Sunday, July 31, 2011

Experts divided on Michigan's economic development strategy of reducing tax breaks


The jury is still out on whether Michigan's new economic development strategy will work. But one thing's for certain. The state is making a 180-degree shift from its previous strategy of using billions of dollars in tax breaks and other incentives to jumpstart growth in five key industries.

Under Gov. Rick Snyder, Michigan economic development officials are betting that spending fewer dollars more wisely, helping existing businesses grow and giving many companies a big tax cut will enable the state's economy to flourish.

"It's not necessary to offer ever-increasing incentives in order to be competitive as a state," said Michael Finney, CEO and president of the Michigan Economic Development Corp.

The state is already reducing its reliance on tax breaks. So far this year, Michigan has awarded $62.5 million in MEGA tax credits, which are given to companies that create or retain jobs over a multi-year period. That's just a sliver of the $2.7 billion in MEGA tax credits that were approved last year. Starting in January, these tax breaks will no longer be given out.

Instead, Michigan plans to attract businesses with loans, grants and equity investments. The state has set aside $100 million to do this, but some of this money must also be used to help offset the cost of preserving historic buildings and redeveloping contaminated properties.

Experts who specialize in helping companies find the best locations for new factories or headquarters are divided about whether getting rid of MEGA tax credits is a smart move.

"It's a step in the right direction for Michigan," said Lee Higgins, senior vice president and incentives practice leader for Dallas-based Site Selection Group. "They are being very proactive in doing this, and I applaud them."

But Robert Price, a director at Atlanta-based Herron Consulting who has worked on more than 250 site-selection projects, said "eliminating corporate tax credits does not put Michigan in a good competitive position."

State's new approach draws praise, criticism
Under Gov. Rick Snyder, Michigan is drastically overhauling the way it attracts, retains and grows businesses in the state, embarking on a new path that's drawing praise and criticism.

Gone are the days when the state eagerly doled out billions of dollars in tax breaks to lure new companies. No longer are business development teams in Lansing targeting a few promising industries like alternative energy and homeland security and defense.

Instead, the state is taking a different approach to spurring economic growth. Starting in January, it's eliminating $1.8 billion in taxes for many businesses. To help offset this lost revenue, tax breaks for companies that create and retain jobs will disappear next year. And the state has stopped rolling out initiatives to help certain industries while ignoring others.

A key part of the plan involves helping the state's existing businesses grow, a concept called "economic gardening." Many employees at the Michigan Economic Development Corp., the state's economic development agency, are trying to assist companies with their need for more capital, customers and talented employees.

"We see enormous potential to help existing businesses grow," said Michael Finney, the MEDC's CEO and president.

To be sure, Finney and other economic development officials are not ignoring opportunities to attract new businesses. In the new fiscal year that starts Oct. 1, the state plans to spend $100 million on incentives for business relocations and expansions, the preservation of historic buildings and the redevelopment of contaminated or brownfield properties.

How the $100 million will be divided among these projects will depend on the requests received, Finney said. Companies interested in setting up facilities in Michigan could get grants, loans or equity investments from the state. But it's unclear how the process would work because the MEDC is still working on the details.

"The market should dictate how we spend it," Finney said of the $100 million. "At the end of the day, jobs are the highest priority."

Experts in site selection and economic development incentives differ on whether Michigan's new approach will be successful. Some lauded the move away from tax credits and toward grants. Many companies cannot take advantage of tax credits because they have no tax liabilities so grants are more effective for them, said Jason Hickey, president of Hickey & Associates, a Minneapolis-based site-selection firm. "It's smart for Michigan to go away from tax credits," he added.

But several other experts said that $100 million may not be enough money to keep the state competitive, especially in cases where companies are looking to make capital-intensive investments. Last year alone, businesses in Michigan claimed $214 million in tax credits for expansion, relocation and brownfield projects.

Lee Higgins, senior vice president and incentives practice leader at Dallas-based Site Selection Group, said the $100 million should be devoted solely to business attraction and retention deals, with money for brownfield projects coming from elsewhere. Texas allocates $200 million in grants over two years for this purpose, he noted.

Robert Price, a director at Atlanta-based Herron Consulting, a location consulting firm, said $100 million is a "very low cap." "I don't see where that would provide Michigan with an advantage versus its competitors," he said.

So far, Michigan has not yet encountered a situation where it needs to pony up a hefty incentive in order to win a new factory or corporate headquarters. The state's last major economic development win occurred in June 2009 when General Electric announced it planned to open an advanced manufacturing and software technology center in Van Buren Township that would employ 1,200 workers. GE received a $74-million, 12-year tax credit from the state.

Big deals like this are rare. Finney said if the state ran into a situation where the $100 million was not large enough to attract a big corporate investment, then MEDC officials would ask the state Legislature for more money.

Whether this contingency plan will work remains to be seen. Richard Barr, co-chair of the investment incentives and tax savings practice group at the Detroit-based law firm Honigman Miller Schwartz and Cohn, said many companies do not want to publicize their site-selection process for fear of disrupting their employees unnecessarily.

"It's a nice commitment to consider, but it will be unusual for these circumstances to present themselves," Barr said.

Hickey said this kind of legislative process would be tough for businesses to do because nowadays expansions and relocations are getting done quickly as companies rush to snap up office and industrial space at bargain rates. "Companies realistically may not have enough time," he said.

Meanwhile, the competition for new business investments remains fierce. Ohio awarded $286 million in job-creation and retention tax credits in its 2011 fiscal year that ended June 30, a 66% increase from fiscal 2010 levels. It also restructured its tax system to be more pro-business.

Bethany McCorkle, a spokeswoman for the Ohio Department of Development, said Ohio has not yet seen an increase in business investments because of the changes in Michigan. "However, time will tell and we may see the impact as companies realize its true impact," she said.

Finney acknowledged that Michigan's new approach -- which has not been tried before by other states -- has drawn mixed reactions from people outside the state.

"It's been both skepticism and encouragement," he said of the calls that have poured into his office. "We feel pretty confident this is the right thing to do."

Saturday, July 30, 2011

Richmond taps Denver for ad effort

By: Louis Llovio

A little more than a month after Mayor Dwight C. Jones pledged to support the city's creative community, his administration has decided to award a contract to create a branding campaign for Richmond's economic development office to an advertising agency in Denver.

"As a small-business owner who pays taxes in the city, this stinks," said David Saunders, president of Richmond ad agency Madison + Main and a finalist for the contract. "That the organization in charge of promoting a city that has some of the best agencies in the country goes 2,000 miles away is just wrong."

Saunders, who bid on the contract and insists his anger is not based on losing the bid, said the contract is worth about $100,000.

He said he believes the work should have stayed in the Richmond community, which has gained international recognition in the advertising field with one of the top advertising agencies in the country, The Martin Agency, and one of the top graduate advertising schools in the country, the VCU Brandcenter.

The city's request for bids on the project, issued March 11, asked for ad agencies to bid on a contract for brand development, website design and creative services for the city's Department of Economic and Community Development.

The city posted a notice on its website Thursday that it intended to award the contract to Atlas Advertising in Denver.

Tammy D. Hawley, the mayor's press secretary, said Friday that the city is not permitted to discuss specifics on a bid that has not been finalized. But without mentioning Atlas by name, Hawley defended the decision.

"There are firms that have particular experience attracting" large corporations and investments to cities, she said.

In a follow-up email Friday afternoon, she added: "This is an effort to increase the city's appeal with site selectors, industries, prospectors and businesses looking to expand or relocate, and the work involves only the Department of Economic and Community Development."

Saunders said the contract being awarded to an out-of-state firm is particularly galling given that the mayor has publicly supported local efforts highlighting Richmond's creative community as an economic development tool.

Last month, Jones participated in an event that worked on finding ways to market Richmond as the "capital of creativity."

"We need to embrace the creative energy, and the city needs to create a platform for the energy to be released," Jones said at the June 23 event.

The event was the launch of i.e.*, a collaboration of businesses and creative leaders that aims to "transform this city from a Civil War attraction into a nationally renowned hotbed of creative talent." About 200 people from a variety of backgrounds attended the event.

Jones also has been a strong proponent of RVA Creates, an organization formed to help boost the area's creative reputation and businesses.

Until the contract is finalized, the city cannot release any details about other agencies that bid on the contract.

Hawley added that the economic development department "conducted a broad local outreach and invited local area firms to participate in this procurement. And some of them did compete."

Saunders said his firm has worked for Richmond's Department of Economic and Community Development in the past and also helped develop a branding campaign for Chesterfield County. And before launching Madison + Main, Saunders worked on a campaign to rebrand several localities in California's Los Angeles County.

Atlas specializes in providing creative services for economic development, real estate and tourism marketers.

According to the Atlas website, the agency has done work for more than 90 communities in 35 states in and six countries.

Hawley added that a portion of the contract requires that local subcontractors be used for some of the work. She could not be more specific.

Asked about where Jones stood on the decision to award the contract to a company outside the Richmond area, Hawley said "you can't target" a specific area in the contracting process.

The decision to award the contract, she said, was made by a panel, not the mayor.

Saunders, though, said Jones is ultimately responsible for his administration's decision.

Jones is "not practicing what he preaches," he said. "When he talked about the capital of creativity, I thought he meant Virginia, not Colorado."

“Cluster Strategy” attracts local industries to Hudson Valley region

Mid-Hudson News Network

POUGHKEEPSIE – The governor’s just-announced Mid-Hudson Regional Economic Development Council will be able to take advantage of the groundwork laid by the Hudson Valley Economic Development Corporation, its president said Thursday.

