By SHANNON BEHNKEN
sbehnken@tampatrib.com
Published: October 23, 2009
TAMPA - The Greater Tampa Chamber of Commerce and its economic development arm, the Committee of One Hundred, are splitting up. The separation, both groups say, will make them stronger.
The chamber won't be hindered in taking stands on public policy issues because it no longer will receive public money. The committee will be able to focus exclusively on attracting jobs and industry to the Tampa area.
"Operating as two separate entities will allow each organization to function at its highest level," Henry Gonzalez III, chairman of the chamber, said in a written statement. "It will provide the chamber with greater autonomy and a stronger voice on public policy issues, and we will continue to focus on workforce development, small business, and leadership programs to strengthen the economic prosperity of Hillsborough County."
The Committee of One Hundred, rebranded the Tampa Hillsborough Economic Development Corp., will focus on job creation, business retention, recruiting companies and growing business sectors such as life sciences, international trade and financial services.
It will be operated autonomously from the chamber. The development corporation will be launched with projected revenue in excess of $1.3 million, including $288,000 from Tampa, $450,000 from Hillsborough County and funding from about 100 private companies.
The timing of the restructuring, the groups say, was tied to new budget years of the two local governments.
"We will serve both public and private sector investors who want their funding aimed specifically at competing for jobs in a global economy and selecting sites for target industries within Hillsborough County," said Mark House, chairman of the new corporation.
House said he wants to focus on jobs in the medical, biotechnology and financial services sectors.
Friday, October 23, 2009
Tuesday, October 20, 2009
Lee County rebrands economic development
It's Fort Myers Regional Partnership
BY LAURA RUANE • lruane@news-press.com
The drive to diversify Lee County's economy is working, and soon will fly under a new flag: the Fort Myers Regional Partnership.
"Where's Lee County? It's in Florida, Virginia, Georgia - it's all over," said Jim Moore, county economic development director.
Fort Myers is the name more people living outside the region recognize, Moore said. He touched on economic development rebranding during his talk Thursday at the monthly luncheon meeting of the Greater Fort Myers Chamber of Commerce.
About 115 business people attended the luncheon meeting at Crowne Plaza in south Fort Myers.
In the city of Cape Coral, the new brand initially drew concern, said Mike Quaintance, president of the Cape Coral chamber. After several meetings between city business and community leaders, Quaintance said most people find it "difficult to argue with the logic."
"Name recognition for Fort Myers, obviously, is greater than it is for Cape Coral," Quaintance said. "Once we get (new businesses) here, we'll sort things out."
Quaintance noted a similar development occurred in the county's lifeblood tourism industry. Since 2003, the destination previously marketed as the obscure "Lee Island Coast" has been "The Beaches of Fort Myers & Sanibel" in county bed tax-supported advertisements and promotions.
Tourism promoters showed studies supporting their contention that those two communities had superior name recognition with potential visitors in America and abroad.
Jennifer Berg, spokeswoman for the Lee County Economic Development Office, said the office will be rolling out the new brand over the next several months and the branding will include a listing of other Lee cities in a smaller typeface.
The economic office hired Atlas Advertising of Denver to conduct local and national research about the Lee brand - and has spent about $50,000 with Atlas for research and brand development, Berg said.
At the chamber meeting, Moore also ticked off the major signs that economic development incentives - including the county's $25 million fund - are working. These include contracts with five companies for expansion or relocation that will create about 800 jobs over the next five years.
"The economic benefits are estimated at $365 million," Moore said, adding "there are other opportunities in the pipeline."
He estimated there are 40 or more prospects in that pipeline, and that about 10 companies being wooed could reach a decision within the next 12 months.
BY LAURA RUANE • lruane@news-press.com
The drive to diversify Lee County's economy is working, and soon will fly under a new flag: the Fort Myers Regional Partnership.
"Where's Lee County? It's in Florida, Virginia, Georgia - it's all over," said Jim Moore, county economic development director.
Fort Myers is the name more people living outside the region recognize, Moore said. He touched on economic development rebranding during his talk Thursday at the monthly luncheon meeting of the Greater Fort Myers Chamber of Commerce.
About 115 business people attended the luncheon meeting at Crowne Plaza in south Fort Myers.
In the city of Cape Coral, the new brand initially drew concern, said Mike Quaintance, president of the Cape Coral chamber. After several meetings between city business and community leaders, Quaintance said most people find it "difficult to argue with the logic."
"Name recognition for Fort Myers, obviously, is greater than it is for Cape Coral," Quaintance said. "Once we get (new businesses) here, we'll sort things out."
Quaintance noted a similar development occurred in the county's lifeblood tourism industry. Since 2003, the destination previously marketed as the obscure "Lee Island Coast" has been "The Beaches of Fort Myers & Sanibel" in county bed tax-supported advertisements and promotions.
Tourism promoters showed studies supporting their contention that those two communities had superior name recognition with potential visitors in America and abroad.
Jennifer Berg, spokeswoman for the Lee County Economic Development Office, said the office will be rolling out the new brand over the next several months and the branding will include a listing of other Lee cities in a smaller typeface.
The economic office hired Atlas Advertising of Denver to conduct local and national research about the Lee brand - and has spent about $50,000 with Atlas for research and brand development, Berg said.
At the chamber meeting, Moore also ticked off the major signs that economic development incentives - including the county's $25 million fund - are working. These include contracts with five companies for expansion or relocation that will create about 800 jobs over the next five years.
"The economic benefits are estimated at $365 million," Moore said, adding "there are other opportunities in the pipeline."
He estimated there are 40 or more prospects in that pipeline, and that about 10 companies being wooed could reach a decision within the next 12 months.
Monday, October 19, 2009
Tucson expanding on success
Debra Gruszecki
The Desert Sun
It's a city that has left the “call center” mentality of economic development in the dust.
Greater Tucson kicked off its regional blueprint plan just a few years ago, and already it's gotten so much traction that Tucson Regional Economic Opportunities Inc. is preparing to join forces with Flagstaff and Phoenix to create a “pyramid of power” to push the envelope.
Why?
Greater Tucson's blueprint strategy has had proven results.
Laura Shaw, senior vice president of marketing for TREO, said “Tucson: Job One,” convinced Mexico-based La Costeña to locate its U.S. headquarters there.
The region's proximity to rail, highway and air transportation and the region's united front made it a logistically attractive spot.
It's worked with 41 companies looking to expand or relocate in the region. Among them: Solon, SE, Schletter Inc., Prism Solar, General Plasma Inc., and Global Solar, Target.com Fulfillment Center, Stanley Inc. and Texas Instruments.
“The decision to locate in the greater Tucson region allows us to greatly improve our production and distribution efficiencies in order to serve the U.S. market and future customers,'' said Santiago Castro, chief executive of Arizona Canning/La Costeña.
“This facility not only serves our current needs but allows us room to grow; its proximity to rail, highway and air transportation is an attractive feature.”
Greater Tucson lists for its blueprint-related economic impact:
• New direct and indirect jobs: 8,402
• Capital investment from new companies and expansions: $347 million
• Economic impact: $1 billion
“What we've seen since the blueprint launched, and we track it very carefully, is that more and more of our wins are related to the target industries,'' Shaw said. “We're seeing results.”
Sixty-three percent of all successful TREO projects in the fiscal year ending in June were in the target zone, Shaw said, with 50 percent of the new jobs landing within the targeted industries.
TREO's position paper quotes a corporate executive who says Target.com could have picked California, but didn't, and it claims a 14 percent increase in the number of private sector investors.
The paper also highlights a $50million National Science Foundation grant a University of Arizona-led team at the BIO5 Institute landed to create a global center and cyber infrastructure to “change the way” plant, computer and information scientists think and work.
The five-year project, called iPlant Collaborative, is renewable for a second five years for a total of $100 million.
Startups such as Oro Valley-based Ventana Medical Systems also have gained from venture funding. Its value rose in 2008 when Switzerland-based Roche bought the company and 17.1 acres of land for $8.9million to extend its campus.
Ventana now is the headquarters of the global business unit of Roche that focuses on diagnostics, its CEO Severein Schwan has said. Ventana wants to raise staffing from 750 to more than 1,000.
How plan came about
What does Shaw, as chief marketing strategist for TREO, think about the road map?
“I couldn't do my job without the blueprint,'' she said. “It gives you a framework, a plan. You just institutionalize it and make it work.”
How does it work?
First off, Greater Tucson commissioned a blue-ribbon study. A 46-member steering committee was formed to work with Cincinnati-based KMK Consulting Co., LLC, the firm Greater Tucson hired to prepare the plan. Surveys were conducted and meetings held to tap opinion from 6,000 people and identify 10 clusters to pursue. More.
