Monday, June 23, 2014

Pittsburgh’s Path to Recovery

Ask the average American what they feel Pittsburgh, Pennsylvania, represents and you’ll likely hear Steelers football, blue-collar, middle-class workers, steel mills and coal plants.

If anything, Pittsburgh is considered the quintessential rust-belt city — historically focused on manufacturing and industry, but one that has fallen on hard times since the 1980s. Back then, strong foreign competition shuttered plants.

Counter to this image though, Pittsburgh is remaking itself by leveraging its regional strengths in education and health care and making strategic investments in innovation capacity.

Pittsburgh is now one of America’s leading centers of regional innovation and a model of state innovation policymaking. More here.

A Tug-of-War of Tax Breaks Tightens Across the Hudson

Late last fall, bankers from BNY Mellon went to state officials in New York and New Jersey with a proposition: The bank was planning to sell its headquarters on Wall Street and was looking for office space on either side of the Hudson River for more than 1,100 employees.

The bankers wanted to know who would cut the best deal.

In New Jersey, Gov. Chris Christie’s administration responded quickly with a hefty offer — nearly $100 million worth of tax credits — if the bank would move one mile west to Jersey City.

New York countered with its own incentive package that real estate executives say is worth millions of dollars if the bank remains in Lower Manhattan.

The bank is leaning toward New York, real estate executives say, but no victor has been announced and officials on both sides of the Hudson refused to discuss the high-stakes negotiations.

The tug-of-war is the latest skirmish in what is becoming a fierce competition between New York and New Jersey to heap subsidies on some of the country’s wealthiest corporations as enticements. With a struggling labor market, jobs are precious to both states, but in New Jersey there is also a political factor: Mr. Christie is widely presumed to be a contender for the Republican presidential nomination and has promoted himself nationally as a prudent financial steward. More here.

Nevada, Texas square off for Tesla battery plant

Jason Hidalgo and Anjeanette Damon, Reno Gazette Journal 

The battle for electric car maker Tesla Motors' multibillion-dollar battery plant is supposed to be a four-way race.

Some site selection experts, however, believe the fight for the Gigafactory likely boils down to one heavyweight and a plucky upstart.

In one corner is San Antonio, a city located in a big state with equally big pockets to invest in economic development.

In the other corner is Reno, which has less than a fifth of San Antonio's population and even fewer resources when it comes to ponying up financial incentives.

"A case can be made for both Arizona and New Mexico … and you have to give them credit," said John Boyd, a principal of Princeton, N.J.-based site selection firm The Boyd Company. "But the two leading contenders are Reno and San Antonio." More here.

Sunday, June 08, 2014

Rutherford Works: Chamber rebrands county's economic development effort

In the past few years the Rutherford County Chamber of Commerce has worked diligently to attract jobs to the county.

It’s efforts have been rewarded with high-profile relocations like the Amazon distribution center, the U.S. corporate headquarters of Schwan Cosmetics and mostly recently Enovate Medical.

Vice President of Economic Development Brian Hercules wants to continue the track record of success by rebranding the county’s economic development effort as “Rutherford Works.”

Hercules said he wanted to make Rutherford County more memorable to the businesses he courts. He believes this rebranding is the perfect way to do that.

“We want our citizens and those who are not familiar with us to understand that our county works for new and existing companies because of its many advantages, including geographic location, quality of life, educational systems and trained workforce,” he said. More here.

Experts say Shreveport-Bossier City has economic development advantage

Written by
Courtney Spradlin

Experts say North Louisiana and Shreveport-Bossier City have a competitive advantage over similar regions attempting to attract large economic developments — the ability to provide a skilled work force.

Experienced workers are an essential piece of what industries are looking for when considering a region for development, said Jerry Szatan, a Chicago-based economic development consultant.

Szatan is one of five consultants who are part of an advisory forum hosted this week by North Louisiana Economic Partnership and Southwestern Electric Power Co.

The consultants, members of the Site Selectors Guild, were invited to Shreveport-Bossier City as a way to showcase the area as a region ripe for development. The cost to bring the five was $25,000.

Large companies go to the guild as a first point of contact when considering a new development location, said Christine Rambo, NLEP spokeswoman.

Rambo said Shreveport-Bossier City isn’t as well-known as nearby New Orleans and Dallas, and the forum is a way the region can market itself as a viable option for economic developments the consultants may already be working on or may work on in the future. More here.

EDC unveils new branding, marketing plan at annual meeting

By TIM STUHLDREHER | Business Writer

Like communities across the country, Lancaster County faces a choice, Ben Wright told those attending the Economic Development Co. of Lancaster’s annual meeting Thursday morning.