A new multi-pronged approach to local business growth is being employed by regional economic development organizations in New York.
HVEDC President Michael Oates brief the Dutchess County Economic Development Corporation on “cluster strategy” at the county agency’s quarterly meeting at Dutchess Community College in the Town of Poughkeepsie.

“One of the key ways of attracting business into a region is to foster and develop the clusters that already exist,” Oates said. “The main cluster that we’re working on is for the biotech – or life science – cluster.”

Nearly 40 percent of the all of the biotech companies in New York are located within the Hudson Valley region, Oates indicated. “We’ve branded the region, the Hudson Valley, as the epicenter for the biotech industry for the state of NY, and we’re calling it ‘NY BioHud Valley.’”
Cluster strategy involves establishing roundtable discussions between leaders in related commercial fields, together with local officials and private development groups, to better learn what industry requires from government to locate and/or expand regionally. “As an organization, we work with our partners throughout the region, to help market, coordinate activities, and try to attract investment and jobs into those sectors throughout the Hudson Valley,” Oates said.

And the strategy targets much more than biotech clusters. “One of the many beautiful things about the Hudson Valley is that we have a wide variety of growing business sectors, everything from financial services; green tech solar renewable energy; a food and beverage cluster; a flourishing film production; and tourism cluster,” he said.

Recent initiatives from Albany will help kick-start more cluster growth in New York. “We’re working with the economic development councils that Governor Cuomo has announced this week, and we are partnering with them on development of a strategic plan for the Hudson Valley,” Oates said. “We think we’re well positioned to take advantage of the resources that the Governor is putting on the table for economic development.”

Oates added that state representatives sent to similar national meetings will be expanded, to attract investment from beyond New York State. “We’re just going to continue to be aggressive in marketing the region, working with companies to help them come here, expand if they’re already here, and continue to grow.”

Friday, July 29, 2011

KC lands two more Johnson County firms as economic development border war continues

The Kansas City Star

Kansas City’s gain was Johnson County’s loss in a string of business announcements Friday that reinforced the area’s increasingly fierce economic development border war.

Three companies will be moving to Kansas City, the largest of which is the mortgage lending operation of North American Savings Bank, members of the Kansas City Economic Development Corp. board were told.

North American will be moving 204 jobs from its current quarters in Overland Park to 903 E. 104th St. in Kansas City, and the firm plans to add 58 additional jobs over the next five years.

“We’re excited to be moving back to Kansas City; we’ve been in Johnson County the last six years,” said Bruce Thielen, senior vice president of North American Savings.

North American will get $5.8 million in incentives from Missouri and $111,000 from Kansas City. Its total investment is estimated at $6 million.

Mayor Sly James attended the regular EDC board meeting and said the announcements indicated a new attitude at City Hall about business development and retention.

“The last few weeks have been eventful,” he said, referring to a management shake-up at the EDC, “but I believe they represent a significant change in course in making the EDC a lean, mean, job-making machine.”

James also said he had met with Kansas Gov. Sam Brownback to discuss ending the incentive-driven struggle that has been moving companies a few miles across the state line.

“It’s safe to say we didn’t meet eye to eye,” he said. “We’ve had wins and we intend to compete in a targeted way to meet the job needs of our city.”

North American Savings’ shift to Kansas City from Johnson County was announced at the regular EDC board meeting.

In another move that was announced Friday, Marks Nelson Vohland Campbell Radetic LLC, an accounting firm at 7701 College Blvd., is shifting its 82-employee operation to 1310 E. 104th St. in Kansas City and plans to hire 18 additional people by 2013.

“After an exhaustive search on both sides of the state line, we were able to target space that we could design to suit our needs for future growth,” said Mark Radetic, a managing partner.

Marks Nelson will get $954,000 in tax incentives from Missouri and a 50 percent property tax abatement over 10 years from the city. The firm is investing $2.7 million.

The third company mentioned Friday, Applebee’s International and an affiliated firm, had already announced its move in late May. The move from Lenexa to 8140 Ward Parkway shifts 380 jobs. Applebee’s will be getting an incentive package valued at $12.6 million.

Other new projects announced Friday:

•Star Financial, a financial service firm now at 7431 Broadway, is expanding into new quarters at one of the former Cleveland Chiropractic buildings at 601 E. 63rd St. The firm plans to hire more than 100 people over the next five years. It will receive $230,000 in tax credits from Missouri.

•Milbank Manufacturing plans to expand into the wind turbine manufacturing market and create 57 jobs over the next five years. The new investment is $2.75 million, and it will receive $200,000 in assistance from Missouri. The firm currently has operations at 4801 Deramus and 5601 Gardner and is a leading manufacturer of electrical meter sockets.

•Superior Metal Treating, 2540 Indiana, plans to add 14 employees within five years and is building a 15,800-square-foot addition. It currently has 35 workers.

•Several other previously publicized business deals also were discussed: the Trader Joe’s opening; an expansion of Vianney Industries, doing business as Midland Metal, a family-owned plumbing fitting business; and the expansion of Portland-based Blount International into a distribution center being built at Kansas City International Airport.

To reach Kevin Collison, call 816-234-4289 or send email to

Wednesday, July 27, 2011

EDC speaker focuses on jobs creation

By David Benda
The Record Searchlight

For much of his 30 minute presentation Wednesday, Jack Stewart of the California Manufacturers and Technology Association used numbers and anecdotes to cover familiar territory:

California doesn't get it when it comes to economic development; the capital's hostile attitude toward business and onerous regulations continue to be job killers.

But Stewart, a lobbyist who immerses himself in the politics of job creation, said pro-business leaders might have a surprising new ally in Sacramento.

Lt. Gov. Gavin Newsom, with whom Stewart didn't think he had anything in common before the Democrat took office, is shaping an economic development plan to grow jobs.

Stewart told business and community leaders at the annual Economic Development Corp. of Shasta County investors breakfast that it's the first time in some dozen years that an elected politician is taking job recruitment seriously.

Newsom is scheduled to unveil his economic development plan Friday.

"He is very focused on creating an economic strategy in California," said Stewart, who has headed up the CMTA since 1998.

In April, Stewart traveled with Newsom and others to Texas to learn about the success of the Lone Star State's job recruitment program.

Texas Gov. Rick Perry has become a folk hero for people like Stewart as he's marketed his state as a low-cost and business-friendly alternative to California, which is fertile job-hunting ground for Perry.

Texas has added 929,000 jobs since 2001, while California has lost approximately 635,000 manufacturing jobs in that same time, Stewart said.

Answering questions after his speech, Stewart told the story of Perry sending programmed cellphones to CEOs in California with a simple message: "If you're interested in growing your business, please call me. I'm here to help."

"They're doing something right down there," Stewart said of what he dubs the "Texas miracle." "Gov. Perry will go anywhere, any time, to try to recruit companies into Texas."

Perry has taken the state's regulatory process and managed it himself, Stewart said.

Stewart acknowledged that many of Texas' new jobs are low-paying minimum-wage positions.

"The fact is people have jobs," Stewart said in an interview after his presentation. "Wouldn't you rather have somebody working with a job?"

Wednesday's event was sponsored by the Record Searchlight, which is an EDC investor.

EDC President Mark Lascelles followed Stewart with an update on his organization's job recruitment efforts. Lascelles' organization also unveiled its new website at, which features a link that details the local, state and federal incentives available to employers.

When he started in September, the EDC was talking with two companies about relocating to Shasta County. Today, Lascelles said, the organization is in discussions with 18 firms.

In addition to meeting with Newsom, Lascelles has met with Stanford Research Institute President Kurt Carlson and plans to meet with UC Davis officials next month to look at research and business opportunities.

Lascelles emphasized that it does no good to belabor California's regulatory environment.

"Unfortunately, we can't avoid it. We have to deal with it," he said.

Tuesday, July 26, 2011

Meet the site consultants

By Philip Newswanger
Inside Business – The Hampton Roads Business Journal

There are two key players in the economic development field.

There's the quasi-public or public official who remains in the public eye.

And then there's the site consultant, a shadowy player who shuns publicity, yet who is a powerful influence on where a company will relocate its business and how much incentive money it will receive.

Site consultants can't be ignored by the economic development community.

Darryl Gosnell, president and CEO of the region's marketer, the Hampton Roads Economic Development Alliance, said he and his staff spend 30 to 40 percent of their time with site consultants.

"We have marketing missions throughout the year and one of the focuses of the marketing mission is the site consultant," Gosnell said.

The alliance will spend a week with site consultants, most of whom are situated in New York, Los Angeles, Chicago and Dallas.

Gosnell said the use of site consultants began in the 1980s when many Japanese and European firms, unfamiliar with local customs and laws, hired stateside companies as their liaison with local governments.

"Many companies got out of the selection process in the 1980s," Gosnell said.

Instead, they hired outside firms to handle their real estate operations and selection process.

In a paper titled "The Business of Business Relocation," John Lombard, director of the E.V. Williams Center for Real Estate and Economic Development at Old Dominion University, calls site consultants "relocation consultants."

The explosion of site consultants is due to the outsourcing of corporate real estate departments to third parties, in many cases real estate providers, and the flow of information via the Internet, Lombard said, citing Jack Tomasik of the Economic Strategies Group, who has been tracking the industry since 1997.

More so, there has been an explosion of incentives, which corporations considering relocation have come to expect, Lombard said.

In essence, relocation has become in many respects a money game, and this has attracted a lot of consulting specialists, Lombard said.

Incentives range from grants and training subsidies to free land and tax credits.

Real estate consulting and site selection account for the largest share of industry specialization in business relocation, Lombard said.

The private sector environment is driven by the profit motive and the work is toward billable hours, Lombard said.

