preferred developer or developers.

The proposals came forward under the Authority’s Great Lakes Offshore Wind (GLOW) initiative, launched last December.

The exact size and location for the wind project has not been decided, but the Authority’s original request for proposals sought projects of between 120 megawatts and 500MW in capacity.

Under the current timeline, a preferred developer or developers will be selected in late 2010 or early 2011, before a two-year permitting process is carried out.

Construction for the successful wind projects is slated for a 2013 start, with hopes that offshore wind farms could be commercially operational by 2015 or 2016.

Richard M. Kessel, president and chief executive officer, NYPA, said on Friday: “There is much work to be done before any project can be built and once NYPA’s initial review phase is complete, there will be significant opportunities for community participation in the next phases of the evaluation process.”

The Authority said the five proposals now being reviewed represented a “strong showing”, comparing it to the three projects that came forward for Delaware’s offshore wind attempt and five for New Jersey.

The successful project or projects will enter into a power purchase agreement to sell generated power to the NYPA.

Meanwhile the Authority has been encouraging businesses in the state to come forward if they might be in position to provide goods or services to a developing offshore wind industry in New York.

Companies can register on the GLOW initiative website, where 220 businesses have already listed their availability.

A number of “Get Listed!” events are being organized to help businesses find out more, with one scheduled for June 24 at Syracuse University, and another for July 27 in Dunkirk.

Bill Daily, administrative director and chief executive officer at the Chautauqua County Industrial Development Agency, said: “Harnessing this resource to generate electricity will lead to economic development by the creation of jobs. Many jobs during construction phases, but more importantly high-paying permanent jobs located in our communities along Lake Erie.”

While local politicians and citizens groups are supporting the development of offshore wind in New York State waters, opposition to the installation of wind turbines is also materializing.

Legislatures in Owego, Jefferson, and Wayne Counties have all passed resolutions opposing “the New York Power Authority’s proposals to provide incentives for the siting of wind towers (Great Lakes Offshore Wind project) in Lake Ontario’s eastern basin”.

Thursday, June 3, 2010

Great Lakes are Dead, Long Live the Great Lakes

John C. Austin, Nonresident Senior Fellow, Metropolitan Policy Program
June 01, 2010

The portion of the blogosphere inclined to noodle over Brookings State of Metro America report, included some who now ask, “whither the Rust Belt?” and “whither the Brookings Great Lakes Economic Initiative?”.

I’m pleased to say all are alive and in forward-looking form. The Great Lakes Economic Initiative developed several years ago, not out of a DC-based “mega-region” overlay, but as I traded notes from my years as an elected official and public policy-shaper in Michigan and teamed up with similarly situated political, business and civic leaders from Cleveland, Pittsburgh, Milwaukee, and elsewhere around the region. We basically said, “Don’t we have a similar economic and cultural story? Aren’t we trying to treat the same problems; and leverage the same assets? Isn’t there more we can do working together to accelerate our economic transition?”

At the same time Dick Longworth, a Pulitzer prize-winning former journalist, documented the shared Midwestern and cultural reality in his book Caught in the Middle: America's Heartland in the Age of Globalism.

The basic story line of the Great Lakes states was of a region uniquely rich in raw materials and fertile land that became the breadbasket of the growing country, then the world’s manufacturing innovation and creation center.

As the grains of the plains came to Minneapolis-St. Paul, it became the flour-milling and export capital of the world, home to Pillsbury and General Mills. As pigs were slaughtered in Cincinnati, making soap as a byproduct, the consumer products giant Proctor and Gamble grew. As buggy makers in Flint and Detroit were converted by Henry Ford and Billy Durant into Ford and GM, so too metal-benders for farm equipment in Grand Rapids starting making chairs for Steelcase and Herman Miller, electronics innovators in Dayton led to EDS and AC-Delco, iron ore from Duluth-fed US Steel in Gary, Cleveland and Buffalo. More here.

Great Lakes Share of Selected National Totals

A Blueprint for ‘Regional Transformation’

A proposal for a region-wide venture capital fund may be the key to future prosperity for the Great Lakes states, but how badly do they want it?


Frank Samuel, Jr., author of “Turning Up the Heat: How Venture Capital Can Fuel Regional Transformation,” a Brookings Institution report If one could simply light a spark under the economic potential resident in the Great Lakes region, and transform those states into red-hot centers of enterprise, then why hasn’t it happened yet? Two reasons: Every spark needs an energy source, and the region has to want the spark in the first place.

Long-term economic prosperity will elude regions and nations if businesses cannot grow and flourish and create jobs – if entrepreneurship is not rewarded and encouraged to take root and bear fruit. In the Great Lakes, this means keeping area companies with promising ideas and technologies from growing their businesses somewhere else.

A paper released in late January by The Brookings Institution explains how to do just that. “Turning Up the Heat: How Venture Capital Can Fuel Regional Transformation” was authored by Frank Samuel, Jr., a consultant and former science advisor to Ohio Gov. Bob Taft and architect of some of that state’s most successful venture capital initiatives, including the Third Frontier program. The paper was also the topic of a March 2010 Global Midwest Policy Brief, “A Venture Capital Strategy for the Great Lakes,” from the Chicago Council on Global Affairs.

Samuel advocates the formation of a Great Lakes 21st Century Fund, a fund of funds managed by the private sector – that’s a key point – and capitalized with US$1 billion to $2 billion targeting early-stage ventures with the goal of keeping them from moving and expanding elsewhere. His premise is threefold:

The Great Lakes region has the ingredients in place for economic growth, including major research assets, a rich supply of human capital and a mature industrial base.

Venture capital investing in the region is hindered by too few “investable” deals emerging from area research institutions, the high cost of early-stage investing due to geographic and other reasons and a lack in capacity to fund initiatives further into their life cycle, prompting them to seek locations outside the region that can provide post-early-stage financing.

A coordinated effort in the part of multiple stakeholders is needed “to create and sustain a virtuous cycle of venture investment, entrepreneurship and firm growth in the region.”

In early April, Site Selection Editor in Chief Mark Arend spoke with Frank Samuel about his case for a Great Lakes regional venture capital fund, which was first recommended in a 2006 Brookings Institution report called “The Vital Center.” More here.