Wednesday, October 29, 2014

Why you should care about California's ban on commissions for site-selection consultants


Sacramento Business Journal
Is the Brown administration hurting California by banning commissions for consultants who help companies win tax credits? Some consultants themselves disagree on that question.

In August, the Governor's Office of Business and Economic Development
prohibited site-selection consultants from taking a percentage of the California Competes tax credit, a tax break given to businesses planning on locating or expanding in the state.

Some consultants say the move will hurt the state.

"It will make California less competitive, because companies that cannot afford to pay consultants are going to look to states where consultants can operate under those needs," said Tom Stringer, a site selection consultant for Ryan LLC, a Dallas-based firm.

Ryan sued GO-Biz shortly after the agency implemented the tax credit ban, alleging the prohibition violates the state of California constitution.

Some industry practitioners praise the governor for attempting to reverse a rising pay-to-play trend that creates a conflict of interest for consultants. Critics of the practice argue it creates an incentive for consultants to recommend that companies move to regions where they cannot thrive.

"Good for California," said Bruce Maus, owner of the Maus Group, a Minneapolis-based consultancy firm. Site-selection consultants have increasingly relied on tax-credit commissions when helping companies plan for relocation. That compensation structure motivates consultants to get the best deal for their own firm and not the client, he said. More here.

Tuesday, October 21, 2014

As Royals win, so does their hometown


Web Producer- Kansas City Business Journal
The Kansas City Royals' tenacious, underdog spirit has captivated the nation, and on Wednesday #TakeTheCrown was an official trend on Twitter. Although the Royals and their fans are riding high on the team's first World Series appearance in 29 years, Kansas City is claiming a victory of its own: free marketing.

“Every game is like a three-hour commercial for our community,” said Jeff Pinkerton, senior researcher at the Mid-America Regional Council.

As the camera pans across the roaring Royals fans or a shot of the downtown skyline flashes across the TV after a commercial break, it gives viewers a sense of the region.

“They may be intrigued to visit or invest down the road,” he said. “It’s certainly a positive.” More here.

Friday, September 12, 2014

Global Carmakers Want India to Reform to Attract Industry

From Industry Week

NEW DELHI -- India must urgently improve its infrastructure and reform its tax, land acquisition and labor laws if it is to fulfil its ambition of becoming a leading international automotive manufacturing hub, global carmakers said on Friday.

New prime minister Narendra Modi invited investors last month to "Come, make in India" as part of a drive to create manufacturing jobs for a ballooning young population.

But automobile executives warned at the annual meeting of the country's biggest vehicle industry group that India must create a better business climate swiftly or risk losing out to emerging market rivals like China.

"India has an opportunity to build a globally competitive (automotive) industry," but to realize its full potential, the sector needs "a clear roadmap", GM International president Stefan Jacoby said.

The country needs to streamline taxes that vary state-to-state, ease rigid hire-and-fire laws and set internationally harmonized fuel-emission, safety and other norms, speakers told the Society of Indian Automobile Manufacturers (SIAM). More here.

Thursday, September 11, 2014

Dan Gilbert pitches Detroit to Silicon Valley

By Dustin Block | dblock@mlive.com

DETROIT, MI - Dan Gilbert is taking his pitch for Detroit has a tech startup city to Silicon Valley.

The billionaire owner of Quicken Loans and dozens of buildings in downtown Detroit made the case for the Motor City at TechCrunch Disrupt in San Francisco this week.

"Detroit right now is Detroit 1914, almost," Gilbert said. "It's an extremely exciting place There is all kinds of action downtown with hundreds of technology companies and now venture capital has come in."

"It's hard to imagine if you haven't been here," Gilbert added. "I always tell people I'd rather not talk about it because whatever I say doesn't do it justice because the perception is so different from what you see on the ground there."

Gilbert tailored his pitch to the San Francisco crowd noting Detroit offers a "gold rush" of talent from the University of Michigan, Michigan State and Wayne State, affordable office space, and a Midwestern work ethic that seems cliche, but is true.

Wednesday, September 10, 2014

4 reasons Tesla’s Gigafactory went to Nevada instead of California


Economic Development Reporter- Silicon Valley Business Journal
The interstate horse race for Tesla Motors Inc.’s $5 billion cleantech battery Gigafactory has come to a close with news of a deal involving a record $1.25 billion incentive deal in Nevada, dashing the hopes of business advocates in the electric car company's home state of California.