The search for an optimal solution to a particular consulting problem is a rare occurrence, Lombard said. Rather, much of relocation consulting is produced to satisfy the client for a given situation.

But here is where public policy and the private sector diverge.

Unlike economic development practitioners, who typically operate with transparency, the private sector relocation consultant is geared toward confidentiality.

On one side is the site consultant, who represents the client, a company.

On the other side are the economic developer and state and local governments as stewards of tax dollars.

"I give them their due for delivering value but I have ethical issues with them when they also work for the public sector and/or on commission," said Greg LeRoy, founder of GoodJobsFirst, an advocacy group, and author of the "Great American Jobs Scam," in an email.

"Because site consultants remain wholly unregistered and unregulated, and very adverse to publicity, we cannot offer any kinds of statistics about their compensation practices," LeRoy said.

How site consultants are compensated is controversial, although examples are hard to come by.

Many in the economic development community say they believe site consultants are paid fees based on the size of the incentives they negotiate.

LeRoy said only a few consultants work on commission or on a mix of fee and commission, and commissions normally only apply to discretionary subsidies, such as a land grant or a training subsidy, based on his research.

LeRoy said in his book that cities are living a "prisoner's dilemma" game, whereby cities are played against each for the best deal.

Given how the system is rigged, LeRoy said, all the power rests with the site location consultants and their corporate clients.

No wonder there have been recurring grumbles that consultants sometimes exaggerate the subsidy bids from one place to coax higher sums from another, LeRoy said.

LeRoy said he has heard rumors of consultants seeking consulting fees from local governments of cities where they are steering their corporate client - a sort of double-dip/two sides of the same deal issue.

"I assume this would mainly happen at the low end of the market," LeRoy said.

"We assume commissions and other problematic practices are less common among Fortune 500 companies and their site consultants."

EDGE Keeps Memphis ‘In the Ball Game’

By Andy Meek

For the longest time, elected leaders and local economic development officials have lamented a missing ingredient surrounding what Memphis and Shelby County can do to prime the pump for business investment in the area.

Summed up in one word, that missing piece is an edge.

Those same officials have been racing for months to fashion something that affords the Memphis area a leg up on the mountain of tax breaks, help with infrastructure and other financial aid that neighboring states and cities are using to win a high-stakes economic development version of an arms race.

In public and behind the scenes, Memphis Mayor A C Wharton Jr., Shelby County Mayor Mark Luttrell and various civic officials including some affiliated with the Greater Memphis Chamber have worked to move the needle.

Late last year, Wharton made an impassioned plea to the Memphis City Council to allow the city-county Industrial Development Board to change up the way it grants tax breaks to keep businesses here in addition to bringing new ones to the area.

But even that wasn’t enough. Both mayors ultimately got behind an idea to re-jigger the whole system of economic development for the area and decided to build from scratch something they’re calling a new Economic Development Growth Engine.

In abbreviated form, it’s the elusive EDGE.

At the end of this month, several existing boards and agencies involved in the economic development game from a variety of angles – such as the IDB, which awards critical tax incentives to businesses – will disappear as they’re folded into the new EDGE entity.

Still to be chosen is an office for the group. Various procedural issues also are being finalized, such as choosing an attorney to work with the board and deciding meeting dates and times.

Even more important will be the choice of a president, who will immediately become an economic development power player as he or she is called on to juggle requests, concerns and questions among the mayors, the two local legislative bodies, business leaders and the new board.

The IDB’s swan song came last week, when that board approved six tax deals for companies planning to invest a little more than $200 million in the area and in the process create hundreds of jobs. It was the board’s final scheduled working session; it meets Tuesday, July 26, for a special meeting.

Before last week’s meeting got under way, both mayors had seated themselves at the head of the conference room table around which the board was assembled and made a few farewell remarks.

Wharton joked that the board members’ final checks were ready, a reference to the fact that the IDB is made up of all-volunteer members.

Turning serious, Wharton said, “Your check is our expression of gratitude. Your service has often been misunderstood, that you’re quote, ‘giving away tax dollars,’ close quote. But you’ve kept us in the ball game.”

Keeping Memphis and Shelby County “in the game” is a phrase the city mayor has often fallen back on.

Here’s Wharton speaking to City Council members last fall encouraging them to approve the creation of a pot of money that would be used to help keep companies here who otherwise had an incentive to leave for greener – and cheaper – pastures.

“I think most of you know I have probably been involved in most of the economic development projects or, let’s put it this way, efforts to retain some of our employers here over the last seven to eight years,” Wharton told council members. “The chamber does a great job. The IDB does a good job. But we are not equipped the way our neighbors are. We talk about PILOTs. But it’s hard to take a PILOT into a bank loan committee.

“We’ve got to send a signal that we’re serious. That we’re going to equip our agents, our recruiters. We’ve got to get in the game. The last Craig Brewer movie – we worked around the clock trying to keep that here. Everybody else has something to put on the table. What did this big city have? We lost that. Craig wanted to do that movie here so much, but we couldn’t play. We couldn’t get in the game.”

Only a week after Wharton’s comments, word emerged that Memphis-based Pinnacle Airlines Corp. was being courted heavily by the state of Mississippi, which essentially had a blank check to encourage the company to relocate its headquarters south of the Tennessee state line. Thanks to some intense scrambling and a major push involving almost every conceivable economic development group and official in the city, Pinnacle was convinced to stay.

It was a similar high-stakes scramble to convince elected leaders to approve incentives for later projects involving major corporations like Mitsubishi Electric Power Products Inc. and Electrolux. Such incentives are often the lynchpin of the deal yet dependent to a certain extent on politics.

Wharton told The Daily News the new EDGE board will improve that situation in a variety of ways. For example, international executives who need to fly in to Memphis will now have one stop to make as opposed to trying to find room in their schedule for multiple meetings.

“It’s just going to streamline those processes so that companies don’t have so many bases to touch,” said Kim Hackney, Luttrell’s senior policy adviser.

Coworking spaces: an economic development strategy?

By Jessica Stillman at GigaOm

When it comes to attracting companies to lovely but not exactly low-cost Santa Cruz, the city just south of Silicon Valley has a problem: no airport. Without an ultra-convenient air link the city struggled to attract large employers and the jobs they’d bring to the area. So what did the city’s creative mayor, Ryan Coonerty, decide to do? Start a coworking space.

“We realized after chasing a lot of companies that instead of attracting one 200-person business, we should attract 200 one-person businesses. The economic impact is bigger, and some of those businesses will grow,” he told Fast Company.

NextSpace, the start-up co-founded by Coonerty, just closed a $700,000 fundraising round and now has four locations in California. In Santa Cruz the space has attracted 200 members and has also proved a boon to nearby businesses, which are serving the programmers, therapists, comedians and lawyers who utilize NextSpace.

In an interview, Jeremy Neuner, the CEO of NextSpace, said that coworking spaces’ ability to boost local businesses and create jobs was very much on the NextSpace team’s minds as the company expanded, explaining that the promise of a lift to the local economy made convincing communities to welcome NextSpace easy:

In many cases, that’s the door opener. If you get a politician to open their mouth, the first five words out of their mouth are going to be jobs. As a matter of fact, the city of San Jose, their economic development director and the council member who represents downtown San Jose came to us. They said, ‘Look, much like the success you guys have had in Santa Cruz and San Francisco. We really think this is going to be good for our downtown and will you come and open up a NextSpace here?’ They were looking at it from that original notion of economic development and job creation.

Coworking makes sense for the community, Coonery agreed when speaking with Fast Company, while also underlining that it makes sense for individual workers as well. “The 9 to 5 at an office is a relatively recent phenomenon in human history, and I think it’s a short-lived phenomenon,” he says. “I don’t think it makes much sense to have all your people spend 45 minutes in traffic, come in, limit their interactions to each other, and disperse those people out at five or six at night.” Look for the trend to continue gathering pace, then.

Would a co-working space be an economic benefit for your community?

Monday, July 25, 2011

Montgomery tries to stop jobs slide

By: Rachel Baye | Examiner Staff Writer

Montgomery County lost 18,000 jobs in the past four years, a trend officials are trying to reverse -- but they warn that the growth may be slow.
The county is trying to lure more business through a variety of programs including a tax credit for biotech companies, an incubator for startups, an easier permitting and zoning process, and more marketing, Department of Economic Development Director Steven Silverman told a County Council committee Monday.

Silverman noted that Montgomery's economic development lags that of rival Fairfax County, which is generally considered to be economically and demographically similar. Fairfax has lost 12,000 jobs in the past four years.

"We're doing everything that we can at the local level," he said. "We're looking for as many suggestions as possible from the private sector about what else we can be doing."

County Executive Ike Leggett has proposed supplementing Maryland's $8 million biotech tax credit to attract more capital for the biotech industry to Montgomery County, Silverman said.

However, Councilwoman Nancy Floreen, D-at large, pointed out that coming up with the funding might be problematic.

Silverman also pointed to the county's Incubator Network, which provides training and other resources for entrepreneurs and has enrolled about 170 companies representing 700 jobs. The program is expected to help the companies grow, building more jobs for the county's struggling economy.

More than 100 companies have graduated from the program, creating about 1,500 jobs, Silverman said. He suggested the county dedicate more resources to the program, which he said creates "one job at a time."

"There's no investment that we can make that's going to create 10,000 jobs overnight," he told

The Washington Examiner.

Councilman Marc Elrich, D-at large, said the purpose of the program was a good one, but he questioned whether the program's resources were being used wisely.

Part of the solution also lies in making building easier for new and existing businesses, Silverman said. He pointed to a recent zoning approval that allows DarCars to expand its corporate headquarters, creating what he predicts will be at least 150 new jobs.