It can accept whatever economic opportunities happen to come its way. Or it can actively court companies and industries and actively shape its destiny, he said.

Wright is CEO of Denver, Colorado-based Atlas Advertising, which specializes in marketing related to economic development, tourism and real estate.

To succeed in marketing themselves, communities must believe such efforts make a difference and commit the necessary resources to make them effective, he said.

“I think that’s the call today,” he said.

Right now, when most Americans think of Lancaster County, what comes to mind is the TV show “Amish Mafia,” he said.

The EDC is following Wright’s recommendations. With Atlas’ help, it has crafted a marketing strategy that calls for it to become much more aggressive in recruiting companies. More here.

Saturday, June 07, 2014

German official vows fight to unionize Chattanooga VW plant is not over

Contributing Editor- Nashville Business Journal
The fight to unionize Volkswagen’s factory in Chattanooga is far from over despite the United Auto Workers' narrow defeat in a February election in which workers declined to organize.

Frank Patta, general secretary of Volkswagen’s Global Works Council, has promised to help the UAW continue the push, the Detroit Free Press reports.

The UAW lost the unionization vote even though VW management agreed to be neutral. Patta, speaking at the 36th Annual UAW Constitutional Convention, said German union leaders are determined to create a German-style works council to represent Chattanooga workers.

In related news, Reuters reports that a decision on which VW factory will be chosen to produce a new line of SUVs is being held up as Mexico and Tennessee jockey to present the most attractive incentive package to VW.

How Michigan lost grip on Method Home Products

Crain's Detroit Business

Method Home Products could have made Detroit — or one of several other Michigan cities — home for a large soap manufacturing plant. It could have built a 200,000-square-foot factory. It could have invested $35 million. It could have created 100 green-manufacturing jobs.

Instead, the spoils went to Chicago.

A year and a half ago, Detroit didn't step up to help the San Francisco-based company through the labyrinth of tax credits, abatements, zoning laws, real estate rules, legal wrangling and everything else it takes to turn an abandoned brownfield site into a successful business, said Adam Lowry and Eric Ryan, the Detroit-area natives who founded Method.

Mike Finney, president and CEO of the Michigan Economic Development Corp., said his organization also dropped the ball by not providing site information or tax incentive information quickly enough — although the MEDC has since improved its business attraction efforts. More here.

EDITORIAL: Economic alliance better strategy

If there’s strength in numbers, the economic development group created by a coalition of 21 Black Hills-area communities may get more attention from businesses looking at relocating.

The Rushmore Region Alliance was formed last month with an eye at presenting the Black Hills region as one market rather than six different counties and 21 different communities.

"We will share in the work and we will share in the prosperity and the harvest that comes from our work," said Ben Snow, president of the Rapid City Economic Development Partnership.

The announcement of the new marketing group coincided with unveiling its new campaign strategy to attract businesses. The group’s slogan is "Face-to-Face with Freedom: conduct business with the freedoms our Founding Fathers intended" printed on a backdrop of Mount Rushmore. The campaign promotes the pro-business, anti-regulation climate of the area: "Less regulation, less red tape, less taxes, less trouble."

Rushmore Region Alliance officials pointed out that South Dakota has no personal income tax, low sales tax rates, few regulatory agencies and laws and policies that favor businesses. That combination, the officials said, is attractive to people who own a business. More here.

Spice giant McCormick is considering 4 states for its new HQ

Reporter- Baltimore Business Journal
Spice giant McCormick & Co. Inc. has opened its headquarters search up to the entire mid-Atlantic, including Northern Virginia.

Sparks, Maryland-based McCormick — maker of iconic products such as Old Bay Seasoning — is considering sites of between 300,000 and 350,000 square feet in Maryland, Delaware and southern Pennsylvania, along with Northern Virginia, according to real estate documents obtained by the Baltimore Business Journal. The search area is well beyond the scope of options CEO Alan D. Wilson discussed in March.

Although there has long been talk that McCormick would consider moving to southern Pennsylvania, the possibility of a Northern Virginia move is new.

McCormick, a spice company with $4 billion in revenue, is one of the largest employers in Baltimore County. It employs between 600 and 700 workers spread across four buildings in Sparks and Hunt Valley, Maryland, north of Baltimore City. The company wants to move into a new headquarters by April 2018. More here.