The Desert Sun
It's a city that has left the “call center” mentality of economic development in the dust.
Greater Tucson kicked off its regional blueprint plan just a few years ago, and already it's gotten so much traction that Tucson Regional Economic Opportunities Inc. is preparing to join forces with Flagstaff and Phoenix to create a “pyramid of power” to push the envelope.
Why?
Greater Tucson's blueprint strategy has had proven results.
Laura Shaw, senior vice president of marketing for TREO, said “Tucson: Job One,” convinced Mexico-based La Costeña to locate its U.S. headquarters there.
The region's proximity to rail, highway and air transportation and the region's united front made it a logistically attractive spot.
It's worked with 41 companies looking to expand or relocate in the region. Among them: Solon, SE, Schletter Inc., Prism Solar, General Plasma Inc., and Global Solar, Target.com Fulfillment Center, Stanley Inc. and Texas Instruments.
“The decision to locate in the greater Tucson region allows us to greatly improve our production and distribution efficiencies in order to serve the U.S. market and future customers,'' said Santiago Castro, chief executive of Arizona Canning/La Costeña.
“This facility not only serves our current needs but allows us room to grow; its proximity to rail, highway and air transportation is an attractive feature.”
Greater Tucson lists for its blueprint-related economic impact:
• New direct and indirect jobs: 8,402
• Capital investment from new companies and expansions: $347 million
• Economic impact: $1 billion
“What we've seen since the blueprint launched, and we track it very carefully, is that more and more of our wins are related to the target industries,'' Shaw said. “We're seeing results.”
Sixty-three percent of all successful TREO projects in the fiscal year ending in June were in the target zone, Shaw said, with 50 percent of the new jobs landing within the targeted industries.
TREO's position paper quotes a corporate executive who says Target.com could have picked California, but didn't, and it claims a 14 percent increase in the number of private sector investors.
The paper also highlights a $50million National Science Foundation grant a University of Arizona-led team at the BIO5 Institute landed to create a global center and cyber infrastructure to “change the way” plant, computer and information scientists think and work.
The five-year project, called iPlant Collaborative, is renewable for a second five years for a total of $100 million.
Startups such as Oro Valley-based Ventana Medical Systems also have gained from venture funding. Its value rose in 2008 when Switzerland-based Roche bought the company and 17.1 acres of land for $8.9million to extend its campus.
Ventana now is the headquarters of the global business unit of Roche that focuses on diagnostics, its CEO Severein Schwan has said. Ventana wants to raise staffing from 750 to more than 1,000.
How plan came about
What does Shaw, as chief marketing strategist for TREO, think about the road map?
“I couldn't do my job without the blueprint,'' she said. “It gives you a framework, a plan. You just institutionalize it and make it work.”
How does it work?
First off, Greater Tucson commissioned a blue-ribbon study. A 46-member steering committee was formed to work with Cincinnati-based KMK Consulting Co., LLC, the firm Greater Tucson hired to prepare the plan. Surveys were conducted and meetings held to tap opinion from 6,000 people and identify 10 clusters to pursue. More.
Dell proves high cost of tax giveaways
By LOREN STEFFY Copyright 2009 Houston Chronicle
Remember Winston-Salem.
That should be the new rallying cry every time a politician starts talking about the need for tax breaks or other incentives to lure jobs.
This month, Round Rock-based Dell announced plans to close its factory in the North Carolina city by January, less than five years after it opened. In the process, it's eliminating about 900 jobs as it cuts costs by shifting manufacturing overseas.
In wooing the plant, North Carolina officials offered Dell more than $240 million in tax breaks over 15 years, touting the possibility that the plant could someday employ 8,000.
Instead, the soon-to-be-shuttered factory stands as a monument to the dangers of overzealous economic development, when local governments give away revenue in exchange for the long-term promises of jobs that can't be kept.
“This is just another example of the risk that a state and local government is taking when it gives a tax break,” said Bernard Weinstein, an economist at Southern Methodist University and a longtime critic of such tax abatement programs. “It makes no sense in economics, but I do understand the politics. Politicians want to be seen as delivering jobs to their communities.”
The process has become institutionalized, with legions of consultants that herald every corporate relocation, bidding one city against another.
“It really becomes a game of who can give away the most,” Weinstein said.
The game becomes an economic trap. Governments give away tax revenue to attract jobs, even as those jobs increase demand for services, which requires additional tax revenue.
“This game is actually getting more competitive every year, particularly in a period of economic downturn,” Weinstein said.
A study two years ago by the North Carolina Justice Center found that the state overpaid for the Dell factory, offering far more than the $37 million rival bid from Virginia.
More important, though, numerous studies have found that such offers have little effect on corporate relocations. Of all the things companies consider, taxes are far down on the list.
“In most instances a company does not make a locational decision based on the level of local taxes,” Weinstein said.
Even if they do, companies can't possibly promise to hire over such a long period. No one can accurately forecast the economy or a company's growth that far out.
Local governments have tried to enact “claw-back” provisions requiring that companies repay part of the giveaway if they fall short of the job goals. The Texas Enterprise Fund, the deal-closing pool distributed by the governor, uses such clauses, and some of its biggest grants may be subject to them, but it's unclear whether the state will actually collect.
In Dell's case, North Carolina has said it will ask the company to repay it $8.5 million, and Winston-Salem has said Dell will pay the city $15.6 million.
In announcing the closing, a Dell official said the company would honor its agreement with the city, county and state.
By my rough calculation, though, Dell's still ahead by more than $50 million, tax revenue that should have been collected from the factory during the past five years.
I asked Weinstein how to break this giveaway. The best way, he said, was for the federal government to declare it will hold back a dollar of federal aid for every dollar of tax revenue state or local governments abate for businesses.
But the feds have no incentive to do that. Local and state tax breaks actually increase the federal tax liability for businesses by lowering their deduction for local taxes. So blocking local tax abatements would reduce federal tax revenue.
The tax giveaway game has become insidious, but it's a game that neither taxpayers nor governments win.
Lest we forget that, we should remember Winston-Salem.
Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.
Remember Winston-Salem.
That should be the new rallying cry every time a politician starts talking about the need for tax breaks or other incentives to lure jobs.
This month, Round Rock-based Dell announced plans to close its factory in the North Carolina city by January, less than five years after it opened. In the process, it's eliminating about 900 jobs as it cuts costs by shifting manufacturing overseas.
In wooing the plant, North Carolina officials offered Dell more than $240 million in tax breaks over 15 years, touting the possibility that the plant could someday employ 8,000.
Instead, the soon-to-be-shuttered factory stands as a monument to the dangers of overzealous economic development, when local governments give away revenue in exchange for the long-term promises of jobs that can't be kept.
“This is just another example of the risk that a state and local government is taking when it gives a tax break,” said Bernard Weinstein, an economist at Southern Methodist University and a longtime critic of such tax abatement programs. “It makes no sense in economics, but I do understand the politics. Politicians want to be seen as delivering jobs to their communities.”
The process has become institutionalized, with legions of consultants that herald every corporate relocation, bidding one city against another.
“It really becomes a game of who can give away the most,” Weinstein said.
The game becomes an economic trap. Governments give away tax revenue to attract jobs, even as those jobs increase demand for services, which requires additional tax revenue.
“This game is actually getting more competitive every year, particularly in a period of economic downturn,” Weinstein said.
A study two years ago by the North Carolina Justice Center found that the state overpaid for the Dell factory, offering far more than the $37 million rival bid from Virginia.
More important, though, numerous studies have found that such offers have little effect on corporate relocations. Of all the things companies consider, taxes are far down on the list.
“In most instances a company does not make a locational decision based on the level of local taxes,” Weinstein said.
Even if they do, companies can't possibly promise to hire over such a long period. No one can accurately forecast the economy or a company's growth that far out.
Local governments have tried to enact “claw-back” provisions requiring that companies repay part of the giveaway if they fall short of the job goals. The Texas Enterprise Fund, the deal-closing pool distributed by the governor, uses such clauses, and some of its biggest grants may be subject to them, but it's unclear whether the state will actually collect.
In Dell's case, North Carolina has said it will ask the company to repay it $8.5 million, and Winston-Salem has said Dell will pay the city $15.6 million.
In announcing the closing, a Dell official said the company would honor its agreement with the city, county and state.
By my rough calculation, though, Dell's still ahead by more than $50 million, tax revenue that should have been collected from the factory during the past five years.