Silverman also described plans for a new marketing campaign to drive business to the county.

Floreen said the Montgomery Business Development Corp. will give the council's Planning, Housing and Economic Development Committee, which she heads, benchmarks to show where the local economy should be.

"There's a lot to be done, no question about it," she said.

Sunday, July 24, 2011

With jobs plan, Cuomo hopes competition is key

Written by

ALBANY -- When it comes to rebuilding the state's economy, Gov. Andrew Cuomo is hoping a little competition is a good thing.

Cuomo's plan to create jobs and spur business splits the state into 10 regions, pitting them against each other for a slice of $1 billion in economic-development grants and tax breaks pooled together through a single application.

But both he and municipal leaders hope that encouraging local governments, businesses and colleges to work together on regional plans will ultimately result in a unified approach to firming up the state's economic footing.

"We compete now, region to region, for jobs and for opportunities with business," said Monroe County Executive Maggie Brooks. "This allows us to coordinate a one-voice message in each region about the unique assets and resources that set us apart from the rest of the state."

The idea behind the competitive process is simple: Having the 10 regions compete will force them to come up with the best possible plan to get the biggest slice of funding they can get.

"What we're trying to do is foster the comprehensive regional approach and defy, if you will, the normal government operating framework which has frustrated that," Cuomo said on Wednesday.

Strange bedfellows
Most local government leaders agree it won't be easy. Within the 10 individual regions, there are many different communities that rely on different industries that will have to come together on a strategic approach.

In the Mid-Hudson region, for example, suburban counties such as Westchester and Rockland, which are home to a growing biotechnology industry, are paired with Sullivan County, a largely rural community within the Catskill Mountains.

The same is true in the Finger Lakes region, where the City of Rochester and heavily populated Monroe County will unite with agriculture-based counties such as Yates, one of the smallest in the state.

"You go from urban to suburban into exurban and rural, all within that same region," said Larry Gottlieb, director of economic development for Westchester County. "The question becomes: Can what's good for Westchester or Rockland equally serve Sullivan or Ulster (County)?"

Rockland County Executive Scott Vanderhoef said the idea of encouraging communication among regions is a positive step for the state's suffering economy. But he and all of the other local governments still need to look out for their own constituency, he said.

"When it comes to the Hudson Valley, I want employers to come to Rockland," Vanderhoef said. "I like Orange and Westchester (counties), but we all have our own self-interests of course when it comes to trying to lure or expand businesses, or retain them."

Cuomo's hope is to let leaders within the individual regions decide what's best for them on their own.

"I'm not going to tell Western New York what their economic future is, and the economic future in Western New York may be different than Central New York or the North Country or Long Island," said Cuomo, who added that the idea is for the state to "partner and fund (the regions') vision."

The success of the program will depend largely on who is putting the plans together, Gottlieb said.

Lt. Gov. Robert Duffy, the former mayor of Rochester, will serve as chair of councils for all 10 regions, to promote "synergy" among the different plans, he said. Those councils will be charged with developing a five-year strategic plan for their individual regions however they see fit.

Cuomo will appoint two vice chairs to each region, and leaders from larger municipalities and each county will serve in an advisory capacity. A spokesman for Cuomo said the governor's appointees would be announced "in the coming days."

"In principal, the idea of creating an atmosphere of competition is healthy," Gottlieb said. "The question is, who are on the teams that you're putting on the field to compete against each other."

3 S. Tier cities in 1 boat
Binghamton Mayor Matthew Ryan, whose city is in the Southern Tier region along with Ithaca and Elmira, said he believes a little competition is "healthy" when it comes to economic development, but only when it strikes the right balance.

"If you break it down to have too much competition between municipalities in different areas, that's not good either," said Ryan. "It's better to try to capitalize on your strengths. But it's going to be interesting, let's put it that way."

While the success of Cuomo's jobs plan will play out over the next several years, state Association of Counties Executive Director Stephen Acquario said New York is in desperate need of consistency in its economic vision.

"Essentially, as a state we're well behind where we should be as far as attracting and maintaining business," Acquario said. "So I think it's a good first step and a smart way for the state to address jobs and the economy by taking advantage of communities."

Marketing message unveiled for Hinds

Written by
Ruth Ingram

Hinds County makes a difference.

That's the mantra of a branding campaign unveiled Friday by urban planners hired by the Hinds County Economic Development Authority to create a positive marketing message.

"We want to give you a set of tools you can use to tell the story of Hinds County - of what it is, and what it has to offer," said Tripp Muldrow of the urban planning firm Arnett Muldrow and Associates of Greenville, S.C.

Speaking before about 25 Hinds County residents, business representatives, elected officials and leaders in the Belhaven and Fondren neighborhoods, Muldrow and his brother, Ben, emptied a tool chest of advertising messages and advice.

One question is repeated on a series of ads that feature communities from Clinton to Raymond, state and federal government, health care amenities at the University of Mississippi Medical Center and civic leaders:

What difference does it make?

Key to it all is the county's new branding statement, gleaned from comments made by residents who attended a series of five public meetings over the last three days.

"We are Hinds County. We are the proud home to the Capitol of this state," it says in part. "We are a collection of neighborhoods and communities ... of charming towns and hip neighborhoods.

"One in every 10 Mississippi businesses call Hinds County home. We are a retail powerhouse with $2.9 billion in sales. We are downtowns big and small experiencing remarkable reinvestment. We are a center for entrepreneurs that see the opportunity in our dynamic region."

The message is just as frank as it is promotional.

"We know our work is far from complete, and we do not cower at the problems we face," the statement says.

It's accompanied by a logo to be used in advertisements: an "H" and a "C" intertwined in the shape of a globe and the words "Hinds County ... A world of difference."

"The thing we want to really impress upon you all is that you are your greatest critic," Ben Muldrow said. "When that happens, you have to create a system to allow you to be proud again of the place you call home.

"We want to set up the ability for you to be constantly reminded not just how attractive you are, but how impactful."

The branding campaign "is not geared nationally or internationally - yet," Tripp Muldrow said. "We've got to work on getting the message out at home."

Hinds County must be bold in tooting its own horn on how it makes a difference for residents and the 21,000-plus businesses that call it home, they said.

One small example with a big message: Ben Muldrow recalled eating at Gibbs Grocery in tiny Learned in west Hinds County.

"I got the best filet mignon I've ever eaten off a paper plate," he said.

And Tripp Muldrow recounted a visit years ago to Jackson and seeing the Standard Life building, darkened and empty, on the downtown Jackson landscape.

Today, it's vibrant, houses luxury apartments, and the red neon sign on its upper floors is a beacon of progress and hope.

"Far from Standard," an ad picturing the glowing red sign and the Hinds County logo says. "What difference does it make?"

The authority is paying Arnett Muldrow $9,750 plus travel costs to lead the branding process.

"I am blown away with what you guys have done," said Kimberly Hilliard, a Jackson State University administrator. "Is there a budget to advertise this?"

The ads can be used by any city, business or group in the county, and its own logo incorporated into it, said Development Authority Executive Director Blake Wallace. "It can be pushed out in so many venues" as part of an organization's marketing budget.

The message also can be conveyed through Facebook, Twitter and other social media, he said.

"How do you see taking this to an external market for economic development?" asked Clinton dentist Ryan Tracy.

The media hasn't always portrayed Hinds County in a positive light, Tripp Muldrow said. "You can say, 'There's a world of difference in that and what we really are,' " he said.

Those at the meeting were united in believing the branding campaign must be bold and loud.

"It's time to be confident," Ben Muldrow said. "This forces you to work and tell the story."

"Your supporting (advertising) copy will be important, so that it doesn't sound like a community service announcement," said Pearl resident Janet Walker.

"You're talking about bigger things."

Run with it, Tripp Muldrow encouraged.

"There's an energy that's simmering here," he said. "We need to give it an outlet."

Friday, July 22, 2011

Linamar comes at a price, but Asheville-area officials say it's worth paying

Written by Mark Barrett

SKYLAND — Forget about a free lunch. There is no such thing as getting a big employer for free either.

Buncombe County and Asheville officials say they had little choice but to offer Linamar Corp. $9 million in incentives in addition to the $2.7 million coming from state government if they hoped to persuade the Canadian manufacturer to bring 400
jobs to the former Volvo Construction Equipment plant here.

Linamar could have chosen to build on free land in the Greenville, S.C., area instead, officials said.

“It got down to us and another state. You don't have many chances to get a plant like this,” said Jon Creighton, assistant Buncombe County manager.

“When you start competing with South Carolina, you've got to get real serious,” he said, because the Palmetto State offers so many tax breaks and other incentives.
Buncombe County's unemployment rate is 7.5 percent, and job growth following the recession has, as in much of the country, been relatively anemic.

In that kind of atmosphere, Buncombe County Commissioner K. Ray Bailey said deals like the Linamar project — projected to offer workers an average annual wage of $39,752 — are exactly what his constituents want.

“People here (want) jobs so our young people can stay in this community,” Bailey said.

Workers will machine metal parts for axles of giant off-road mining trucks that Caterpiller will manufacture in Winston-Salem and for tractor-trailer power trains that another division of Volvo, ironically enough, makes in Hagerstown, Md.

Production is to start by the end of November, although a company official said it will take most of 2012 for the plant to get up to full speed.

For nearby businesses hurt by Volvo's exit, that will happen no time too soon.
The plant shut down in early 2010, putting 228 people out of work, although employment figures had been higher in previous years.

“When Volvo closed, we lost a lot of good customers,” said Sergio Torres, a supervisor at Tucson Southwest Grill on Hendersonville Road. Linamar is “going to be awesome for us.”

