BY KATHERINE YUNG
DETROIT FREE PRESS BUSINESS WRITER
The jury is still out on whether Michigan's new economic development strategy will work. But one thing's for certain. The state is making a 180-degree shift from its previous strategy of using billions of dollars in tax breaks and other incentives to jumpstart growth in five key industries.
Under Gov. Rick Snyder, Michigan economic development officials are betting that spending fewer dollars more wisely, helping existing businesses grow and giving many companies a big tax cut will enable the state's economy to flourish.
"It's not necessary to offer ever-increasing incentives in order to be competitive as a state," said Michael Finney, CEO and president of the Michigan Economic Development Corp.
The state is already reducing its reliance on tax breaks. So far this year, Michigan has awarded $62.5 million in MEGA tax credits, which are given to companies that create or retain jobs over a multi-year period. That's just a sliver of the $2.7 billion in MEGA tax credits that were approved last year. Starting in January, these tax breaks will no longer be given out.
Instead, Michigan plans to attract businesses with loans, grants and equity investments. The state has set aside $100 million to do this, but some of this money must also be used to help offset the cost of preserving historic buildings and redeveloping contaminated properties.
Experts who specialize in helping companies find the best locations for new factories or headquarters are divided about whether getting rid of MEGA tax credits is a smart move.
"It's a step in the right direction for Michigan," said Lee Higgins, senior vice president and incentives practice leader for Dallas-based Site Selection Group. "They are being very proactive in doing this, and I applaud them."
But Robert Price, a director at Atlanta-based Herron Consulting who has worked on more than 250 site-selection projects, said "eliminating corporate tax credits does not put Michigan in a good competitive position."
State's new approach draws praise, criticism
Under Gov. Rick Snyder, Michigan is drastically overhauling the way it attracts, retains and grows businesses in the state, embarking on a new path that's drawing praise and criticism.
Gone are the days when the state eagerly doled out billions of dollars in tax breaks to lure new companies. No longer are business development teams in Lansing targeting a few promising industries like alternative energy and homeland security and defense.
Instead, the state is taking a different approach to spurring economic growth. Starting in January, it's eliminating $1.8 billion in taxes for many businesses. To help offset this lost revenue, tax breaks for companies that create and retain jobs will disappear next year. And the state has stopped rolling out initiatives to help certain industries while ignoring others.
A key part of the plan involves helping the state's existing businesses grow, a concept called "economic gardening." Many employees at the Michigan Economic Development Corp., the state's economic development agency, are trying to assist companies with their need for more capital, customers and talented employees.
"We see enormous potential to help existing businesses grow," said Michael Finney, the MEDC's CEO and president.
To be sure, Finney and other economic development officials are not ignoring opportunities to attract new businesses. In the new fiscal year that starts Oct. 1, the state plans to spend $100 million on incentives for business relocations and expansions, the preservation of historic buildings and the redevelopment of contaminated or brownfield properties.
How the $100 million will be divided among these projects will depend on the requests received, Finney said. Companies interested in setting up facilities in Michigan could get grants, loans or equity investments from the state. But it's unclear how the process would work because the MEDC is still working on the details.
"The market should dictate how we spend it," Finney said of the $100 million. "At the end of the day, jobs are the highest priority."
Experts in site selection and economic development incentives differ on whether Michigan's new approach will be successful. Some lauded the move away from tax credits and toward grants. Many companies cannot take advantage of tax credits because they have no tax liabilities so grants are more effective for them, said Jason Hickey, president of Hickey & Associates, a Minneapolis-based site-selection firm. "It's smart for Michigan to go away from tax credits," he added.
But several other experts said that $100 million may not be enough money to keep the state competitive, especially in cases where companies are looking to make capital-intensive investments. Last year alone, businesses in Michigan claimed $214 million in tax credits for expansion, relocation and brownfield projects.
Lee Higgins, senior vice president and incentives practice leader at Dallas-based Site Selection Group, said the $100 million should be devoted solely to business attraction and retention deals, with money for brownfield projects coming from elsewhere. Texas allocates $200 million in grants over two years for this purpose, he noted.
Robert Price, a director at Atlanta-based Herron Consulting, a location consulting firm, said $100 million is a "very low cap." "I don't see where that would provide Michigan with an advantage versus its competitors," he said.
So far, Michigan has not yet encountered a situation where it needs to pony up a hefty incentive in order to win a new factory or corporate headquarters. The state's last major economic development win occurred in June 2009 when General Electric announced it planned to open an advanced manufacturing and software technology center in Van Buren Township that would employ 1,200 workers. GE received a $74-million, 12-year tax credit from the state.
Big deals like this are rare. Finney said if the state ran into a situation where the $100 million was not large enough to attract a big corporate investment, then MEDC officials would ask the state Legislature for more money.