I asked Weinstein how to break this giveaway. The best way, he said, was for the federal government to declare it will hold back a dollar of federal aid for every dollar of tax revenue state or local governments abate for businesses.
But the feds have no incentive to do that. Local and state tax breaks actually increase the federal tax liability for businesses by lowering their deduction for local taxes. So blocking local tax abatements would reduce federal tax revenue.
The tax giveaway game has become insidious, but it's a game that neither taxpayers nor governments win.
Lest we forget that, we should remember Winston-Salem.
Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.
Thursday, October 15, 2009
Economic Development Strategy Leverages Knoxville-Oak Ridge Innovation Valley Assets
KNOXVILLE, Tenn., Oct. 15 /PRNewswire-USNewswire/ -- Already a hotbed of research, the Knoxville-Oak Ridge Innovation Valley has a new roadmap for turning those technological and human assets into a prosperous future. The strategy identifies four promising industry sectors:
-- instrumentation
-- nuclear energy
-- bioenergy
-- energy-related materials.
Developed by Innovation Valley officials and consultants from the Battelle Technology Partnership Practice, these four high tech areas utilize the high tech resources of Oak Ridge National Laboratory, Y-12 National Security Complex, the University of Tennessee , and partnerships and initiatives across the Innovation Valley, and reflect current national business trends.
"Our focus at Oak Ridge National Laboratory is to deliver the kind of science that will be the foundation for economic growth in the years ahead," said ORNL Director Thom Mason, who also chairs Innovation Valley. "This roadmap will allow our region to benefit from the technology assets we have and further strengthens the linkage between economic development priorities and the research direction for ORNL."
Instrumentation
Instrumentation, the branch of engineering that deals with measurement and control, Jesse Smith, Director of Technology, Innovation Valley Consortium, said, "is a big part of the Innovation Valley's history - stemming from the Manhattan Project and TVA, and carrying on today with such innovative companies as NucSafe and Siemens (formerly CTI)."
Especially promising new fields for instrumentation exist in energy, environment, biosciences and homeland security.
Innovation Valley assets in this sector include business space at ORNL's Science and Technology Park, prototyping capabilities at the National Prototype Center at the Y-12 facility and the national lab's decades-long expertise in instrumentation.
Nuclear energy
"There's a lot of talk about the 'nuclear renaissance,'" Smith said, "We have the engineering, testing and measurement capabilities and extensive education and training programs in place to be a major player."
The Innovation Valley, he says, can design, test and build replacement parts for the nation's aging fleet of nuclear reactors.
"And if more plants are built, we are in an even stronger position," Smith said.
Key strengths of ORNL and B&W Y-12 are in nuclear-related materials, fuel cycle and next-generation reactor systems. UT possesses primary strength in instruments and controls, plus fuel cell management and radiation detection.
Bioenergy
Bioenergy, which now ranks second only to hydropower in renewable U.S. primary energy production, is big news in the Innovation Valley. Construction is well underway on a major cellulosic ethanol pilot production facility in nearby Vonore that will convert switchgrass into "grassoline." The facility, part of Governor Phil Bredesen's Tennessee Biofuels Initiative, will be run by Genera Energy, a non-profit arm of the University of Tennessee. Biofuels from non-food crops such as switchgrass represent a growth area at the Department of Energy's BioEnergy Science Center at ORNL.
Research assets in this industry are UT's agricultural focus, ORNL's strengths in microbiology and the region's chemical engineering expertise.
Energy-related materials
The Innovation Valley is heavily involved in the development of next-generation batteries, lightweight materials, thin film and silicon for solar panels. Many of these materials increase energy efficiencies and reduce costs involved in solar electricity.
Materials research resources at ORNL include the Department of Energy's Spallation Neutron Source -- the world's most powerful neutron source for materials research -- and the new UT-Battelle Joint Institute for Advanced Materials Science.
Recent announcements such as the Tennessee Solar Initiative and $1 billion investments in Tennessee by chemical giants Wacker Chemie and Hemlock Semiconductor show further progress. Both plants will produce polycrystalline silicon for solar panels.
Volkswagen's new mega facility near Chattanooga also creates opportunities in next-generation automotive materials.
SOURCE Knoxville-Oak Ridge Innovation Valley
-- instrumentation
-- nuclear energy
-- bioenergy
-- energy-related materials.
Developed by Innovation Valley officials and consultants from the Battelle Technology Partnership Practice, these four high tech areas utilize the high tech resources of Oak Ridge National Laboratory, Y-12 National Security Complex, the University of Tennessee , and partnerships and initiatives across the Innovation Valley, and reflect current national business trends.
"Our focus at Oak Ridge National Laboratory is to deliver the kind of science that will be the foundation for economic growth in the years ahead," said ORNL Director Thom Mason, who also chairs Innovation Valley. "This roadmap will allow our region to benefit from the technology assets we have and further strengthens the linkage between economic development priorities and the research direction for ORNL."
Instrumentation
Instrumentation, the branch of engineering that deals with measurement and control, Jesse Smith, Director of Technology, Innovation Valley Consortium, said, "is a big part of the Innovation Valley's history - stemming from the Manhattan Project and TVA, and carrying on today with such innovative companies as NucSafe and Siemens (formerly CTI)."
Especially promising new fields for instrumentation exist in energy, environment, biosciences and homeland security.
Innovation Valley assets in this sector include business space at ORNL's Science and Technology Park, prototyping capabilities at the National Prototype Center at the Y-12 facility and the national lab's decades-long expertise in instrumentation.
Nuclear energy
"There's a lot of talk about the 'nuclear renaissance,'" Smith said, "We have the engineering, testing and measurement capabilities and extensive education and training programs in place to be a major player."
The Innovation Valley, he says, can design, test and build replacement parts for the nation's aging fleet of nuclear reactors.
"And if more plants are built, we are in an even stronger position," Smith said.
Key strengths of ORNL and B&W Y-12 are in nuclear-related materials, fuel cycle and next-generation reactor systems. UT possesses primary strength in instruments and controls, plus fuel cell management and radiation detection.
Bioenergy
Bioenergy, which now ranks second only to hydropower in renewable U.S. primary energy production, is big news in the Innovation Valley. Construction is well underway on a major cellulosic ethanol pilot production facility in nearby Vonore that will convert switchgrass into "grassoline." The facility, part of Governor Phil Bredesen's Tennessee Biofuels Initiative, will be run by Genera Energy, a non-profit arm of the University of Tennessee. Biofuels from non-food crops such as switchgrass represent a growth area at the Department of Energy's BioEnergy Science Center at ORNL.
Research assets in this industry are UT's agricultural focus, ORNL's strengths in microbiology and the region's chemical engineering expertise.
Energy-related materials
The Innovation Valley is heavily involved in the development of next-generation batteries, lightweight materials, thin film and silicon for solar panels. Many of these materials increase energy efficiencies and reduce costs involved in solar electricity.
Materials research resources at ORNL include the Department of Energy's Spallation Neutron Source -- the world's most powerful neutron source for materials research -- and the new UT-Battelle Joint Institute for Advanced Materials Science.
Recent announcements such as the Tennessee Solar Initiative and $1 billion investments in Tennessee by chemical giants Wacker Chemie and Hemlock Semiconductor show further progress. Both plants will produce polycrystalline silicon for solar panels.
Volkswagen's new mega facility near Chattanooga also creates opportunities in next-generation automotive materials.
SOURCE Knoxville-Oak Ridge Innovation Valley
Tuesday, October 13, 2009
Study plugs arts, culture to attract businesses, keep workers
Barbara Wieland
bwieland@lsj.com
A stronger arts and culture community in mid-Michigan would help attract business and retain workers in the area, according to a study set to be released today.
The development plan, a joint effort between the cities of Lansing and East Lansing, Michigan State University and the Arts Council of Greater Lansing, will identify ways the four entities can work together to nurture the growth of the Lansing area's creative sector.
Plan to be introduced
The "cultural economic development plan" will be introduced to the public at 7 p.m. at the Hannah Community Center in East Lansing.
"The cities and MSU have realized the importance of arts and culture and how important arts and culture are in creating a sense of place," said Leslie Donaldson, executive director of the Arts Council of Greater Lansing.
Marchelle Smith, special projects director for Lansing Economic Development Corp., said the study suggests projects that the cities, university and council can work on together.
For example, they may create a centralized Web site for ticket purchases at multiple venues in the area.
'Creative workers'
The plan doesn't anticipate how many jobs might be created, or what it will cost to accomplish some of its suggested goals.
According to the study, more than 9 percent of the area's work force held jobs in the creative sector in 2006.
Those jobs include graphic designers, performing artists and people involved in video or sound production.