Deal maker?
Whether Linamar might have come here without incentives is a tough question to answer — although it's an academic one, since virtually every locality is offering them.

Getting started quickly was important to the company, and having an empty industrial building available was a big lure, said Nick Adams, a group president for Linamar.

South Carolina's offer only involved raw land where a building would have to be constructed, local officials said.

Speaking at Thursday's announcement of the deal at the Asheville Area Chamber of Commerce's annual dinner, Adams and Gov. Bev Perdue said factors like a workforce with substantial experience in precision metal machining, the availability of training by the community college system and proximity to customers were also big parts of the deal.

“Everybody made it possible,” Adams said. “We couldn't say no, I guess.”
Bob Orr, a former state Supreme Court justice who now heads the N.C. Institute for Constitutional Law, said before the deal was announced that officials often overestimate the impact that incentives have.

“No matter how sweet a deal, particularly if it's a big company with a big operation, they're going to make a business decision based upon all the other factors and not on incentives,” he said.

Orr objects to incentives, saying other taxpayers have to pay them to benefit a private interest.

“It skews the marketplace to begin with in that you've got government picking and choosing which companies get subsidized by public money,” he said.

Buncombe County's purchase of the Volvo plant is also troubling because it amounts to the county giving a higher priority to manufacturing than to other uses, Orr said. County officials say other buyers had looked at the 65-acre site as a site for retail uses or for apartments.

“One wonders how smart it is for government to jump into the marketplace (and) pull a piece of property out of circulation,” he said.

Making it

Government officials make no apologies.
Manufacturing is and has historically been one of the area's best-paying sectors. Average annual earnings for manufacturing workers in Buncombe County last year were $47,410.

That's more than twice the $23,148 the average retail worker got and almost three times the average of $15,941 for those in hospitality and food service.

Perdue drew loud applause from the crowd at the Chamber of Commerce meeting when she told them Linamar “is a company that makes things again. We're manufacturing products in North Carolina.”

Creighton said that under the county's incentives policy, he would ordinarily have recommended that the county pay Linamar about $3.5 million.

But, a larger figure was needed to compete and, “The perception here is this company's got a real potential to grow,” he said.

Linamar's agreement with the county says it must invest at least $125 million in the Skyland plant by 2020 and create 400 jobs to receive the entire $6.8 million net incentives payments the county has agreed to.

Planned state and local payments are tied to Linamar meeting job and investment goals.

“There's no upfront cash” from North Carolina, said Tim Crowley, a spokesman for the state Department of Commerce. “It's based on performance. If they don't create the jobs, they won't get the money.”

Two officials at the Economic Development Coalition for Asheville-Buncombe County board predicted that Linamar will be here longer and create more jobs than the agreement requires.

There's plenty of land available at the 65-acre site, said Bailey, chairman of the EDC board as well as a county commissioner.

“In my opinion, (Linamar) will create as many as 800 jobs over time at that site … and indirectly, many, many more,” he said.

“I do know they have long-term contracts that have spurred this investment, so we feel very comfortable about their long-term commitment here,” said Ben Teague, EDC executive director.

He noted that the Volvo compound comprises three buildings.

“They envision filling up one building with this investment, and they envision filling up a second building and maybe even building a third building. They'll be seeding and growing here for a long time,” Teague said.

Linamar will not by itself produce enough tax revenue to the county to repay the county's incentive payments unless it adds more jobs, according to county figures.

The county calculates that the $125 million investment and 400 jobs will result in $2.4 million in property tax revenue and $1.4 million to Buncombe County.

But economists say that a manufacturing job results in another 1.6 or so jobs created because of spending by the plant and those who work there, Teague said. That in turn will result in additional tax revenue, he and other officials said, as well as other benefits.

“You have to look at the restaurants near the plant, the grocery stores, the sales tax revenue the city will get,” Asheville Mayor Terry Bellamy said. Then there's the impact on individuals: “A family that has Medicaid now can afford health insurance with this job,” she said.

Staff writers John Boyle and Romando Dixson contributed to this report.

Friday, July 15, 2011

Chamber rebrands Cornerstone: Welcome to JAXUSA

by Karen Brune Mathis
Managing Editor

Cornerstone is turning the corner to a new brand.

The Jacksonville Regional Chamber of Commerce will formally announce today that the Cornerstone name is being changed to “JAXUSA Partnership.”

“It was totally precipitated from the marketplace,” said chamber Executive Vice President Jerry Mallot, who was Cornerstone president and will continue the title with JAXUSA.

The full name is JAXUSA Partnership For Regional Economic Development.

Cornerstone is the private, nonprofit division of the chamber. It is a regional partnership that markets the area for economic development.

“We kept hearing from site consultants and others that when we know you, Cornerstone is a great brand, but when you are trying to create awareness of who you are when you are communicating in this country or in other countries, ‘Cornerstone’ has no meaning,” he said.

“It could be any sort of organization and you are missing the opportunity of giving some indication of who are and where you are in your initial contact,” said Mallot.

He said people often disregard initial contacts if they do not recognize the name or location.

The announcement will be made at today’s Cornerstone meeting. It’s at 11:30 a.m.-1:30 p.m. at the Hyatt Downtown. The brand will be rolled out in the fall.

The logo is blue and green with what appears to be a flag over the J, which Mallot said is a directional triangle pointing to the northeast, as in northeast Florida.

The Cornerstone Economic Development Partnership covers Baker, Clay, Duval, Flagler, Nassau, Putnam and St. Johns counties. JAXUSA will continue to cover those counties.

Mallot said the chamber has been exploring a rebranding for a while.

“We knew it was uncomfortable for our regional partners,” he said, in telling them they should use the “Jacksonville” name.

“We got serious about it when we had a site consultant group here last November and they unanimously said, ‘hey, you really need to do this.’”

Mallot said the St. John & Partners advertising and marketing firm walked Cornerstone through the process. The process included working with the partner counties “to look at the logic of it and what their concerns are and we worked together.”

The decision: “Let’s use the airport code for JAX.”

“It allows us to be short and sweet in terms of the name,” he said. Adding USA, he said, tells national and international clients where JAX is.

“It really came together quite well,” said Mallot.

“A different name is more likely to allow us to engage with more companies,” he said.

Mallot said that while the name is announced today, the brand will roll out in September or October.

He said internal preparations must be completed, including paperwork changes, although he said there’s not as much in light of the use of online materials.

Online changes are much easier, he said.

Mallot said St. John & Partners performed the work as an in-kind contribution.

Mallot said the discussion about branding began at least 2 1/2 years ago, but began in earnest with the site consultant remarks in November.

It was frequently referenced during the eight-month Jacksonville Community Council Inc. “Recession Recovery and Beyond” study, which concluded in May and was presented in June.

Regional rebranding was one of the study group’s recommendations.

In a statement, the chamber said the new name “makes a direct connection to the Northeast Florida region and showcases its geographical location in the United States, which is important not only for domestic prospects but also for international prospects.”

Mallot also is an executive on loan to the administration of Mayor Alvin Brown to review economic development policies and procedures and to take several months to make recommendations.

“It’s all about jobs,” Mallot said in a chamber news release.

“Our new name combined with the commitment of our new administration and our regional partners will help potential prospects see Northeast Florida as the best place to expand their businesses.”

In the statement, Mallot said that one-third of the region’s economic development prospects come from outside of the United States and involve a foreign corporation.

“Opportunities in the international marketplace are growing. Just six years ago, only 10 percent of Northeast Florida’s new business leads represented the international market,” he said.

JAX is the airport code for Jacksonville International Airport, which the chamber said often is the first site experienced by national and international visitors when visiting the region.

“With the increasing importance of online technology and search engine optimization, research shows incorporating USA into the new name should be beneficial for JAXUSA Partnership and international businesses alike, making it easier for prospects to connect early in the process,” said the chamber.

“And while Jacksonville may be a focal point, incorporating partnership with the descriptor, ‘For Regional Economic Development,’ communicates the economic strength found throughout Northeast Florida’s seven-county region,” said the chamber.

Mallot said the new identity “is an invitation to learn more about our region. It will help us interact and build relationships with companies and industry leaders who may consider expanding or relocating to our area.”

The chamber reports that the JAXUSA Partnership consists of 200 private sector investors in Northeast Florida in partnership with the chamber, the Jacksonville Economic Development Commission, the Jacksonville Port Authority, the Jacksonville Aviation Authority, the Jacksonville Transportation Authority, JEA, WorkSource and the seven counties.

According to the chamber, JAXUSA descends from the initial “Believers in Jacksonville,” the chamber’s first national recruiting effort in 1924. Business leaders traveled by rail to Northeast and Midwest cities to recruit business to Jacksonville.

In 1961, the “Committee of 100” was formed to operate as a chamber division to recruit businesses. Cornerstone evolved into the economic development arm of the chamber in 1990 and was formally established in 1991.

Throughout the years, the chamber used what it called “super funds” to raise money for marketing and recruitment.

Cornerstone launched a series of five-year commitments from corporate investors.

Now in its fifth five-year program, the chamber has raised almost all of its $10.5 million goal for 2011-15.

Cornerstone also became a regional development effort. In 1994, Clay County joined as the first formal partner outside Duval County. It was followed by Putnam and Baker and then Nassau. St. Johns and Flagler joined later.

New role of consultants changes economic development


There’s a powerful group rising in economic development, and their opinions of an area can be make-or-break for everyone lobbying business to their corner of the world.