Whether this contingency plan will work remains to be seen. Richard Barr, co-chair of the investment incentives and tax savings practice group at the Detroit-based law firm Honigman Miller Schwartz and Cohn, said many companies do not want to publicize their site-selection process for fear of disrupting their employees unnecessarily.
"It's a nice commitment to consider, but it will be unusual for these circumstances to present themselves," Barr said.
Hickey said this kind of legislative process would be tough for businesses to do because nowadays expansions and relocations are getting done quickly as companies rush to snap up office and industrial space at bargain rates. "Companies realistically may not have enough time," he said.
Meanwhile, the competition for new business investments remains fierce. Ohio awarded $286 million in job-creation and retention tax credits in its 2011 fiscal year that ended June 30, a 66% increase from fiscal 2010 levels. It also restructured its tax system to be more pro-business.
Bethany McCorkle, a spokeswoman for the Ohio Department of Development, said Ohio has not yet seen an increase in business investments because of the changes in Michigan. "However, time will tell and we may see the impact as companies realize its true impact," she said.
Finney acknowledged that Michigan's new approach -- which has not been tried before by other states -- has drawn mixed reactions from people outside the state.
"It's been both skepticism and encouragement," he said of the calls that have poured into his office. "We feel pretty confident this is the right thing to do."
Sunday, July 31, 2011
Saturday, July 30, 2011
Richmond taps Denver for ad effort
By: Louis Llovio
A little more than a month after Mayor Dwight C. Jones pledged to support the city's creative community, his administration has decided to award a contract to create a branding campaign for Richmond's economic development office to an advertising agency in Denver.
"As a small-business owner who pays taxes in the city, this stinks," said David Saunders, president of Richmond ad agency Madison + Main and a finalist for the contract. "That the organization in charge of promoting a city that has some of the best agencies in the country goes 2,000 miles away is just wrong."
Saunders, who bid on the contract and insists his anger is not based on losing the bid, said the contract is worth about $100,000.
He said he believes the work should have stayed in the Richmond community, which has gained international recognition in the advertising field with one of the top advertising agencies in the country, The Martin Agency, and one of the top graduate advertising schools in the country, the VCU Brandcenter.
The city's request for bids on the project, issued March 11, asked for ad agencies to bid on a contract for brand development, website design and creative services for the city's Department of Economic and Community Development.
The city posted a notice on its website Thursday that it intended to award the contract to Atlas Advertising in Denver.
Tammy D. Hawley, the mayor's press secretary, said Friday that the city is not permitted to discuss specifics on a bid that has not been finalized. But without mentioning Atlas by name, Hawley defended the decision.
"There are firms that have particular experience attracting" large corporations and investments to cities, she said.
In a follow-up email Friday afternoon, she added: "This is an effort to increase the city's appeal with site selectors, industries, prospectors and businesses looking to expand or relocate, and the work involves only the Department of Economic and Community Development."
Saunders said the contract being awarded to an out-of-state firm is particularly galling given that the mayor has publicly supported local efforts highlighting Richmond's creative community as an economic development tool.
Last month, Jones participated in an event that worked on finding ways to market Richmond as the "capital of creativity."
"We need to embrace the creative energy, and the city needs to create a platform for the energy to be released," Jones said at the June 23 event.
The event was the launch of i.e.*, a collaboration of businesses and creative leaders that aims to "transform this city from a Civil War attraction into a nationally renowned hotbed of creative talent." About 200 people from a variety of backgrounds attended the event.
Jones also has been a strong proponent of RVA Creates, an organization formed to help boost the area's creative reputation and businesses.
Until the contract is finalized, the city cannot release any details about other agencies that bid on the contract.
Hawley added that the economic development department "conducted a broad local outreach and invited local area firms to participate in this procurement. And some of them did compete."
Saunders said his firm has worked for Richmond's Department of Economic and Community Development in the past and also helped develop a branding campaign for Chesterfield County. And before launching Madison + Main, Saunders worked on a campaign to rebrand several localities in California's Los Angeles County.
Atlas specializes in providing creative services for economic development, real estate and tourism marketers.
According to the Atlas website, the agency has done work for more than 90 communities in 35 states in and six countries.
Hawley added that a portion of the contract requires that local subcontractors be used for some of the work. She could not be more specific.
Asked about where Jones stood on the decision to award the contract to a company outside the Richmond area, Hawley said "you can't target" a specific area in the contracting process.
The decision to award the contract, she said, was made by a panel, not the mayor.
Saunders, though, said Jones is ultimately responsible for his administration's decision.
Jones is "not practicing what he preaches," he said. "When he talked about the capital of creativity, I thought he meant Virginia, not Colorado."
A little more than a month after Mayor Dwight C. Jones pledged to support the city's creative community, his administration has decided to award a contract to create a branding campaign for Richmond's economic development office to an advertising agency in Denver.
"As a small-business owner who pays taxes in the city, this stinks," said David Saunders, president of Richmond ad agency Madison + Main and a finalist for the contract. "That the organization in charge of promoting a city that has some of the best agencies in the country goes 2,000 miles away is just wrong."