The businesses that employ those workers often contribute to the quality of life in an area, Smith said.
"In order to attract executives and CEOs ... it's very important that we have creative workers here and a sense of play."
bwieland@lsj.com
A stronger arts and culture community in mid-Michigan would help attract business and retain workers in the area, according to a study set to be released today.
The development plan, a joint effort between the cities of Lansing and East Lansing, Michigan State University and the Arts Council of Greater Lansing, will identify ways the four entities can work together to nurture the growth of the Lansing area's creative sector.
Plan to be introduced
The "cultural economic development plan" will be introduced to the public at 7 p.m. at the Hannah Community Center in East Lansing.
"The cities and MSU have realized the importance of arts and culture and how important arts and culture are in creating a sense of place," said Leslie Donaldson, executive director of the Arts Council of Greater Lansing.
Marchelle Smith, special projects director for Lansing Economic Development Corp., said the study suggests projects that the cities, university and council can work on together.
For example, they may create a centralized Web site for ticket purchases at multiple venues in the area.
'Creative workers'
The plan doesn't anticipate how many jobs might be created, or what it will cost to accomplish some of its suggested goals.
According to the study, more than 9 percent of the area's work force held jobs in the creative sector in 2006.
Those jobs include graphic designers, performing artists and people involved in video or sound production.
The businesses that employ those workers often contribute to the quality of life in an area, Smith said.
"In order to attract executives and CEOs ... it's very important that we have creative workers here and a sense of play."
Monday, October 12, 2009
Company facing investigation over Lawrence infomercial
By Bill Kirk
bkirk@eagletribune.com
LAWRENCE — A controversial informercial paid for by the city is now being eyed as part of an ongoing investigation into the Florida company which produced it.
Known variously as Encore Television Group or Platinum Television Group, the company was paid $19,700 by the city to appear in "The Economic Report," a five-minute informercial hosted by Greg Gumbel. Under the agreement, the Lawrence ad would air 20 times across the country.
But two years ago, the Florida Attorney General's office cited the company for failing to deliver on its promise to put other similar informercials on the air and for making questionable claims linking these ads to major networks like CNN, Headline News and the Discovery Channel.
Since that time, the company has been operating under what's called an "Assurance of Voluntary Compliance (AVC)." The compliance order is short of an admission of guilt but spells out how the company is supposed to conduct its business in order to comply with state and federal statutes.
In all, the company paid $350,000 to the Attorney General's office as a result of the investigation and agreement, including $75,000 in restitution to the companies involved, $100,000 to the state of Florida for investigative costs, and another $175,000 for costs associated with ongoing and future enforcement initiatives.
With the controversy in Lawrence and Gumbel now suing the company — he claims he was told he would be doing introductions for legitimate news shows — the Florida Attorney General's office is taking another look at Encore.
"We are looking at potential violations of the (Assurance of Voluntary Compliance) and are not able to give a legal opinion about whether something is definitively a violation until our review has been completed," according to a statement.
Officials at the company could not be reached for comment. The company's attorney declined to comment.
While Mayor Michael Sullivan and Economic Development Director Tom Schiavone stand by the $19,700 purchase, saying it's a valuable marketing tool that will give the city positive recognition, more controversy is arising.
A CNN spokesperson told The Eagle-Tribune they are again concerned about the association with "The Economic Report" and the network. Comcast is also questioning information Encore provides on its Web site about when the show supposedly airs.
And in Lawrence, City Council President Patrick Blanchette is looking at how this ad was paid for. Schiavone, who could not be reached for comment on this story, previously said it was paid for out of a budget the city has for marketing.
"The city has been in a fiscal crisis for some time, and I can't fathom the mayor and his acting economic development director issuing payment for a self-controlled commercial," Blanchette said. "I would like to see what account this money came out of and when it was paid. I would like to see all the sign-offs on this payment and agreement."
Schiavone said the money was spent on "production fees." One local videographer says the cost of such an ad is exorbitant.
"A five-minute video like that, I could do myself for $4,000 to $5,000," said Brian Norton of New Creations Video Productions in Nashua, N.H. "I wish I could get $20,000 for a video like that."
Norton, who has been in the business nearly 13 years, produces wedding and corporate videos.
"I don't know why they hired a Florida company when they could have used a local one," he said.
What about Lawrence?
The Eagle-Tribune confirmed through Comcast that the Lawrence infomercial appeared four times Portland, Ore., on Sunday, July 5, at 9:24 a.m., 9:54 a.m., 10:24 a.m. and 10:54 a.m.
"They said it would run 20 times in different markets," Schiavone said in an earlier interview. "They buy up the space, give us five or 10 days heads-up that they purchased the space, and that it will be running in that market."
Raxon Phoenix, the company contact given to Lawrence, told The Eagle-Tribune the ad has also run in Sarasota and Venice Beach, Fla. In an e-mail she sent to Lawrence, she lists her title as Traffic/Post Production Coordinator, presumably for Encore Television. Phoenix is also the author of a self-published book of erotic poetry, "Confessions of the Soul."
"There have been no further notifications," she said, referring to e-mails to Lawrence about when the ad will run again. "We are in the scheduling phase for the month of October."
An Internet search for the contact number Phoenix gave to this city results in several online bulletin boards with posters questioning the legitimacy of the services the company offers.
A Web site for "The Economic Report" has a listing of other air times indicating when and where the program is scheduled to run in local markets. According to the Web site, in Boston, "The Economic Report" infomercial — not necessarily the episode about Lawrence — was supposed to have run 21 times in different time slots on CNN Headline News from Oct. 1 through 4.
Comcast spokesman Marc Goodman said that is not true.
"This show has not appeared at all in the local market," he said, adding that it would never run on CNN Headline News anyway.
Chris Ellis, a spokesman for Spotlight, the advertising arm of Comcast, said he would be looking into claims on the infomercial's Web site that it was running in the Boston market.
Is it news or an ad?
While city officials were telling people, including The Eagle-Tribune, that the show was a program that "would appear on" CNN Headline News, among others, it is unclear exactly what Encore may have said to city officials.
But according to the company's own Web site, it looks like Encore/Platinum is trying very hard to make people think there is some kind of link between their videos and networks like CNN.
"The show airs during the day on a variety of well-known news networks," says the company's home page. The phrase "well-known news networks" is a link to another page on their Web site titled "Media Distribution." On that page there is a list of networks, with summaries about each one, including Discovery Channel, CNN Headline News, CNN and MSNBC.
According to the 2007 agreement with the Florida Attorney General, Platinum TV Group or Encore "shall not represent themselves to be any national news, cable or broadcast network, nor shall (they) represent that they are 'associated' with any such network."
The site, does have a disclaimer saying, in smaller, light-gray type: "'The Economic Report' and its national television show has no direct affiliation with the networks on which they air. 'The Economic Report' purchases the time through cable providers, networks, stations and/or other media sellers."
A spokeswoman for CNN, a national 24-hour news network, said categorically there is no link between the news channel and Encore or Platinum.
"CNN has no relationship with the advertiser," said Janine Iamunno of CNN Public Relations this week. "We are investigating the matter further with regard to misrepresentation of CNN and its relationship to these local advertisers, and will take appropriate action based upon our investigation."
Sullivan and Schiavone have said they knew it was an informercial. They said they also knew that the company making the video had to buy advertising time so that the infomercial could air on various cable stations around the country.
That information was not shared with too many other people.
Two of the interview subjects, restaurateur and real estate developer Sal Lupoli and Merrimack Valley Chamber of Commerce president Joe Bevilacqua, both said they were under the impression that the news crew that interviewed them was with CNN and that the show would be run as part of a CNN program called "The Economic Report."
bkirk@eagletribune.com
LAWRENCE — A controversial informercial paid for by the city is now being eyed as part of an ongoing investigation into the Florida company which produced it.
Known variously as Encore Television Group or Platinum Television Group, the company was paid $19,700 by the city to appear in "The Economic Report," a five-minute informercial hosted by Greg Gumbel. Under the agreement, the Lawrence ad would air 20 times across the country.
But two years ago, the Florida Attorney General's office cited the company for failing to deliver on its promise to put other similar informercials on the air and for making questionable claims linking these ads to major networks like CNN, Headline News and the Discovery Channel.
Since that time, the company has been operating under what's called an "Assurance of Voluntary Compliance (AVC)." The compliance order is short of an admission of guilt but spells out how the company is supposed to conduct its business in order to comply with state and federal statutes.
In all, the company paid $350,000 to the Attorney General's office as a result of the investigation and agreement, including $75,000 in restitution to the companies involved, $100,000 to the state of Florida for investigative costs, and another $175,000 for costs associated with ongoing and future enforcement initiatives.