Tom Elliot, executive director of Virginia’s @Corridor, appeared before the Smyth County Board of Supervisors Tuesday to talk about the changing face of economic development. The @Corridor is an organization that markets Southwest Virginia to the world as a good place to do business. It serves the counties of Smyth, Washington, Wythe, Bland, Carroll and Grayson and includes the cities of Bristol and Galax.
There is an uptick in the number of requests the organization has received to provide information about the area, said Elliot, “But we’re still not seeing them coming out and kicking the dirt yet.”

He added, “Getting them to visit is the first major step.”

That, said Elliot, is a whole new ballgame with new players. Previously, Elliot relied heavily on the Virginia Economic Development in Richmond to forward prospects. While that is still very important, the @Corridor has had to become much more proactive in seeking its own.

“When times were booming, we didn’t have to do as much proactive marketing,” he said.
Once upon a time, he might have contacted companies directly to “sell” Southwest Virginia to them as places to expand. Those opportunities are fewer.

“Typically, companies have gatekeepers that keep you from getting to the people you need to get to,” he said.

They are the site selection consultants. And going around them can be perilous to a region’s chances of attracting the firms they want.

While the @Corridor has always considered consultant relationships as an important part of their strategy, they are now critical. Companies are increasingly using site selection consultants to help them make their next moves. Elliot says 80 percent of significant prospects are generated by these deeply influential and highly paid people. They are not used for selecting sites so much as eliminating them, and that can happen before an area even knows it’s being contemplated.

The @Corridor is changing strategies to woo these consultants, whose perception of Southwest Virginia may be make-or-break for the area. A new website for the @Corridor is planned, and Elliot said the organization hopes to contract a site selection firm to create one for them. That way, he said, the @Corridor will have a more easily navigable site with the information consultants want easily at hand. Consultants check websites first, then make a contact if they want further information.

A second component of the strategy is building relationships. Elliot is going to more conferences than trade shows, as he has more of a chance to mix and mingle with consultants at conferences. Some of these conferences offer valuable panel discussions, others offer valuable one-on-one meet and greets with these consultants, who represent a stable of clients at one time.

“You have to build relationships with the right people,” he said.

Elliot has even changed his business card to add a map highlighting Southwest Virginia in relation to 18 surrounding states. He wants consultants to know where we are even as he is introducing his name.

But what do they want?

The criteria companies and their consultants consider includes geographic location, then sites and buildings. With the building boom over, companies are looking for existing buildings that might suit their purposes. They want to lease, not buy. Transportation, including convenient access to rail and highways, is considered, too.

Infrastructure is also important, as some companies require huge amounts of resources, even their own electric substations. Water and sewer is crucial. The infrastructure component, Elliot said, “can be huge.”

Next, companies look what incentives they might be able obtain to locate in a certain area, such as tax breaks. Real estate tax breaks are not as important as machinery tax breaks – the machinery in a building often far outstrips the value of the real estate. And while localities are loathe to dangle carrots like these at times, Elliot said, “Incentives always come in the picture. If we don’t do it, we’re behind.”

Finally, they need a qualified workforce.

“That’s the one that keeps them awake at night,” he said.

There is a shift from traditional to advanced manufacturing happening. Capital investment is higher. The number of jobs is fewer, but the jobs are better.

Companies look at the quality of life in an area, and Elliot said the @Corridor used to give that more stress, but companies now find that much lower in importance unless they are relocating a large group of employees.

Firms are also working on a compressed timeframe, wanting to be up and running in as little as six-months. They want all these components, and they want them now.

High stakes

The nationwide economic downturn has resulted in a more competitive race to woo consultants and their clients to Southwest Virginia.

In 2005, 1,130 jobs were added to the area with a capital investment of $214.3 million. In 2008, only 304 jobs had been added to the region, and investment dollars had slid to $35.2 million. Elliot pointed out that one major announcement was just about to press when the project was withdrawn on the gloomy economic outlook.

Last year, 452 jobs were added, and capital investment (which had risen in 2009) dipped to $40.8 million.

Why not Southwest Virginia?
As time goes on, the @Corridor will be seeking more information when Southwest Virginia hasn’t been selected for business. That’s why building relationships with the consultants is important; but first, said Elliot, Southwest Virginia has to make the short list for a project. Economic developers will never know if consultants don’t get past the “just looking” part of surfing the Web or requesting more information.

Elliot said it’s also important to know who we want to attract to Southwest Virginia. He is expecting results from a consultant study to find out what industries to target for the area.

The whole process, said Elliot, “is more a science than it used to be.”

Tuesday, July 12, 2011

Pa. Budget Cuts Economic Development By 35 Percent

HARRISBURG, Pa. -- Attracting out-of-state businesses and helping revitalize communities is getting a bit tougher for state officials under a new Pennsylvania budget that cuts more than $114 million from the Department of Community and Economic Development.

The 35 percent funding reduction to the agency affected dozens of programs and imposed consolidations designed to make recipients work together, regionalize or compete head-to-head.

The reduction is the latest in a series of cuts that have left the DCED with a $213 million budget, down from $327 million last year and $631 million just four years ago.

The new spending plan eliminates all remaining legislatively directed spending referred to as walking-around money, or WAMs.

The Corbett administration said it's trying to make the agency run more efficiently.

Monday, July 11, 2011

New Hampshire’s secret salesman luring Bay State firms across the line

By Jenn Abelson, Globe Staff

CONCORD, N.H. - New Hampshire pays Michael Bergeron to be a full-time thief, sending him across the border in an unmarked black sedan to poach Massachusetts companies.

To help keep his missions undercover, the business recruiter even scraped the New Hampshire state seal off his Ford Fusion. Equal parts real estate agent, financial adviser, and deal fixer, Bergeron has lured dozens of Massachusetts companies to the Granite State over the past few years with promises of lower tax bills, cheaper office and industrial space, and fewer regulations.

John Hancock Financial and Liberty Mutual Group are among the high-profile firms that recently moved significant parts of their operations over the state line - partially because of Bergeron’s pitches. And an increasing number of small and midsize firms are considering migrating as a way to reduce costs in uncertain economic times.

“New Hampshire has become an easier place to do business as Massachusetts has become more difficult,’’ said Bergeron, who works as a business development manager for the New Hampshire Department of Resources and Eco nomic Development. “It’s a lower cost to do business here and you still have the availability of the skilled workforce in Massachusetts.’’

His PowerPoint presentations highlight what New Hampshire officials say is Massachusetts’ bad-business reputation. They cite expensive real estate, drawn-out permitting processes, and higher taxes.

There are no official statistics from Massachusetts or New Hampshire on the number of companies that have moved north. But Bergeron estimates that at least 5,000 new jobs have been created over the past five years as a result of Massachusetts businesses moving to his state.

Massachusetts officials and business leaders deny that a mass exodus is underway, although they acknowledge that New Hampshire’s aggressive recruitment tactics can’t be ignored.

The constant assault on Commonwealth companies is more irritating than ominous, said Greg Bialecki, Massachusetts’ housing and economic development secretary.

“They haven’t done any serious damage,’’ he said of New Hampshire’s efforts.

Nonetheless, Bialecki said, officials have tried to make the state more enticing to businesses. In recent years, for instance, Massachusetts has lowered its corporate tax rate, offered tax incentives and other funding, and streamlined the permitting process through its new permitting ombudsman and Permit Regulatory Office.

Massachusetts has historically had to fend off New Hampshire’s business recruitment campaigns, said Paul Guzzi, president of the Greater Boston Chamber of Commerce.

Friday, July 08, 2011

Kentucky hires firm to create economic development plan

By Scott Sloan —

The state has hired a consulting firm to help it craft a strategic plan for economic development with the goal of adding jobs.

The 13-member Kentucky Economic Development Partnership Board, which directs the state's economic development efforts, has hired Boyette Strategic Advisors for the plan, to be called "Kentucky's Unbridled Future."

It is expected to be finished by October and will identify emerging business sectors in the state and highlight ways Kentucky can position itself for success.

"State economic development agencies in today's global economy must have a clear understanding of their strengths, weaknesses and advantages on a global level," Luther Deaton, vice chair of the Partnership Board and CEO of Central Bank & Trust, said in a statement. "They must adopt an adaptable, strategic and modern approach to economic development.

"The Partnership Board very much looks forward to the creation of such a plan for the commonwealth."

The plan will be based on research by the consulting firm and information culled from seven public input sessions to be held across the state in the coming month. Residents also may fill out an online survey.

"There isn't a predetermined agenda for the outcome of this strategic plan," said Mandy Lambert, spokeswoman for the Cabinet for Economic Development. "This process will help us identify emerging business sectors and the kinds of jobs Kentucky should target."

A prominent University of Kentucky researcher questioned, though, whether a consultant-produced plan is the best step for the state.

"Kentucky faces some significant challenges going forward," said Ken Troske, director of the Center for Business and Economic Research at UK. "Before designing new strategies going forward, we need to do a very careful assessment, essentially an inventory, of where are we right now.

"We need to examine what we think will be significant changes and how well-suited we are to handle those changes."

Troske questioned whether all Kentuckians have a good understanding of the state's current economy.

"Less than 1 percent of the state is involved in coal or agriculture," he said, noting the common misperception. He also said it might surprise some to learn the state's top export overseas is airplane parts, followed by chemicals.

"There's a lot of data out there," he said. "I think it's much better to do a study that's deeper ... than an economic development consulting firm would be capable of conducting."

Read more:

Thursday, July 07, 2011

Economic study lists plusses and minuses of Evansville area

By Susan Orr

EVANSVILLE — In order for the Evansville area to move forward economically, an economic development official says, its residents need to start thinking more strategically.