Saunders, who bid on the contract and insists his anger is not based on losing the bid, said the contract is worth about $100,000.
He said he believes the work should have stayed in the Richmond community, which has gained international recognition in the advertising field with one of the top advertising agencies in the country, The Martin Agency, and one of the top graduate advertising schools in the country, the VCU Brandcenter.
The city's request for bids on the project, issued March 11, asked for ad agencies to bid on a contract for brand development, website design and creative services for the city's Department of Economic and Community Development.
The city posted a notice on its website Thursday that it intended to award the contract to Atlas Advertising in Denver.
Tammy D. Hawley, the mayor's press secretary, said Friday that the city is not permitted to discuss specifics on a bid that has not been finalized. But without mentioning Atlas by name, Hawley defended the decision.
"There are firms that have particular experience attracting" large corporations and investments to cities, she said.
In a follow-up email Friday afternoon, she added: "This is an effort to increase the city's appeal with site selectors, industries, prospectors and businesses looking to expand or relocate, and the work involves only the Department of Economic and Community Development."
Saunders said the contract being awarded to an out-of-state firm is particularly galling given that the mayor has publicly supported local efforts highlighting Richmond's creative community as an economic development tool.
Last month, Jones participated in an event that worked on finding ways to market Richmond as the "capital of creativity."
"We need to embrace the creative energy, and the city needs to create a platform for the energy to be released," Jones said at the June 23 event.
The event was the launch of i.e.*, a collaboration of businesses and creative leaders that aims to "transform this city from a Civil War attraction into a nationally renowned hotbed of creative talent." About 200 people from a variety of backgrounds attended the event.
Jones also has been a strong proponent of RVA Creates, an organization formed to help boost the area's creative reputation and businesses.
Until the contract is finalized, the city cannot release any details about other agencies that bid on the contract.
Hawley added that the economic development department "conducted a broad local outreach and invited local area firms to participate in this procurement. And some of them did compete."
Saunders said his firm has worked for Richmond's Department of Economic and Community Development in the past and also helped develop a branding campaign for Chesterfield County. And before launching Madison + Main, Saunders worked on a campaign to rebrand several localities in California's Los Angeles County.
Atlas specializes in providing creative services for economic development, real estate and tourism marketers.
According to the Atlas website, the agency has done work for more than 90 communities in 35 states in and six countries.
Hawley added that a portion of the contract requires that local subcontractors be used for some of the work. She could not be more specific.
Asked about where Jones stood on the decision to award the contract to a company outside the Richmond area, Hawley said "you can't target" a specific area in the contracting process.
The decision to award the contract, she said, was made by a panel, not the mayor.
Saunders, though, said Jones is ultimately responsible for his administration's decision.
Jones is "not practicing what he preaches," he said. "When he talked about the capital of creativity, I thought he meant Virginia, not Colorado."
“Cluster Strategy” attracts local industries to Hudson Valley region
Mid-Hudson News Network
POUGHKEEPSIE – The governor’s just-announced Mid-Hudson Regional Economic Development Council will be able to take advantage of the groundwork laid by the Hudson Valley Economic Development Corporation, its president said Thursday.
A new multi-pronged approach to local business growth is being employed by regional economic development organizations in New York.
HVEDC President Michael Oates brief the Dutchess County Economic Development Corporation on “cluster strategy” at the county agency’s quarterly meeting at Dutchess Community College in the Town of Poughkeepsie.
“One of the key ways of attracting business into a region is to foster and develop the clusters that already exist,” Oates said. “The main cluster that we’re working on is for the biotech – or life science – cluster.”
Nearly 40 percent of the all of the biotech companies in New York are located within the Hudson Valley region, Oates indicated. “We’ve branded the region, the Hudson Valley, as the epicenter for the biotech industry for the state of NY, and we’re calling it ‘NY BioHud Valley.’”
Cluster strategy involves establishing roundtable discussions between leaders in related commercial fields, together with local officials and private development groups, to better learn what industry requires from government to locate and/or expand regionally. “As an organization, we work with our partners throughout the region, to help market, coordinate activities, and try to attract investment and jobs into those sectors throughout the Hudson Valley,” Oates said.
And the strategy targets much more than biotech clusters. “One of the many beautiful things about the Hudson Valley is that we have a wide variety of growing business sectors, everything from financial services; green tech solar renewable energy; a food and beverage cluster; a flourishing film production; and tourism cluster,” he said.
Recent initiatives from Albany will help kick-start more cluster growth in New York. “We’re working with the economic development councils that Governor Cuomo has announced this week, and we are partnering with them on development of a strategic plan for the Hudson Valley,” Oates said. “We think we’re well positioned to take advantage of the resources that the Governor is putting on the table for economic development.”