With the controversy in Lawrence and Gumbel now suing the company — he claims he was told he would be doing introductions for legitimate news shows — the Florida Attorney General's office is taking another look at Encore.
"We are looking at potential violations of the (Assurance of Voluntary Compliance) and are not able to give a legal opinion about whether something is definitively a violation until our review has been completed," according to a statement.
Officials at the company could not be reached for comment. The company's attorney declined to comment.
While Mayor Michael Sullivan and Economic Development Director Tom Schiavone stand by the $19,700 purchase, saying it's a valuable marketing tool that will give the city positive recognition, more controversy is arising.
A CNN spokesperson told The Eagle-Tribune they are again concerned about the association with "The Economic Report" and the network. Comcast is also questioning information Encore provides on its Web site about when the show supposedly airs.
And in Lawrence, City Council President Patrick Blanchette is looking at how this ad was paid for. Schiavone, who could not be reached for comment on this story, previously said it was paid for out of a budget the city has for marketing.
"The city has been in a fiscal crisis for some time, and I can't fathom the mayor and his acting economic development director issuing payment for a self-controlled commercial," Blanchette said. "I would like to see what account this money came out of and when it was paid. I would like to see all the sign-offs on this payment and agreement."
Schiavone said the money was spent on "production fees." One local videographer says the cost of such an ad is exorbitant.
"A five-minute video like that, I could do myself for $4,000 to $5,000," said Brian Norton of New Creations Video Productions in Nashua, N.H. "I wish I could get $20,000 for a video like that."
Norton, who has been in the business nearly 13 years, produces wedding and corporate videos.
"I don't know why they hired a Florida company when they could have used a local one," he said.
What about Lawrence?
The Eagle-Tribune confirmed through Comcast that the Lawrence infomercial appeared four times Portland, Ore., on Sunday, July 5, at 9:24 a.m., 9:54 a.m., 10:24 a.m. and 10:54 a.m.
"They said it would run 20 times in different markets," Schiavone said in an earlier interview. "They buy up the space, give us five or 10 days heads-up that they purchased the space, and that it will be running in that market."
Raxon Phoenix, the company contact given to Lawrence, told The Eagle-Tribune the ad has also run in Sarasota and Venice Beach, Fla. In an e-mail she sent to Lawrence, she lists her title as Traffic/Post Production Coordinator, presumably for Encore Television. Phoenix is also the author of a self-published book of erotic poetry, "Confessions of the Soul."
"There have been no further notifications," she said, referring to e-mails to Lawrence about when the ad will run again. "We are in the scheduling phase for the month of October."
An Internet search for the contact number Phoenix gave to this city results in several online bulletin boards with posters questioning the legitimacy of the services the company offers.
A Web site for "The Economic Report" has a listing of other air times indicating when and where the program is scheduled to run in local markets. According to the Web site, in Boston, "The Economic Report" infomercial — not necessarily the episode about Lawrence — was supposed to have run 21 times in different time slots on CNN Headline News from Oct. 1 through 4.
Comcast spokesman Marc Goodman said that is not true.
"This show has not appeared at all in the local market," he said, adding that it would never run on CNN Headline News anyway.
Chris Ellis, a spokesman for Spotlight, the advertising arm of Comcast, said he would be looking into claims on the infomercial's Web site that it was running in the Boston market.
Is it news or an ad?
While city officials were telling people, including The Eagle-Tribune, that the show was a program that "would appear on" CNN Headline News, among others, it is unclear exactly what Encore may have said to city officials.
But according to the company's own Web site, it looks like Encore/Platinum is trying very hard to make people think there is some kind of link between their videos and networks like CNN.
"The show airs during the day on a variety of well-known news networks," says the company's home page. The phrase "well-known news networks" is a link to another page on their Web site titled "Media Distribution." On that page there is a list of networks, with summaries about each one, including Discovery Channel, CNN Headline News, CNN and MSNBC.
According to the 2007 agreement with the Florida Attorney General, Platinum TV Group or Encore "shall not represent themselves to be any national news, cable or broadcast network, nor shall (they) represent that they are 'associated' with any such network."
The site, does have a disclaimer saying, in smaller, light-gray type: "'The Economic Report' and its national television show has no direct affiliation with the networks on which they air. 'The Economic Report' purchases the time through cable providers, networks, stations and/or other media sellers."
A spokeswoman for CNN, a national 24-hour news network, said categorically there is no link between the news channel and Encore or Platinum.
"CNN has no relationship with the advertiser," said Janine Iamunno of CNN Public Relations this week. "We are investigating the matter further with regard to misrepresentation of CNN and its relationship to these local advertisers, and will take appropriate action based upon our investigation."
Sullivan and Schiavone have said they knew it was an informercial. They said they also knew that the company making the video had to buy advertising time so that the infomercial could air on various cable stations around the country.
That information was not shared with too many other people.
Two of the interview subjects, restaurateur and real estate developer Sal Lupoli and Merrimack Valley Chamber of Commerce president Joe Bevilacqua, both said they were under the impression that the news crew that interviewed them was with CNN and that the show would be run as part of a CNN program called "The Economic Report."
Sunday, October 11, 2009
Incentives and Dell: Company's plan to leave after less than five years reignites debate on how far government should go to lure private business
By Richard Craver | Journal Reporter
Published: October 11, 2009
The creation of a Dell Inc. plant in Forsyth County put the company and Forsyth County in the national spotlight.
Many groups named the incentives-laden deal as their national economic-development project for 2004.
But just five years later, with the clock ticking on the expected end of desktop production on Jan. 20, the plant is center stage again as 905 mostly blue-collar employees prepare to find new work in a tough job market.
"We expect the plant closing to re-open the debate over the propriety of incentives," said John H. Boyd, the president of The Boyd Co. Inc., a site-selection company in Princeton, N.J. "The Dell project was the poster child of this debate."
Proponents and opponents of incentives both expressed vindication over their stances last week. Proponents cite the clawbacks in the Dell incentive contract as proof that the strategy works.
"If there is a bright side to this, it's the way the contract was structured," said Dave Plyler, the chairman of the Forsyth County commissioners. "The good news is all is not lost. The whole package has to come right back to us."
Opponents, however, charge that Dell's inability or unwillingness to adapt the $115 million plant to its rapidly changing business model -- increased focus on laptops, servers and software -- is a prime example of why elected officials shouldn't use incentives to lure corporations.
The state's incentive package, valued at as much as $267 million over Dell's stay in North Carolina, was offered based in part on projections of 1,700 Dell jobs and from 4,500 to 6,500 indirect jobs being created related to the plant.
The package was also tied to the number of computers the plant churned out.
As it turned out, the peak of employment in Dell's plant was 1,400, including 1,150 Dell personnel and 250 contract employees. No more than 500 indirect jobs were believed to have been created as a result of the plant being here.
"Public officials ought to focus on broad policies that boost the prospects of all businesses, large and small, rather than trying to cut risky side deals with individual, politically favored companies," said John Hood, the president of the John Locke Foundation, a libertarian policy-research group in Raleigh.
"The problem is local governments, other firms, and workers all made costly decisions -- about relocations, services and investments -- based on the assumption that there was a long-term deal with Dell. You can't claw all those costs back, because they aren't in the original contract."
One reason why local and state incentives for Dell drew support was that most analysts felt that there were few better corporate bets in 2004 than the world's top computer-maker.
"Its sales/production model was the envy of all," said Michael Walden, an economics professor at N.C. State University. "It was very logical for North Carolina to want a Dell presence."
Although the trend toward laptops and away from desktops had begun by the time the plant opened in October 2005, Walden said that "very few people predicted the severity of the 2007-09 recession and what it has done to desktop sales."
A major worry is whether the clawbacks will be honored by Dell.
Because Dell is not keeping the plant open for five years, it is obligated in its contract to repay 100 percent of the payments and incentives that it has received from the local community.
It would have had to pay back just 50 percent if the plant stayed open past October 2010.
The local community expects about $26.1 million in paybacks -- $15.5 million to the city of Winston-Salem, $7.9 million to Forsyth County and $2.7 million to the Millennium Fund.
As long as Dell owns the building, it will continue to pay county property taxes. Dell paid about $745,000 in 2008, according to Ed Jones, the deputy county manager. Jones said that the county payback is $6 million for site preparation and $1.9 million for three years of incentive payments.
Local officials expect to request the repayment soon after the plant is closed. Dell is contractually obligated to make the payback within 30 days of the request.