"We have to understand what's important, and we have to be on the same page," said Greg Wathen, president and chief executive officer of the Economic Development Coalition of Southwest Indiana.

And Wathen hopes a regional economic study, the first part of which was made public Thursday, can help shape local thinking.

Wathen's organization commissioned the study as a way to better understand this area's assets and how to build upon them.

The study was conducted by two firms: Garner Economics of Atlanta, and Newmark Knight Frank of Chicago. It was paid for with a $231,482 federal grant secured as a result of Whirlpool's closure of its refrigerator plant here in 2010.

Part one of the study, called a Competitive Realities Report, outlines this area's strengths and weaknesses as compared to benchmark communities of Chattanooga, Tenn. and the Davenport/Moline/Rock Island area in Iowa and Illinois. It also looks at this region's demographics, labor market and industry growth.

This part of the report presents information without making any conclusions or recommendations, so it's not immediately obvious what to make of the findings, Wathen said.

"It's a guide. It's a first step and a guide," Wathen said.

Still, some of the data in the Competitive Realities Report points to the area's specific strengths and weaknesses.

According to the report, Evansville rated higher than its benchmark communities in these areas:

n Its central location, within a day's drive of two-thirds of U.S. markets

n Access to interstate highways, rail service and ports facilities

n Access to four-year and postsecondary degree programs

n Quality of K-12 and postsecondary education

n Housing costs

n Cultural resources

The area rated lower than its benchmark communities in areas that included:

n High-speed Internet service. The Evansville area ranks 368 of 370 communities nationwide based on upload and download speeds, the report noted.

n Availability of certain types of labor, including skilled industrial and clerical workers, technicians, scientists and managers

n Quality of labor/management relations

n Availability of "fully served and attractive" office and industrial sites

n Availability of venture capital for startups

n General appearance of many parts of the community. The report notes that Newburgh "shows exceptionally well," while Evansville, Princeton and Oakland City do not.

In this part of the survey, the researchers analyzed 65 factors in all. Tom Tveidt, a research economist with Garner Economics, said the factors were selected because they are the things that companies most commonly analyze when making investment and relocation decisions.

"Certain things just pop up again and again," Tveidt said.

The report, Tveidt said, was based on both economic data and on personal visits by him and the report's other authors.

More specific details, including recommendations for target growth areas, will be released later this summer, Wathen said.

The entire project will provide what Wathen described as a "road map for success."

"I think every community needs to take a hard look at itself and build a strategy based on its assets."

Wednesday, July 06, 2011

Rhode Island, Virginia vie for Toray Plastics expansion

By Andy Smith
Journal Staff Writer

NORTH KINGSTOWN — Toray Plastics (America) has an expansion plan that could mean a $200-million investment and up to 200 news jobs. Toray president and CEO Richard R. Schloesser says the new jobs will either stay in Rhode Island or go to Toray’s other manufacturing plant in Front Royal, Va.

Schloesser said he’s already had calls from economic development officials in Virginia. In the meantime, Toray representatives and the state Economic Development Corporation have been in meetings to discuss tax breaks, work-force training grants, land acquisition and other incentives that would persuade Toray to expand its business in Rhode Island.

Competition between states to land jobs is how the economic-development game is being played these days, said Jeff Finkle, president and CEO of the International Economic Development Council in Washington, D.C.

“If we did nothing, we would continue to lose companies to other states,” said state EDC Executive Director Keith Stokes. He said that’s unacceptable in a state with a 10.9-percent unemployment rate, third-highest in the nation, with 62,000 people out of work.

Schloesser, who is looking to make his decision by the end of the year, said he’d prefer to expand here. But he’s concerned about the cost of doing business in Rhode Island. “It’s a very expensive state to do business in,” he said.

He said Toray Plastics, a subsidiary of Japanese company Toray Industries, has not contacted Virginia, but Virginia officials have been calling him. “We know we will get help out of Virginia,” Schloesser said.

He noted that Virginia’s governor, Bob McDonnell, visited Toray Industry executives in Japan during a recent trip to Asia.

Suzanne West, a spokeswoman for the Virginia Economic Development Partnership, said her agency does not comment on any project before it’s announced.

In Rhode Island, Schloesser met with Stokes and Governor Chafee at Toray’s North Kingstown facility on April 19.

“Do I [expand] here, or do I do it in Virginia?” Schloesser said he asked them.

Since then, Toray executives have met with EDC staff and Stokes on May 16 and June 21, with another meeting scheduled for this month.

Stokes said Toray might be able to qualify for tax credits under the state’s provisions for manufacturing research and development, and another for job creation. He said officials from the Quonset Development Corporation have also been involved in the discussions about land acquisition.

“Companies are making their decisions based on costs,” Stokes said. “It’s not lifestyle. It’s not loyalty. It’s costs.”

Stokes said certain costs –– utilities, health care, land and taxes –– are higher in Rhode Island than in other states. What the EDC is trying to do for Toray, he said, is come up with a package to make Rhode Island cost-competitive.

One of Toray’s big concerns is energy. The company is the largest consumer of electricity in the state, and it went to court to appeal the power-purchase agreement between National Grid and Deepwater Wind, which plans to build wind farms in the waters off Rhode Island. Toray contended the agreement would drive the price of power too high.

In an interview last week, Schloesser said the court’s decision will have “some impact” on the company’s expansion plans.

On Friday, the Rhode Island Supreme Court upheld the power agreement, ruling against Toray and fellow plaintiff Polytop Corp. Schloesser could not be reached for comment Tuesday.

Stokes said the EDC has worked with Toray frequently over the past 20 years. In 1992 and again in 2006, the Rhode Island Industrial Facilities Corporation issued bonds to help finance previous Toray expansions. Last year, Toray received $500,000 in low-interest loans and an additional grant of $250,000 to install solar panels.

Some economic-development experts say offering incentives to individual companies is a bad idea.

“It’s an unseemly business, this incentive game” said Finkle of the International Economic Development Council in Washington, D.C.

“Is it the right decision for the state, or are you doing it because any job is worth subsidizing right now? I hope the state doesn’t get stupid, and open up the wallet too wide.”

Stokes said that in a perfect economic world, Finkle has a point. Rather than a whole set of incentives and inducements, Rhode Island would be better served by a lower corporate-tax rate, a stable budget and a predictable business climate.

But, said Stokes, we’re not living in that perfect world. Stokes said that when it comes to economic development, keeping existing companies, particularly an expanding company, is even more important than luring new ones.

Stokes said the incentives under consideration for Toray are not “deals,” but ways of compensating for the higher fixed costs of doing business in Rhode Island.

Schloesser said he is worried about the long-term economic climate in the state. He said some of Chafee’s tax proposals, particularly a 1-percent tax on manufacturing equipment, could have been a deal-breaker for Toray. But that idea never made it through the General Assembly.

“We’d like to have the expansion here, but we have questions about what will happen to the state. Is this going to be a good place to do business in the next five years?”

Tuesday, July 05, 2011

Lexington, Louisville to partner in effort to attract regional economic development

LEXINGTON, Ky. — Kentucky's two largest cities plan to study ways they can partner to attract regional economic development.

Mayors from both cities say they specifically are interested in becoming more competitive in advanced manufacturing, such as the automobile industry.

Lexington Mayor Jim Gray and Louisville Mayor Greg Fischer noted that the region already has two Ford plants and a Toyota plant, but said there is room for more.

Businessman Jim Host has been chosen to lead an 18-month study that will be undertaken by a committee appointed by the mayors. Host told the Lexington Herald-Leader he expects the first meeting to be in August or September.

Host, who lives in Lexington, oversaw development of the KFC Yum Center in downtown Louisville. He said being involved with that project helped him learn a good deal about Louisville.

"Up until last October, I drove every day from Lexington to Louisville to work on that facility and drove back at night," he said. "I've learned what makes Louisville work and have felt for many years that the Lexington-Louisville corridor should be like the Dallas-Fort Worth corridor."

Host said the formal partnership of the two cities will build on an informal one that began a few years ago.

"These two communities have always been at opposite poles, and it's crazy in this state for these two communities to not work together," Host said.

The Brookings Institution, a nonprofit public policy research firm in Washington, D.C., will assist the committee with the study and Laura Chandler, who worked with Host on the Louisville Arena Authority, will be the project manager.

The mayors plan to explain more about the study and its goals during luncheons next month in Louisville and Lexington.

Host said the study will have statewide significance.

"There's nothing more important to this state than the cooperation between Lexington and Louisville," he said. "Forty cents of every tax dollar generated in Louisville helps the rest of Kentucky, and 20 cents of every tax dollar generated in Lexington helps the rest of Kentucky.

"The better we can help economic development in the two cities, the better it helps the state.

Landing Mars: Topeka development group deployed mix of skills, incentives to snag candy plant

TOPEKA, Kan. — Economic development is a little like courtship, says Steve Jenkins, senior vice president of Go Topeka Economic Partnership, but as he describes the city's pursuit of a new Mars candy factory, tactics from the art of war also come into play.

Be aware of the enemy (the dozens of other communities also being considered). Be comfortable with secrets (code names for projects are useful). And choose weapons wisely (incentives tailored to the company being pursued).

State agencies and Go Topeka Economic Partnership apparently got the mix right. Last week, Mars Inc. announced it would build a 350,000-square-foot plant — its first candy factory in 35 years — in Topeka's Kanza Fire Commerce Park, at an initial cost of $250 million.

Groundbreaking is scheduled for August, with the plant expected to start turning out Snickers and M&M's in late 2013. Operated by Mars Chocolate North America, the plant is expected to have about 200 employees to start, with what the company said is the potential to eventually create 1,000 direct and indirect jobs.