Oates added that state representatives sent to similar national meetings will be expanded, to attract investment from beyond New York State. “We’re just going to continue to be aggressive in marketing the region, working with companies to help them come here, expand if they’re already here, and continue to grow.”
POUGHKEEPSIE – The governor’s just-announced Mid-Hudson Regional Economic Development Council will be able to take advantage of the groundwork laid by the Hudson Valley Economic Development Corporation, its president said Thursday.
A new multi-pronged approach to local business growth is being employed by regional economic development organizations in New York.
HVEDC President Michael Oates brief the Dutchess County Economic Development Corporation on “cluster strategy” at the county agency’s quarterly meeting at Dutchess Community College in the Town of Poughkeepsie.
“One of the key ways of attracting business into a region is to foster and develop the clusters that already exist,” Oates said. “The main cluster that we’re working on is for the biotech – or life science – cluster.”
Nearly 40 percent of the all of the biotech companies in New York are located within the Hudson Valley region, Oates indicated. “We’ve branded the region, the Hudson Valley, as the epicenter for the biotech industry for the state of NY, and we’re calling it ‘NY BioHud Valley.’”
Cluster strategy involves establishing roundtable discussions between leaders in related commercial fields, together with local officials and private development groups, to better learn what industry requires from government to locate and/or expand regionally. “As an organization, we work with our partners throughout the region, to help market, coordinate activities, and try to attract investment and jobs into those sectors throughout the Hudson Valley,” Oates said.
And the strategy targets much more than biotech clusters. “One of the many beautiful things about the Hudson Valley is that we have a wide variety of growing business sectors, everything from financial services; green tech solar renewable energy; a food and beverage cluster; a flourishing film production; and tourism cluster,” he said.
Recent initiatives from Albany will help kick-start more cluster growth in New York. “We’re working with the economic development councils that Governor Cuomo has announced this week, and we are partnering with them on development of a strategic plan for the Hudson Valley,” Oates said. “We think we’re well positioned to take advantage of the resources that the Governor is putting on the table for economic development.”
Oates added that state representatives sent to similar national meetings will be expanded, to attract investment from beyond New York State. “We’re just going to continue to be aggressive in marketing the region, working with companies to help them come here, expand if they’re already here, and continue to grow.”
Friday, July 29, 2011
KC lands two more Johnson County firms as economic development border war continues
By KEVIN COLLISON
The Kansas City Star
Kansas City’s gain was Johnson County’s loss in a string of business announcements Friday that reinforced the area’s increasingly fierce economic development border war.
Three companies will be moving to Kansas City, the largest of which is the mortgage lending operation of North American Savings Bank, members of the Kansas City Economic Development Corp. board were told.
North American will be moving 204 jobs from its current quarters in Overland Park to 903 E. 104th St. in Kansas City, and the firm plans to add 58 additional jobs over the next five years.
“We’re excited to be moving back to Kansas City; we’ve been in Johnson County the last six years,” said Bruce Thielen, senior vice president of North American Savings.
North American will get $5.8 million in incentives from Missouri and $111,000 from Kansas City. Its total investment is estimated at $6 million.
Mayor Sly James attended the regular EDC board meeting and said the announcements indicated a new attitude at City Hall about business development and retention.
“The last few weeks have been eventful,” he said, referring to a management shake-up at the EDC, “but I believe they represent a significant change in course in making the EDC a lean, mean, job-making machine.”
James also said he had met with Kansas Gov. Sam Brownback to discuss ending the incentive-driven struggle that has been moving companies a few miles across the state line.
“It’s safe to say we didn’t meet eye to eye,” he said. “We’ve had wins and we intend to compete in a targeted way to meet the job needs of our city.”
North American Savings’ shift to Kansas City from Johnson County was announced at the regular EDC board meeting.
In another move that was announced Friday, Marks Nelson Vohland Campbell Radetic LLC, an accounting firm at 7701 College Blvd., is shifting its 82-employee operation to 1310 E. 104th St. in Kansas City and plans to hire 18 additional people by 2013.
“After an exhaustive search on both sides of the state line, we were able to target space that we could design to suit our needs for future growth,” said Mark Radetic, a managing partner.
Marks Nelson will get $954,000 in tax incentives from Missouri and a 50 percent property tax abatement over 10 years from the city. The firm is investing $2.7 million.
The third company mentioned Friday, Applebee’s International and an affiliated firm, had already announced its move in late May. The move from Lenexa to 8140 Ward Parkway shifts 380 jobs. Applebee’s will be getting an incentive package valued at $12.6 million.
Other new projects announced Friday:
•Star Financial, a financial service firm now at 7431 Broadway, is expanding into new quarters at one of the former Cleveland Chiropractic buildings at 601 E. 63rd St. The firm plans to hire more than 100 people over the next five years. It will receive $230,000 in tax credits from Missouri.