"The agreement is very clear in this regard," Winston-Salem Mayor Allen Joines said. "We do plan on asking for all."
Gov. Bev Perdue has expressed a similar plan for state incentives.
The state has paid out a total of $8.5 million in grants and tax incentives, and expects to get back $1.5 million that it gave to Dell for job creation.
It's not clear if the state will recoup money for its other tax credits and incentives.
Joines said he has received repayment assurances from Kip Thompson, the vice president for facilities of Dell. Some officials point out that Thompson is the same Dell executive who played hardball with state officials in 2004 in negotiating the state incentive package.
"I'm going to decline to speculate at this point as Dell officials will meet with the appropriate governmental entities to review the agreements," David Frink, a spokesman for Dell, said. "Again, we'll continue to comply and honor the terms of agreements in place."
Tony Plath, a finance professor at UNC Charlotte, said that there will be plenty of interested bystanders of any negotiations.
"Everyone over there kept talking about how definitive and ironclad the incentives contract with Dell was, but now we're about to put that assertion to the test," Plath said.
One key missing part of the incentives puzzle is how much will it cost Dell to close the plant, including paying the employees eight to 12 weeks of severance pay and other benefits.
Most companies declare those costs in announcing the closing of a plant or operation to give shareholders a heads-up of a potential charge to earnings. Dell did not do so on Wednesday.
"We include expense items in the quarter in which they are incurred, reporting when we issue our quarterly financial results announcement," Frink said. "We announce our fiscal third quarter on Nov. 19."
N.C. Sen. Pete Brunstetter, D-Forsyth, said he continues to back the use of incentives in recruiting businesses. Brunstetter was one of the architects of the Dell project as chairman of the county commissioners.
"A community needs to continually get out there and compete for business and industry," he said.
Dan Lynch, the president of the Greensboro Economic Development Alliance, said he hopes that the Triad "isn't too hard on ourselves as it relates to Dell's decision to close."
"Winston-Salem and the Triad won the Dell project for all the right reasons -- access to markets, available labor and competitive operating costs," Lynch said. "Our economic-development strategies are sound, and we should not let short-term market fluctuations sidetrack our well-focused industry cluster strategy.
"Education and advanced training will -- and should -- continue to define the Triad," Lynch said. "We continue to invest heavily in our education assets, and that will have the greatest impact over the long term."
rcraver@wsjournal.com
Published: October 11, 2009
The creation of a Dell Inc. plant in Forsyth County put the company and Forsyth County in the national spotlight.
Many groups named the incentives-laden deal as their national economic-development project for 2004.
But just five years later, with the clock ticking on the expected end of desktop production on Jan. 20, the plant is center stage again as 905 mostly blue-collar employees prepare to find new work in a tough job market.
"We expect the plant closing to re-open the debate over the propriety of incentives," said John H. Boyd, the president of The Boyd Co. Inc., a site-selection company in Princeton, N.J. "The Dell project was the poster child of this debate."
Proponents and opponents of incentives both expressed vindication over their stances last week. Proponents cite the clawbacks in the Dell incentive contract as proof that the strategy works.
"If there is a bright side to this, it's the way the contract was structured," said Dave Plyler, the chairman of the Forsyth County commissioners. "The good news is all is not lost. The whole package has to come right back to us."
Opponents, however, charge that Dell's inability or unwillingness to adapt the $115 million plant to its rapidly changing business model -- increased focus on laptops, servers and software -- is a prime example of why elected officials shouldn't use incentives to lure corporations.
The state's incentive package, valued at as much as $267 million over Dell's stay in North Carolina, was offered based in part on projections of 1,700 Dell jobs and from 4,500 to 6,500 indirect jobs being created related to the plant.
The package was also tied to the number of computers the plant churned out.
As it turned out, the peak of employment in Dell's plant was 1,400, including 1,150 Dell personnel and 250 contract employees. No more than 500 indirect jobs were believed to have been created as a result of the plant being here.
"Public officials ought to focus on broad policies that boost the prospects of all businesses, large and small, rather than trying to cut risky side deals with individual, politically favored companies," said John Hood, the president of the John Locke Foundation, a libertarian policy-research group in Raleigh.
"The problem is local governments, other firms, and workers all made costly decisions -- about relocations, services and investments -- based on the assumption that there was a long-term deal with Dell. You can't claw all those costs back, because they aren't in the original contract."
One reason why local and state incentives for Dell drew support was that most analysts felt that there were few better corporate bets in 2004 than the world's top computer-maker.
"Its sales/production model was the envy of all," said Michael Walden, an economics professor at N.C. State University. "It was very logical for North Carolina to want a Dell presence."
Although the trend toward laptops and away from desktops had begun by the time the plant opened in October 2005, Walden said that "very few people predicted the severity of the 2007-09 recession and what it has done to desktop sales."
A major worry is whether the clawbacks will be honored by Dell.
Because Dell is not keeping the plant open for five years, it is obligated in its contract to repay 100 percent of the payments and incentives that it has received from the local community.
It would have had to pay back just 50 percent if the plant stayed open past October 2010.
The local community expects about $26.1 million in paybacks -- $15.5 million to the city of Winston-Salem, $7.9 million to Forsyth County and $2.7 million to the Millennium Fund.
As long as Dell owns the building, it will continue to pay county property taxes. Dell paid about $745,000 in 2008, according to Ed Jones, the deputy county manager. Jones said that the county payback is $6 million for site preparation and $1.9 million for three years of incentive payments.
Local officials expect to request the repayment soon after the plant is closed. Dell is contractually obligated to make the payback within 30 days of the request.
"The agreement is very clear in this regard," Winston-Salem Mayor Allen Joines said. "We do plan on asking for all."
Gov. Bev Perdue has expressed a similar plan for state incentives.
The state has paid out a total of $8.5 million in grants and tax incentives, and expects to get back $1.5 million that it gave to Dell for job creation.
It's not clear if the state will recoup money for its other tax credits and incentives.
Joines said he has received repayment assurances from Kip Thompson, the vice president for facilities of Dell. Some officials point out that Thompson is the same Dell executive who played hardball with state officials in 2004 in negotiating the state incentive package.
"I'm going to decline to speculate at this point as Dell officials will meet with the appropriate governmental entities to review the agreements," David Frink, a spokesman for Dell, said. "Again, we'll continue to comply and honor the terms of agreements in place."
Tony Plath, a finance professor at UNC Charlotte, said that there will be plenty of interested bystanders of any negotiations.
"Everyone over there kept talking about how definitive and ironclad the incentives contract with Dell was, but now we're about to put that assertion to the test," Plath said.
One key missing part of the incentives puzzle is how much will it cost Dell to close the plant, including paying the employees eight to 12 weeks of severance pay and other benefits.
Most companies declare those costs in announcing the closing of a plant or operation to give shareholders a heads-up of a potential charge to earnings. Dell did not do so on Wednesday.
"We include expense items in the quarter in which they are incurred, reporting when we issue our quarterly financial results announcement," Frink said. "We announce our fiscal third quarter on Nov. 19."
N.C. Sen. Pete Brunstetter, D-Forsyth, said he continues to back the use of incentives in recruiting businesses. Brunstetter was one of the architects of the Dell project as chairman of the county commissioners.
"A community needs to continually get out there and compete for business and industry," he said.
Dan Lynch, the president of the Greensboro Economic Development Alliance, said he hopes that the Triad "isn't too hard on ourselves as it relates to Dell's decision to close."
"Winston-Salem and the Triad won the Dell project for all the right reasons -- access to markets, available labor and competitive operating costs," Lynch said. "Our economic-development strategies are sound, and we should not let short-term market fluctuations sidetrack our well-focused industry cluster strategy.
"Education and advanced training will -- and should -- continue to define the Triad," Lynch said. "We continue to invest heavily in our education assets, and that will have the greatest impact over the long term."
rcraver@wsjournal.com
US interstate rivalry hits new lows
By Claire Prentice
New York
It is supposed to be the United States, but the recession has turned America into 50 competing parts.
As the economy bites, states across America are resorting to dirty tactics to steal business from their neighbours.
At stake are business start-ups and well established firms.
US states have always had the power to vary sales and business taxes, but the stalled economy has injected an aggressive new tone as they compete to persuade businesses to relocate and invest with them.
'Nasty tone'
Nevada was accused of stooping to a new low this week with a $1m year-long advertising campaign which mocks California's $26bn budget deficit and uses the slogan, "Keep your business in California and Kiss Your Assets Goodbye".
The Nevada ads compare California legislators to monkeys and the state budget to flying pigs.
"Our campaign has been a big success, we've had a huge response," says Somer Hollingsworth, the president and chief executive of the Nevada Development Authority.