The choice of low-tax, uber-business-friendly Nevada isn't exactly surprising given cost considerations.

However, the competition for the Tesla manufacturing project expected to generate 6,500 jobs is symptomatic of much deeper economic rivalries between California and its competitors.

Nevada has been angling to poach business from California for years, from public-private organizations convened to hype the state’s zero income tax to incentive programs encouraging tech startups to set up shop in Las Vegas. And then there's the usual mockery of the Golden State's development red tape.More here.

Tuesday, September 09, 2014

Michigan economic development group used 'secret shopper' and fake company to evaluate Michigan

By Stephen Kloosterman

MUSKEGON, MI – The Michigan Economic Development Corporation used a professional site selector and a fake business for a "secret shopper" survey of Michigan cities this summer.

"In an effort to continuously improve service to our business clients, we engaged in a secret siting activity to objectively look at how well we navigate and respond to inquiries from clients looking to locate in Michigan," MEDC CEO Michael Finney said in a written statement Thursday, Aug. 28.

The secret shopper operation started with a formal request for information from local communities, Finney said. All of the communities involved provided responses to the request in early July. Later, there were mock site visits at Muskegon, Grand Rapids and Kalamazoo locations, he said. More here.

California vs. Texas in fight to attract and retain businesses



When California rolled out a $750-million plan this year to attract and retain businesses, many aspects mirrored longtime perks used by Texas — where officials love nothing more than stealing jobs from the Golden State.

For more than a decade, Texas Gov. Rick Perry has touted the "deal-closing" Texas Enterprise Fund and other cash incentives as a "job-creation machine." A fifth of the companies that Texas attracted during the last funding cycle, in 2011 and 2012, were based in California.

Now California is firing back. In the state's first tax credit awards in June, more than 40% of the $29-million package went to companies that have gotten similar offers from Texas: Samsung, Petco and Amazon.
But as California embarks on a major effort to woo businesses, a decade's worth of experience in Texas raises questions about the wisdom of buying jobs from corporations with taxpayer dollars. More here.

What Cities Can Teach Marketers About Marketing

This article is by Andy Levine, president and chief creative officer at Development Counsellors International.

If you are like most consumer marketing professionals, you probably vie with three to six direct competitors on a regular basis.

But what if you had more than 30,000 competitors? That’s the number of cities and towns in the U.S. alone that are competing every day to win new corporate investment, attract both group and leisure travelers, and draw new residents to their community. Yes, it’s a tough battle.

While it may seem counterintuitive, I decided to ask the following question: What can consumer marketers learn from the people who successfully market their communities?  Put another way, what can “smart cities” and the men and women who promote them teach the private sector about marketing? As I pondered the question, six key learnings emerged: More here.

N.C. legislators vote against $20M economic development 'closing fund

Staff Triad Business Journal

Legislation that would have created a fund for the N.C. Department of Commerce to dole out $20 million in up-front cash incentives was voted down by the legislature Tuesday, according to several media outlets.

The measure, which bundled together with other provisions, including a controversial sales tax-capping regulation, failed Tuesday by a vote of 47 to 54.

The incentives would have been used to lure jobs or keep existing ones from being cut.

While proponents of the measure said it could help seal the deal for some economic development projects currently in the pipeline, critics said it was not clear how such incentives would ultimately be used.

The bill would have also expanded two other incentive programs. More here.

Megasite ‘coopetition’ rare in economic development


PANAMA CITY — In the competitive world of economic development, cooperation between states is rare.

But “coopetition” is the driving force behind the Tri-State Megasite Alliance, a 10-county effort in North
Florida and South Alabama to lure a major economic development project to Campbellton, a small town in northern Jackson County.

“For the other counties to say ‘we support this site in one county’ is really a show of what we call coopetition,” said Neal Wade, Bay County Economic Development Alliance director and project co-chair.

“It allows both states to go after an automotive project for less than if you went after it by yourself.”
Now two years into the project, the alliance has identified a 2,200-acre site near U.S. 231 in Campbellton with the right ingredients to house an auto manufacturing plant, the targeted industry for the space. More here.