•Milbank Manufacturing plans to expand into the wind turbine manufacturing market and create 57 jobs over the next five years. The new investment is $2.75 million, and it will receive $200,000 in assistance from Missouri. The firm currently has operations at 4801 Deramus and 5601 Gardner and is a leading manufacturer of electrical meter sockets.
•Superior Metal Treating, 2540 Indiana, plans to add 14 employees within five years and is building a 15,800-square-foot addition. It currently has 35 workers.
•Several other previously publicized business deals also were discussed: the Trader Joe’s opening; an expansion of Vianney Industries, doing business as Midland Metal, a family-owned plumbing fitting business; and the expansion of Portland-based Blount International into a distribution center being built at Kansas City International Airport.
To reach Kevin Collison, call 816-234-4289 or send email to kcollison@kcstar.com.
The Kansas City Star
Kansas City’s gain was Johnson County’s loss in a string of business announcements Friday that reinforced the area’s increasingly fierce economic development border war.
Three companies will be moving to Kansas City, the largest of which is the mortgage lending operation of North American Savings Bank, members of the Kansas City Economic Development Corp. board were told.
North American will be moving 204 jobs from its current quarters in Overland Park to 903 E. 104th St. in Kansas City, and the firm plans to add 58 additional jobs over the next five years.
“We’re excited to be moving back to Kansas City; we’ve been in Johnson County the last six years,” said Bruce Thielen, senior vice president of North American Savings.
North American will get $5.8 million in incentives from Missouri and $111,000 from Kansas City. Its total investment is estimated at $6 million.
Mayor Sly James attended the regular EDC board meeting and said the announcements indicated a new attitude at City Hall about business development and retention.
“The last few weeks have been eventful,” he said, referring to a management shake-up at the EDC, “but I believe they represent a significant change in course in making the EDC a lean, mean, job-making machine.”
James also said he had met with Kansas Gov. Sam Brownback to discuss ending the incentive-driven struggle that has been moving companies a few miles across the state line.
“It’s safe to say we didn’t meet eye to eye,” he said. “We’ve had wins and we intend to compete in a targeted way to meet the job needs of our city.”
North American Savings’ shift to Kansas City from Johnson County was announced at the regular EDC board meeting.
In another move that was announced Friday, Marks Nelson Vohland Campbell Radetic LLC, an accounting firm at 7701 College Blvd., is shifting its 82-employee operation to 1310 E. 104th St. in Kansas City and plans to hire 18 additional people by 2013.
“After an exhaustive search on both sides of the state line, we were able to target space that we could design to suit our needs for future growth,” said Mark Radetic, a managing partner.
Marks Nelson will get $954,000 in tax incentives from Missouri and a 50 percent property tax abatement over 10 years from the city. The firm is investing $2.7 million.
The third company mentioned Friday, Applebee’s International and an affiliated firm, had already announced its move in late May. The move from Lenexa to 8140 Ward Parkway shifts 380 jobs. Applebee’s will be getting an incentive package valued at $12.6 million.
Other new projects announced Friday:
•Star Financial, a financial service firm now at 7431 Broadway, is expanding into new quarters at one of the former Cleveland Chiropractic buildings at 601 E. 63rd St. The firm plans to hire more than 100 people over the next five years. It will receive $230,000 in tax credits from Missouri.
•Milbank Manufacturing plans to expand into the wind turbine manufacturing market and create 57 jobs over the next five years. The new investment is $2.75 million, and it will receive $200,000 in assistance from Missouri. The firm currently has operations at 4801 Deramus and 5601 Gardner and is a leading manufacturer of electrical meter sockets.
•Superior Metal Treating, 2540 Indiana, plans to add 14 employees within five years and is building a 15,800-square-foot addition. It currently has 35 workers.
•Several other previously publicized business deals also were discussed: the Trader Joe’s opening; an expansion of Vianney Industries, doing business as Midland Metal, a family-owned plumbing fitting business; and the expansion of Portland-based Blount International into a distribution center being built at Kansas City International Airport.
To reach Kevin Collison, call 816-234-4289 or send email to kcollison@kcstar.com.
Wednesday, July 27, 2011
EDC speaker focuses on jobs creation
By David Benda
The Record Searchlight
For much of his 30 minute presentation Wednesday, Jack Stewart of the California Manufacturers and Technology Association used numbers and anecdotes to cover familiar territory:
California doesn't get it when it comes to economic development; the capital's hostile attitude toward business and onerous regulations continue to be job killers.
But Stewart, a lobbyist who immerses himself in the politics of job creation, said pro-business leaders might have a surprising new ally in Sacramento.
Lt. Gov. Gavin Newsom, with whom Stewart didn't think he had anything in common before the Democrat took office, is shaping an economic development plan to grow jobs.
Stewart told business and community leaders at the annual Economic Development Corp. of Shasta County investors breakfast that it's the first time in some dozen years that an elected politician is taking job recruitment seriously.
Newsom is scheduled to unveil his economic development plan Friday.