The campaign has sparked a furious row between Nevada and California, which has retaliated with its own multimedia blitz of pro-California ads proclaiming that "What happens in Vegas stays in Vegas, but what happens in California makes the world go 'round".
The advert features world famous California brands like Gap, Apple, Disney, Levi's and Mattel and points out that California boasts 51 Fortune 500 companies, as compared to 2 in Nevada.
California assemblyman Jose Solorio is offended at "the nastiness of the tone" of the adverts promoting Nevada, known as "the Silver State".
"They go too far," he says.
"Why would anyone want to go there anyway? They have very high unemployment, construction has gone bust and there aren't the opportunities there that there are in California."
Mr Solorio's pro-California ads will run on the web and on cable TV in Nevada and California for the next six months.
The assemblyman has also set up a 'California is Golden' website and Facebook group.
Mr Hollingsworth is unapologetic.
"We are very pro-business and California isn't," he says. "That is why people are rushing to leave."
'I win, you lose'
Observers say the move represents a definite change of tack as states use aggressive advertising campaigns to attract new business rather than sitting back and waiting for companies in other states to notice their lower taxes, cheaper office space and less stringent regulations.
"It's a very simple strategy of 'I win, you lose'," says Philip Kotler, professor of marketing at Northwestern University's Kellogg School of Management in Illinois.
The fight is not limited to the Golden and the Silver States.
In New Hampshire, economic development officials drive into Massachusetts to pick up business owners at the border under an initiative dubbed "New Hampshire Open Invitation".
Development officials then give potential investors the full VIP treatment - free luxury hotel accommodation and slap up meals - and drive them around in a limousine while pitching to them about why they should switch state.
"We get a lot of business from Massachusetts," says Michael Bergeron, business development manager for the state of New Hampshire.
"Our neighbours, Vermont, Maine, Massachusetts and Rhode Island are all very high tax states and we have a very low tax burden and a business-friendly environment," he says.
"That's what distinguishes us as a brand."
Dirty play
Development officials in Indiana make similar "sales trips" into Illinois, Ohio and Michigan, and recently placed billboards at the borders of these states, inviting businesses to "Come on IN [the acronym for Indiana] for lower taxes, business and housing costs".
"One third of our new jobs in recent months have come from businesses consolidating and concentrating their business from other states into Indiana," says Indiana secretary of commerce Mitch Roob.
Indiana officials also travel further afield to poach business, to Dallas, New York and Atlanta.
"I don't think it's dirty tactics," says Mr Roob. "It's business. It's the tyranny of the marketplace.
"No state, whether it is California or Indiana, has a God-given right to get business and keep it. We all need to continually update and refine our sales pitch to make our state appealing to great businesses."
There is a danger that the aggressive new marketing tactics could backfire, according to Drew Coburn, director of strategy at New York branding firm Cubism.
"It's stupid from a communications strategy point of view," says Mr Coburn.
"You're wasting your energy on negatives when you should be concentrating on selling the positives of your own brand. You're alerting people across the whole country to the fact you are willing to play dirty and a lot of people will be put off by that."
Positive player
One state that is not willing to do that is New Jersey.
Often the butt of jokes as New York's poorer neighbour, New Jersey officials have turned that perceived cheapness into an asset, stressing the cost-savings of relocating from New York, with its high taxes and rents.
"We aren't criticising anybody," says Jerold Zaro, chief of the New Jersey Office of Economic Growth.
"We are simply telling out story and it is the people on our borders, in New York and Philadelphia, who are listening."
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8273664.stm
Published: 2009/10/04 16:47:23 GMT
© BBC MMIX
New York
It is supposed to be the United States, but the recession has turned America into 50 competing parts.
As the economy bites, states across America are resorting to dirty tactics to steal business from their neighbours.
At stake are business start-ups and well established firms.
US states have always had the power to vary sales and business taxes, but the stalled economy has injected an aggressive new tone as they compete to persuade businesses to relocate and invest with them.
'Nasty tone'
Nevada was accused of stooping to a new low this week with a $1m year-long advertising campaign which mocks California's $26bn budget deficit and uses the slogan, "Keep your business in California and Kiss Your Assets Goodbye".
The Nevada ads compare California legislators to monkeys and the state budget to flying pigs.
"Our campaign has been a big success, we've had a huge response," says Somer Hollingsworth, the president and chief executive of the Nevada Development Authority.
The campaign has sparked a furious row between Nevada and California, which has retaliated with its own multimedia blitz of pro-California ads proclaiming that "What happens in Vegas stays in Vegas, but what happens in California makes the world go 'round".
The advert features world famous California brands like Gap, Apple, Disney, Levi's and Mattel and points out that California boasts 51 Fortune 500 companies, as compared to 2 in Nevada.
California assemblyman Jose Solorio is offended at "the nastiness of the tone" of the adverts promoting Nevada, known as "the Silver State".
"They go too far," he says.
"Why would anyone want to go there anyway? They have very high unemployment, construction has gone bust and there aren't the opportunities there that there are in California."
Mr Solorio's pro-California ads will run on the web and on cable TV in Nevada and California for the next six months.
The assemblyman has also set up a 'California is Golden' website and Facebook group.
Mr Hollingsworth is unapologetic.
"We are very pro-business and California isn't," he says. "That is why people are rushing to leave."
'I win, you lose'
Observers say the move represents a definite change of tack as states use aggressive advertising campaigns to attract new business rather than sitting back and waiting for companies in other states to notice their lower taxes, cheaper office space and less stringent regulations.
"It's a very simple strategy of 'I win, you lose'," says Philip Kotler, professor of marketing at Northwestern University's Kellogg School of Management in Illinois.
The fight is not limited to the Golden and the Silver States.
In New Hampshire, economic development officials drive into Massachusetts to pick up business owners at the border under an initiative dubbed "New Hampshire Open Invitation".
Development officials then give potential investors the full VIP treatment - free luxury hotel accommodation and slap up meals - and drive them around in a limousine while pitching to them about why they should switch state.
"We get a lot of business from Massachusetts," says Michael Bergeron, business development manager for the state of New Hampshire.
"Our neighbours, Vermont, Maine, Massachusetts and Rhode Island are all very high tax states and we have a very low tax burden and a business-friendly environment," he says.
"That's what distinguishes us as a brand."
Dirty play
Development officials in Indiana make similar "sales trips" into Illinois, Ohio and Michigan, and recently placed billboards at the borders of these states, inviting businesses to "Come on IN [the acronym for Indiana] for lower taxes, business and housing costs".
"One third of our new jobs in recent months have come from businesses consolidating and concentrating their business from other states into Indiana," says Indiana secretary of commerce Mitch Roob.
Indiana officials also travel further afield to poach business, to Dallas, New York and Atlanta.
"I don't think it's dirty tactics," says Mr Roob. "It's business. It's the tyranny of the marketplace.
"No state, whether it is California or Indiana, has a God-given right to get business and keep it. We all need to continually update and refine our sales pitch to make our state appealing to great businesses."
There is a danger that the aggressive new marketing tactics could backfire, according to Drew Coburn, director of strategy at New York branding firm Cubism.
"It's stupid from a communications strategy point of view," says Mr Coburn.
"You're wasting your energy on negatives when you should be concentrating on selling the positives of your own brand. You're alerting people across the whole country to the fact you are willing to play dirty and a lot of people will be put off by that."
Positive player
One state that is not willing to do that is New Jersey.
Often the butt of jokes as New York's poorer neighbour, New Jersey officials have turned that perceived cheapness into an asset, stressing the cost-savings of relocating from New York, with its high taxes and rents.
"We aren't criticising anybody," says Jerold Zaro, chief of the New Jersey Office of Economic Growth.
"We are simply telling out story and it is the people on our borders, in New York and Philadelphia, who are listening."
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8273664.stm
Published: 2009/10/04 16:47:23 GMT
© BBC MMIX
Does playing the incentive game work?
By M.J. Ellington
Montgomery Bureau
Published: Sunday, September 20, 2009 at 3:30 a.m.
Critics called Alabama's $253 million incentives package to attract Mercedes in 1993 the granddaddy of economic development boondoggles.
Fifteen years later, economic marketing strategist Andy Levine with DCI, an industrial marketing firm in New York, said landing Mercedes may be the smartest investment any state ever made.
Alabama is now the heart of the new automotive hub in the Southeast.
Alabama Development Office Director Neal Wade said Mercedes "was a game changer" that altered the direction of business and employment in the state forever.
The game change was necessary because the state's economic mainstays - farming and textile manufacturing - could no longer provide the stable jobs Alabama workers needed, Wade said.