Jenkins told The Topeka Capital-Journal that securing the largest single economic investment in the city's history began with the courtship-like side of economic development.

"It is based on relationships. Building relationships with companies is crucial," he said. "They trusted us, and we trusted them."

When competing with other cities — in this case, 82 potential sites in 13 states — it is important the entities aren't sitting across the table from each other. "We need to be sitting side by side with them," Jenkins said.

Go Topeka learned last September from the Kansas Department of Commerce's East Coast office about a company looking for a location.

The company — which was known only to Go Topeka as "Project Sweetness," later to become "Project Pepper" and then "Project Buffalo" — had specific criteria, such as rail access and a large amount of land.

Go Topeka answered several questions and heard from the company within two weeks about a visit to the city. Jenkins and several other people had to sign a nondisclosure agreement about the company, although Jenkins knew it was Mars.

The company sent a site selection committee to Topeka, where the visitors took photos of Kanza Fire Commerce Park and asked to see downtown.

"They want to be in a community that is on the move and vibrant," Jenkins said. "They are excited about the plans for downtown."

The Mars officials also headed to metropolitan Kansas City to look at a potential site, but they contacted Go Topeka within two weeks.

"Then things kicked into high gear," Jenkins said, with the company rapidly whittling down the possible sites to a handful.

More visits followed. Mars officials met with people from other major Topeka employers, such as Goodyear and Frito Lay, and from school districts, cultural groups and Washburn University. The local groups weren't told the company's name.

Next came months of financial negotiations that Jenkins said could sometimes feel like a battle.

"This is a tough business," Jenkins said. "It is intensively competitive. Those incentive packages become very important when you are down to the final two or three.

"There is a lot of strategy involved. You know your enemy is out there, but you don't know what they are using for weapons. It's intense. The larger the project, the more complex."

What emerged was an incentive package totaling slightly more than $9 million, including the land, site and infrastructure improvements, permit fees, and an agreement with Washburn to help train employees.

On the day before the deal's announcement in Topeka, Jenkins traveled to Mars Chocolate North America's corporate headquarters in Hackettstown, N.J., for the internal announcement.

"That place just erupted in applause," he said. "They are excited this company is growing."

Monday, July 04, 2011

Area business leaders prioritize job creation needs

By Mary Carr Mayle
Savannah Morning News

Members of Gov. Nathan Deal's Georgia Competitiveness Initiative came to town to find out what the private business sector needs to do to help create more jobs in Savannah and the surrounding area.

They left the Armstrong Atlantic State University Conference Center Thursday with a clear indication of what the group sees as most critical to attracting and keeping good-paying jobs - education and workforce development.

Although it was only one of six focus areas presented by state economic development officials, it came up time and again in almost every small-group discussion.

"We can't attract new industry or expand existing businesses if we don't have trained workers to fill jobs," said attorney Jon Pannell, speaking for his break-out group.

"For that reason, workforce development has to be a priority."

Other groups agreed.

"We need a true working three-way partnership - with business, educational institutions and government to increase our knowledge-based workforce," wrote one group in listing its priorities. Another group suggested that schools stress career development along with academics, adding that curriculums need to focus on critical thinking and problem-solving skills.

In looking at what they think hinders growth in the private sector, participants listed access to capital, an uneducated workforce and state regulations and red tape.

on the table

The Savannah meeting was the third of 12 regional forums to be held around the state this summer. The forums are designed to assess the state's current strengths and weaknesses, gather information and ideas from local leaders and develop recommendations that will ultimately stimulate job creation and economic growth.

"Everything is on the table with these meetings - there are no ideas we won't listen to," said Chris Cummiskey, commissioner of the Georgia Department of Economic Development, who co-hosted the meeting with Chris Clark, CEO of the Georgia Chamber of Commerce.

Georgia is considered one of the leading states to do business with, Cummiskey said, citing a recent CNBC poll that put Georgia's business climate at No. 4 in the nation.

"We're leading, but other
states, especially in the Southeast, are trying to catch up with us," he said. "We want to keep that gap from closing. We want to take our efforts to the next level."

During the six-hour meeting, participants used hand-held electronic voting devices to prioritize the issues they felt most important in the six focus areas that were drawn from a statewide survey of business and economic development officials.

In addition to education and workforce development, focus areas were infrastructure, innovation, business climate, global commerce and government efficiency.

"These are the same six areas site selection consultants look at when helping new business locate or expand," Clark said. "They're also the areas growing businesses are targeting."

The second-most discussed area was infrastructure, widely considered a major state asset.

"We have the best port in the country, a world-class airport and an excellent rail system,' Cummiskey said. "But we're not without our challenges."

One of those is transportation, and most participants were interested in learning more about the regional Transportation Special Local Option Sales Tax - or T-SPLOST - expected to be on the ballot next year. The state chamber's Georgia Transportation Alliance has offered help in passing the initiative to local business communities "willing to put skin in the game," Clark said.

Deal will use the information gathered at the 12 meetings to develop a statewide strategy to bring jobs and industry to Georgia. A full report is expected in November.

Sunday, July 03, 2011

Escambia, Santa Rosa team up on marketing

Although Escambia and Santa Rosa are neighbors with well-integrated economies, their separate chambers of commerce have a history of going it alone when recruiting new companies.

When Pensacola Bay Area Chamber of Commerce CEO Jim Hizer arrived last summer, he set as one of his key goals the marketing of the two-county area as a single entity.

Now, with a joint Escambia-Santa Rosa application for a $390,000 Economic Development Administration grant, Pensacola's chamber and Team Santa Rosa are taking a step in that direction.

"We've tried to do that in the past but it never came off," said Collier Merrill, a developer and restaurateur who is chairman of the chamber. "Now Escambia and Santa Rosa are working together and moving into a real partnership, but we're moving into it slowly."

Ferd Salomon, chairman of TEAM Santa Rosa, the county's economic development agency, said he believes the two counties are "in a pretty competitive position" to win the EDA grant.

The money was set aside by Congress last year to help oil-spill impacted communities.
If awarded, about $60,000 of the $390,000 would be used for a consultant to draw up a strategic marketing plan focusing on the types of target industries and jobs best suited for the Pensacola Bay area.

"We want to know what our best opportunities are to bring new industries to this area," said Brian McBroom, the Chamber's chief operating officer. "And we want to get this strategic plan up and running this year."

The remaining $330,000 would be put into revved-up marketing plans, including new website designs for both counties.

"Now that we've both agreed to act more regionally, we want to have events here that work toward both counties' advantage," Salomon said.

One key element of the new game plan includes wining and dining large groups of corporate site selectors in the Pensacola Bay area — an expensive, but effective, form of joint marketing, said Cindy Anderson, executive director of TEAM.

"What this grant will do is ... give us the money to host larger regional events here in this area," she said.

Merrill said that during the 20 years he's been involved with the Chamber, Escambia and Santa Rosa's business communities "have never really come together as they should have."

"Hopefully, this new regional alliance will work," he said.

Salomon is optimistic.

"I would say the relationship between TEAM and Pensacola's Chamber is good," he said. "It's certainly better than it has been. At the staff level, there's always been a tremendous amount of cooperation, and the two counties have never competed to the exclusion of the other."

In the past, Salomon said, most of the problems have been turf conflicts over political boundaries.

"From a pure business standpoint, there are no political boundaries," he said.

Saturday, July 02, 2011

New campus an incubator for green innovation

By Jeanine Benca
Contra Costa Times

LIVERMORE -- It has a big name, but then the i-GATE National Energy Systems Technology Incubator has a big job.

The mission of the 15,000-square-foot hub, for which a grand opening was held Thursday in Livermore, is to stimulate large-scale, high-tech business development around the region's two national labs.

About 300 supporters, including U.S. Rep. John Garamendi, Assemblywoman Joan Buchanan, Governor's Office of Economic Development Director Joel Ayala and other dignitaries converged to commemorate the launch of the Incubator headquarters at 7693 Longard Road in Livermore.

The goal is to unleash the economic potential of green transportation, renewable-energy technologies and high-performance computing, with an initial focus on solar energy, fuel cells, batteries, electric vehicles, next-generation biofuels and solid-state lighting, or LEDS, officials said.

"Our concept continues to be the same. We are holistically working to create opportunities by spurring new technology businesses," said Livermore Economic Development Director Rob White.

Major stakeholders in the first-time, multi-agency collaboration include the Lawrence Livermore and Sandia national laboratories, UC Berkeley and UC Davis, and the cities of Pleasanton, Dublin, San Ramon, Danville, Fremont, Tracy, Lathrop and West Sacramento.

About one-third of the Incubator site is designated office space, while the remaining two-thirds is industrial warehouse space



that can be used for manufacturing or laboratory work, White said.

ElectraDrive, a company that adds electric motors to gasoline trucks, was one of the first tenants to sign on, White added.

In addition to providing a physical space for companies to work, the site will also help coordinate public-private collaboration with academia and the Department of Energy, host seminars and networking events, and help facilitate business investment opportunities, officials said.

In February 2010, the region around the national labs was selected as one of six future "iHubs," or Innovation Hubs for Technology Development -- part of a new program of the state's Business, Transportation and Housing Agency.

The goal of the effort was, and is, to create jobs and expand the economy by fostering partnerships among private industry, academia and the labs, with an emphasis on developing cleaner, cheaper, safer automotive fuels and engines. More than 20 agencies led to the creation of i-GATE, or Innovation for Green Advanced Transportation Excellence.

Since then, the initiative has grown to more than 40 partners.

Other iHub designations are in Orange County, Sacramento, the Coachella Valley and San Francisco's North Bay and Greater Mission Bay regions.