"He is very focused on creating an economic strategy in California," said Stewart, who has headed up the CMTA since 1998.
In April, Stewart traveled with Newsom and others to Texas to learn about the success of the Lone Star State's job recruitment program.
Texas Gov. Rick Perry has become a folk hero for people like Stewart as he's marketed his state as a low-cost and business-friendly alternative to California, which is fertile job-hunting ground for Perry.
Texas has added 929,000 jobs since 2001, while California has lost approximately 635,000 manufacturing jobs in that same time, Stewart said.
Answering questions after his speech, Stewart told the story of Perry sending programmed cellphones to CEOs in California with a simple message: "If you're interested in growing your business, please call me. I'm here to help."
"They're doing something right down there," Stewart said of what he dubs the "Texas miracle." "Gov. Perry will go anywhere, any time, to try to recruit companies into Texas."
Perry has taken the state's regulatory process and managed it himself, Stewart said.
Stewart acknowledged that many of Texas' new jobs are low-paying minimum-wage positions.
"The fact is people have jobs," Stewart said in an interview after his presentation. "Wouldn't you rather have somebody working with a job?"
Wednesday's event was sponsored by the Record Searchlight, which is an EDC investor.
EDC President Mark Lascelles followed Stewart with an update on his organization's job recruitment efforts. Lascelles' organization also unveiled its new website at www.shastaedc.org, which features a link that details the local, state and federal incentives available to employers.
When he started in September, the EDC was talking with two companies about relocating to Shasta County. Today, Lascelles said, the organization is in discussions with 18 firms.
In addition to meeting with Newsom, Lascelles has met with Stanford Research Institute President Kurt Carlson and plans to meet with UC Davis officials next month to look at research and business opportunities.
Lascelles emphasized that it does no good to belabor California's regulatory environment.
"Unfortunately, we can't avoid it. We have to deal with it," he said.
The Record Searchlight
For much of his 30 minute presentation Wednesday, Jack Stewart of the California Manufacturers and Technology Association used numbers and anecdotes to cover familiar territory:
California doesn't get it when it comes to economic development; the capital's hostile attitude toward business and onerous regulations continue to be job killers.
But Stewart, a lobbyist who immerses himself in the politics of job creation, said pro-business leaders might have a surprising new ally in Sacramento.
Lt. Gov. Gavin Newsom, with whom Stewart didn't think he had anything in common before the Democrat took office, is shaping an economic development plan to grow jobs.
Stewart told business and community leaders at the annual Economic Development Corp. of Shasta County investors breakfast that it's the first time in some dozen years that an elected politician is taking job recruitment seriously.
Newsom is scheduled to unveil his economic development plan Friday.
"He is very focused on creating an economic strategy in California," said Stewart, who has headed up the CMTA since 1998.
In April, Stewart traveled with Newsom and others to Texas to learn about the success of the Lone Star State's job recruitment program.
Texas Gov. Rick Perry has become a folk hero for people like Stewart as he's marketed his state as a low-cost and business-friendly alternative to California, which is fertile job-hunting ground for Perry.
Texas has added 929,000 jobs since 2001, while California has lost approximately 635,000 manufacturing jobs in that same time, Stewart said.
Answering questions after his speech, Stewart told the story of Perry sending programmed cellphones to CEOs in California with a simple message: "If you're interested in growing your business, please call me. I'm here to help."
"They're doing something right down there," Stewart said of what he dubs the "Texas miracle." "Gov. Perry will go anywhere, any time, to try to recruit companies into Texas."
Perry has taken the state's regulatory process and managed it himself, Stewart said.
Stewart acknowledged that many of Texas' new jobs are low-paying minimum-wage positions.
"The fact is people have jobs," Stewart said in an interview after his presentation. "Wouldn't you rather have somebody working with a job?"
Wednesday's event was sponsored by the Record Searchlight, which is an EDC investor.
EDC President Mark Lascelles followed Stewart with an update on his organization's job recruitment efforts. Lascelles' organization also unveiled its new website at www.shastaedc.org, which features a link that details the local, state and federal incentives available to employers.
When he started in September, the EDC was talking with two companies about relocating to Shasta County. Today, Lascelles said, the organization is in discussions with 18 firms.
In addition to meeting with Newsom, Lascelles has met with Stanford Research Institute President Kurt Carlson and plans to meet with UC Davis officials next month to look at research and business opportunities.
Lascelles emphasized that it does no good to belabor California's regulatory environment.
"Unfortunately, we can't avoid it. We have to deal with it," he said.
Tuesday, July 26, 2011
Meet the site consultants
By Philip Newswanger
Inside Business – The Hampton Roads Business Journal
There are two key players in the economic development field.
There's the quasi-public or public official who remains in the public eye.
And then there's the site consultant, a shadowy player who shuns publicity, yet who is a powerful influence on where a company will relocate its business and how much incentive money it will receive.
Site consultants can't be ignored by the economic development community.