"We don't ever want to get to the point again where we depend on one or two types of jobs," Wade said. "We must look for game changers, the megaprojects that will bring in new types of jobs."
Two questions remain, however: Does the search for game changers mean states must offer economic incentives, and is the result worth the investment?
"Absolutely," Wade said. "Right now, it's even more critical to go after projects."
The competition is not just among other Southern states; it became worldwide long ago.
The auto plants - Mercedes in Vance, Toyota in Huntsville, Honda in Lincoln and Hyundai in Montgomery - were the "low-hanging fruit" that brought thousands of other jobs with them, Wade said. Now the state looks to recruit corporate headquarters, robotics and high technology and entertainment companies with new incentives.
As for skeptics who still wonder if high-ticket economic incentives pay off in the long run, Wade said payroll figures alone help explain his support of incentives. The automotive giants that rolled into Alabama beginning with Mercedes paid $5.2 billion to workers in 2007.
Business experts who track the state's growth and economic negotiating strategy agree with Wade.
"We may or may not like this, but it is a reality," said Kerry Gatlin, dean of the college of business at the University of North Alabama. "We live in a competitive world and we must compete. Government plays an important role in establishing ground rules for competition and now in helping direct investments."
Smart incentives evolving
Early in the incentives game, states often offered incentives without requiring companies to live up to promises about jobs projections. Companies then left after getting the tax subsidies.
Sam Addy, director of the Center for Business and Economic Research at the University of Alabama, said states may be smarter about negotiating incentives than in the past. A research economist, Addy said Alabama ties incentives packages to company performance and promises for hiring.
That approach has been particularly evident in the Shoals, where local and state governments were part of an incentive package to lure National Alabama, a railcar manufacturing company.
The company, however, does not receive all incentives until it reaches certain thresholds in construction and hiring.
With the global market struggling for more than a year, railcar manufacturing has been virtually non-existent. Instead of the 1,500 to 1,800 jobs promised at the plant in western Colbert County, there are about 120 workers.
So, most of the promised monetary incentives remain tucked away until the market rebounds for National Alabama.
Worker training and infrastructure improvement such as roads make up two-thirds of state incentives packages, Addy said. The actual cash incentive usually depends on how well a company meets projections for employment and output.
Even if a company recruited with incentives did not make good on its promises, the "roads built would still be there; the employees would be trained," Addy said.
Alabama has been a leader in selling companies on the benefits of allowing the state to help train their employees. It has become a valuable tool in the recruiting process.
The two-year college system and state universities have major roles, Wade said.
"We have to have the kind of education that enables us to be flexible," he said.
Northwest-Shoals Community College in Muscle Shoals, for instance, is a big player in the National Alabama operation, which needs welders. The college brought in needed equipment and is training residents to do the work National Alabama will need.
Diversity stressed
Wade said Alabama must continue to diversify with companies such as Hudson-Alpha Institute for Biotechnology in Huntsville, the growing bio-medical presence in Birmingham and ThyssenKrupp Steel in Mobile County. He named National Alabama as another example.
Wade said he looks at the ripple effect when assessing the value of a project to the state. That includes jobs in real estate, restaurants, retail and service providers.
Wade said a standard multiplier that economic developers use is that for every automotive job brought in through incentives, six or seven other jobs also developed. He said that effect is likely to take place in Colbert and Lauderdale counties near the railcar plant, where underemployment has been a factor.
Cities such as Huntsville, now known for aerospace, defense and biotechnology, are able to recruit based on their own reputation, he said. Cities nearby also benefit, he added. Morgan and Limestone counties in particular see that benefit.
As the state refined skills for negotiating economic incentives, Wade said he always used cost-benefit analysis put in place when Bob Riley became governor in 2002. The analysis looks at the cost of the project, the number of jobs and the projected wages of the work force.
"We basically look at the cash cost to the state to give the governor some idea of how much to offer in incentives," Wade said. "He likes to see a return for the investment in four to five years. You want to protect the taxpayer dollar."
Montgomery Bureau
Published: Sunday, September 20, 2009 at 3:30 a.m.
Critics called Alabama's $253 million incentives package to attract Mercedes in 1993 the granddaddy of economic development boondoggles.
Fifteen years later, economic marketing strategist Andy Levine with DCI, an industrial marketing firm in New York, said landing Mercedes may be the smartest investment any state ever made.
Alabama is now the heart of the new automotive hub in the Southeast.
Alabama Development Office Director Neal Wade said Mercedes "was a game changer" that altered the direction of business and employment in the state forever.
The game change was necessary because the state's economic mainstays - farming and textile manufacturing - could no longer provide the stable jobs Alabama workers needed, Wade said.
"We don't ever want to get to the point again where we depend on one or two types of jobs," Wade said. "We must look for game changers, the megaprojects that will bring in new types of jobs."
Two questions remain, however: Does the search for game changers mean states must offer economic incentives, and is the result worth the investment?
"Absolutely," Wade said. "Right now, it's even more critical to go after projects."
The competition is not just among other Southern states; it became worldwide long ago.
The auto plants - Mercedes in Vance, Toyota in Huntsville, Honda in Lincoln and Hyundai in Montgomery - were the "low-hanging fruit" that brought thousands of other jobs with them, Wade said. Now the state looks to recruit corporate headquarters, robotics and high technology and entertainment companies with new incentives.
As for skeptics who still wonder if high-ticket economic incentives pay off in the long run, Wade said payroll figures alone help explain his support of incentives. The automotive giants that rolled into Alabama beginning with Mercedes paid $5.2 billion to workers in 2007.
Business experts who track the state's growth and economic negotiating strategy agree with Wade.
"We may or may not like this, but it is a reality," said Kerry Gatlin, dean of the college of business at the University of North Alabama. "We live in a competitive world and we must compete. Government plays an important role in establishing ground rules for competition and now in helping direct investments."
Smart incentives evolving
Early in the incentives game, states often offered incentives without requiring companies to live up to promises about jobs projections. Companies then left after getting the tax subsidies.
Sam Addy, director of the Center for Business and Economic Research at the University of Alabama, said states may be smarter about negotiating incentives than in the past. A research economist, Addy said Alabama ties incentives packages to company performance and promises for hiring.
That approach has been particularly evident in the Shoals, where local and state governments were part of an incentive package to lure National Alabama, a railcar manufacturing company.
The company, however, does not receive all incentives until it reaches certain thresholds in construction and hiring.
With the global market struggling for more than a year, railcar manufacturing has been virtually non-existent. Instead of the 1,500 to 1,800 jobs promised at the plant in western Colbert County, there are about 120 workers.
So, most of the promised monetary incentives remain tucked away until the market rebounds for National Alabama.
Worker training and infrastructure improvement such as roads make up two-thirds of state incentives packages, Addy said. The actual cash incentive usually depends on how well a company meets projections for employment and output.
Even if a company recruited with incentives did not make good on its promises, the "roads built would still be there; the employees would be trained," Addy said.
Alabama has been a leader in selling companies on the benefits of allowing the state to help train their employees. It has become a valuable tool in the recruiting process.
The two-year college system and state universities have major roles, Wade said.
"We have to have the kind of education that enables us to be flexible," he said.
Northwest-Shoals Community College in Muscle Shoals, for instance, is a big player in the National Alabama operation, which needs welders. The college brought in needed equipment and is training residents to do the work National Alabama will need.
Diversity stressed
Wade said Alabama must continue to diversify with companies such as Hudson-Alpha Institute for Biotechnology in Huntsville, the growing bio-medical presence in Birmingham and ThyssenKrupp Steel in Mobile County. He named National Alabama as another example.
Wade said he looks at the ripple effect when assessing the value of a project to the state. That includes jobs in real estate, restaurants, retail and service providers.
Wade said a standard multiplier that economic developers use is that for every automotive job brought in through incentives, six or seven other jobs also developed. He said that effect is likely to take place in Colbert and Lauderdale counties near the railcar plant, where underemployment has been a factor.
Cities such as Huntsville, now known for aerospace, defense and biotechnology, are able to recruit based on their own reputation, he said. Cities nearby also benefit, he added. Morgan and Limestone counties in particular see that benefit.
As the state refined skills for negotiating economic incentives, Wade said he always used cost-benefit analysis put in place when Bob Riley became governor in 2002. The analysis looks at the cost of the project, the number of jobs and the projected wages of the work force.
"We basically look at the cash cost to the state to give the governor some idea of how much to offer in incentives," Wade said. "He likes to see a return for the investment in four to five years. You want to protect the taxpayer dollar."
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