Tesla’s $5 billion plant proving a fickle mistress for bidding states

Senior Reporter- Phoenix Business Journal
Tesla is proving to be a fickle mistress for Arizona and other Western economic developers trying to land its $5 billion, 6,500-worker battery factory. Deadlines have come and gone, and CEO Elon Musk keeps changing the rules for the site selection.

Musk said at Tesla’s annual meeting this week he might have three sites as finalists for the plant, and a final decision might not come until the end of the year. That comes on the heels of moving deadlines, and California first being out and now being in the running for the plant. Musk also said previously that there would be two finalists.

“I can’t wait until it's over,” said one local economic official working on a Tesla bid.

Locations in Surprise, Goodyear and Buckeye could be in the running for Musk’s short list. The Surprise Railplex in the West Valley could be a serious contender and part of a $50 million Arizona incentive package for the electric auto maker.

The quandary is that Tesla could include Texas — and its Texas-sized incentives — on the short list, sparking a bidding war with other states, or it could simply use other states to squeeze a sweetheart deal out of its home state of California. Tesla is based in Palo Alto and has its assembly plant in Fremont. California wants to keep Tesla, especially since Toyota recently decided to move its U.S. headquarters from Los Angeles to Dallas.

Details of private nonprofit to handle NC recruiting, marketing gets initial legislative OK

RALEIGH, North Carolina — North Carolina lawmakers gave initial approval Thursday to similar but competing bills that would transfer many Commerce Department functions to a private nonprofit corporation, bringing closer to reality Gov. Pat McCrory's proposal for business recruiting and marketing.

The House and Senate backed proposals that lay out terms of the state Commerce Department's contract with the nonprofit Economic Development Partnership of North Carolina.

Lawmakers authorized McCrory's administration last year to plan a privatization strategy. The corporation, which has been formed and has named an executive director, would hire employees to take over agency functions to attract and retain businesses in the state, encourage international trade and promote the state's brand and tourism. More here.

Four things Birmingham can do to win more economic development projects

Reporter- Birmingham Business Journal
Birmingham isn't creating jobs at the same pace as its regional rivals.

And, although Alabama metros like Huntsville and Mobile have each recently been awarded mega projects like Remington Arms and Airbus, those huge economic development wins have proven elusive for Birmingham.

How can Birmingham change that? That was a question we put to site selectors – consultants often tasked with exploring and scout sites for corporate expansions and relocations – for this week's cover story, "Where is Birmingham's big win?"

Some factors simply can't be changed. Birmingham doesn't have a seaport like Mobile. It doesn't have defense and aerospace assets like Huntsville's Redstone Arsenal or NASA operations. Selectors also noted that Birmingham's hilly topography has made it challenging to connect prospective industrial sites with coveted rail access – an issue that has eliminated it from contention for many projects. More here.

City Council sends letter to Walmart, telling it to stay away from New York

Staff New York Business Journal

Walmart has long viewed New York City as a prime target for future expansion, but has faced opposition from numerous elements, particularly unions and Democratic politicians. As recently as March 2013, the company faced such staunch resistance it said it would hit the brakes and slow down its efforts to establish a beachhead within the five boroughs.

Now, however, New York City Council members believe Walmart (NYSE: WMT) is trying to buy its way into the market through charitable donations, according to a report by the New York Post. More than half of the council's members put their names to a self-described "cease-and-desist" letter accusing the company of trying to buy influence and support by donating at least $4 million, total, to several area charities, the report said. The Post noted that Walmart's owners, the Walton family, have also provided millions of dollars in funding for charter schools through the Walton Family Foundation, some of which are in New York, and that also represents a key political fault between the retailer and the city's established politicians in power.

The flap comes as a recent study by an activist group explicitly opposed to Walmart indicated the Waltons have given a tiny amount of their personal wealth to the Walton Family Foundation. As described by Gawker, the group Walmart 1 Percent calculated that the Walton heirs have amassed a total of $140 billion in personal wealth, but over the past 23 years have donated about $58.49 million to their own foundation, or 0.04 percent of their net worth.

California enters race for Tesla 'Gigafactory'

Staff Writer- Sacramento Business Journal
California lawmakers and the Brown administration introduced legislation Thursday morning that seeks to lift regulatory and financial barriers to lure a proposed $5 billion Tesla Motors factory to the Golden State.

The legislation by Senate President Pro Tem Darrell Steinberg, a Sacramento Democrat, and Sen. Ted Gaines, a Roseville Republican, takes a two-pronged approach by committing the state to offer a mix of financial incentives as well as easing “regulatory and environmental processes” in order to locate a large battery factory. More here.