Darryl Gosnell, president and CEO of the region's marketer, the Hampton Roads Economic Development Alliance, said he and his staff spend 30 to 40 percent of their time with site consultants.
"We have marketing missions throughout the year and one of the focuses of the marketing mission is the site consultant," Gosnell said.
The alliance will spend a week with site consultants, most of whom are situated in New York, Los Angeles, Chicago and Dallas.
Gosnell said the use of site consultants began in the 1980s when many Japanese and European firms, unfamiliar with local customs and laws, hired stateside companies as their liaison with local governments.
"Many companies got out of the selection process in the 1980s," Gosnell said.
Instead, they hired outside firms to handle their real estate operations and selection process.
In a paper titled "The Business of Business Relocation," John Lombard, director of the E.V. Williams Center for Real Estate and Economic Development at Old Dominion University, calls site consultants "relocation consultants."
The explosion of site consultants is due to the outsourcing of corporate real estate departments to third parties, in many cases real estate providers, and the flow of information via the Internet, Lombard said, citing Jack Tomasik of the Economic Strategies Group, who has been tracking the industry since 1997.
More so, there has been an explosion of incentives, which corporations considering relocation have come to expect, Lombard said.
In essence, relocation has become in many respects a money game, and this has attracted a lot of consulting specialists, Lombard said.
Incentives range from grants and training subsidies to free land and tax credits.
Real estate consulting and site selection account for the largest share of industry specialization in business relocation, Lombard said.
The private sector environment is driven by the profit motive and the work is toward billable hours, Lombard said.
The search for an optimal solution to a particular consulting problem is a rare occurrence, Lombard said. Rather, much of relocation consulting is produced to satisfy the client for a given situation.
But here is where public policy and the private sector diverge.
Unlike economic development practitioners, who typically operate with transparency, the private sector relocation consultant is geared toward confidentiality.
On one side is the site consultant, who represents the client, a company.
On the other side are the economic developer and state and local governments as stewards of tax dollars.
"I give them their due for delivering value but I have ethical issues with them when they also work for the public sector and/or on commission," said Greg LeRoy, founder of GoodJobsFirst, an advocacy group, and author of the "Great American Jobs Scam," in an email.
"Because site consultants remain wholly unregistered and unregulated, and very adverse to publicity, we cannot offer any kinds of statistics about their compensation practices," LeRoy said.
How site consultants are compensated is controversial, although examples are hard to come by.
Many in the economic development community say they believe site consultants are paid fees based on the size of the incentives they negotiate.
LeRoy said only a few consultants work on commission or on a mix of fee and commission, and commissions normally only apply to discretionary subsidies, such as a land grant or a training subsidy, based on his research.
LeRoy said in his book that cities are living a "prisoner's dilemma" game, whereby cities are played against each for the best deal.
Given how the system is rigged, LeRoy said, all the power rests with the site location consultants and their corporate clients.
No wonder there have been recurring grumbles that consultants sometimes exaggerate the subsidy bids from one place to coax higher sums from another, LeRoy said.
LeRoy said he has heard rumors of consultants seeking consulting fees from local governments of cities where they are steering their corporate client - a sort of double-dip/two sides of the same deal issue.
"I assume this would mainly happen at the low end of the market," LeRoy said.
"We assume commissions and other problematic practices are less common among Fortune 500 companies and their site consultants."
philip.newswanger@insidebiz.com
Inside Business – The Hampton Roads Business Journal
There are two key players in the economic development field.
There's the quasi-public or public official who remains in the public eye.
And then there's the site consultant, a shadowy player who shuns publicity, yet who is a powerful influence on where a company will relocate its business and how much incentive money it will receive.
Site consultants can't be ignored by the economic development community.
Darryl Gosnell, president and CEO of the region's marketer, the Hampton Roads Economic Development Alliance, said he and his staff spend 30 to 40 percent of their time with site consultants.
"We have marketing missions throughout the year and one of the focuses of the marketing mission is the site consultant," Gosnell said.
The alliance will spend a week with site consultants, most of whom are situated in New York, Los Angeles, Chicago and Dallas.
Gosnell said the use of site consultants began in the 1980s when many Japanese and European firms, unfamiliar with local customs and laws, hired stateside companies as their liaison with local governments.
"Many companies got out of the selection process in the 1980s," Gosnell said.
Instead, they hired outside firms to handle their real estate operations and selection process.
In a paper titled "The Business of Business Relocation," John Lombard, director of the E.V. Williams Center for Real Estate and Economic Development at Old Dominion University, calls site consultants "relocation consultants."
The explosion of site consultants is due to the outsourcing of corporate real estate departments to third parties, in many cases real estate providers, and the flow of information via the Internet, Lombard said, citing Jack Tomasik of the Economic Strategies Group, who has been tracking the industry since 1997.
More so, there has been an explosion of incentives, which corporations considering relocation have come to expect, Lombard said.
In essence, relocation has become in many respects a money game, and this has attracted a lot of consulting specialists, Lombard said.
Incentives range from grants and training subsidies to free land and tax credits.
Real estate consulting and site selection account for the largest share of industry specialization in business relocation, Lombard said.
The private sector environment is driven by the profit motive and the work is toward billable hours, Lombard said.
The search for an optimal solution to a particular consulting problem is a rare occurrence, Lombard said. Rather, much of relocation consulting is produced to satisfy the client for a given situation.
But here is where public policy and the private sector diverge.
Unlike economic development practitioners, who typically operate with transparency, the private sector relocation consultant is geared toward confidentiality.
On one side is the site consultant, who represents the client, a company.
On the other side are the economic developer and state and local governments as stewards of tax dollars.
"I give them their due for delivering value but I have ethical issues with them when they also work for the public sector and/or on commission," said Greg LeRoy, founder of GoodJobsFirst, an advocacy group, and author of the "Great American Jobs Scam," in an email.
"Because site consultants remain wholly unregistered and unregulated, and very adverse to publicity, we cannot offer any kinds of statistics about their compensation practices," LeRoy said.
How site consultants are compensated is controversial, although examples are hard to come by.
Many in the economic development community say they believe site consultants are paid fees based on the size of the incentives they negotiate.
LeRoy said only a few consultants work on commission or on a mix of fee and commission, and commissions normally only apply to discretionary subsidies, such as a land grant or a training subsidy, based on his research.
LeRoy said in his book that cities are living a "prisoner's dilemma" game, whereby cities are played against each for the best deal.
Given how the system is rigged, LeRoy said, all the power rests with the site location consultants and their corporate clients.
No wonder there have been recurring grumbles that consultants sometimes exaggerate the subsidy bids from one place to coax higher sums from another, LeRoy said.
LeRoy said he has heard rumors of consultants seeking consulting fees from local governments of cities where they are steering their corporate client - a sort of double-dip/two sides of the same deal issue.
"I assume this would mainly happen at the low end of the market," LeRoy said.
"We assume commissions and other problematic practices are less common among Fortune 500 companies and their site consultants."
philip.newswanger@insidebiz.com
EDGE Keeps Memphis ‘In the Ball Game’
By Andy Meek
For the longest time, elected leaders and local economic development officials have lamented a missing ingredient surrounding what Memphis and Shelby County can do to prime the pump for business investment in the area.
Summed up in one word, that missing piece is an edge.
Those same officials have been racing for months to fashion something that affords the Memphis area a leg up on the mountain of tax breaks, help with infrastructure and other financial aid that neighboring states and cities are using to win a high-stakes economic development version of an arms race.
In public and behind the scenes, Memphis Mayor A C Wharton Jr., Shelby County Mayor Mark Luttrell and various civic officials including some affiliated with the Greater Memphis Chamber have worked to move the needle.
Late last year, Wharton made an impassioned plea to the Memphis City Council to allow the city-county Industrial Development Board to change up the way it grants tax breaks to keep businesses here in addition to bringing new ones to the area.
But even that wasn’t enough. Both mayors ultimately got behind an idea to re-jigger the whole system of economic development for the area and decided to build from scratch something they’re calling a new Economic Development Growth Engine.
In abbreviated form, it’s the elusive EDGE.
At the end of this month, several existing boards and agencies involved in the economic development game from a variety of angles – such as the IDB, which awards critical tax incentives to businesses – will disappear as they’re folded into the new EDGE entity.
Still to be chosen is an office for the group. Various procedural issues also are being finalized, such as choosing an attorney to work with the board and deciding meeting dates and times.
Even more important will be the choice of a president, who will immediately become an economic development power player as he or she is called on to juggle requests, concerns and questions among the mayors, the two local legislative bodies, business leaders and the new board.
The IDB’s swan song came last week, when that board approved six tax deals for companies planning to invest a little more than $200 million in the area and in the process create hundreds of jobs. It was the board’s final scheduled working session; it meets Tuesday, July 26, for a special meeting.
Before last week’s meeting got under way, both mayors had seated themselves at the head of the conference room table around which the board was assembled and made a few farewell remarks.
Wharton joked that the board members’ final checks were ready, a reference to the fact that the IDB is made up of all-volunteer members.
Turning serious, Wharton said, “Your check is our expression of gratitude. Your service has often been misunderstood, that you’re quote, ‘giving away tax dollars,’ close quote. But you’ve kept us in the ball game.”
Keeping Memphis and Shelby County “in the game” is a phrase the city mayor has often fallen back on.
Here’s Wharton speaking to City Council members last fall encouraging them to approve the creation of a pot of money that would be used to help keep companies here who otherwise had an incentive to leave for greener – and cheaper – pastures.
“I think most of you know I have probably been involved in most of the economic development projects or, let’s put it this way, efforts to retain some of our employers here over the last seven to eight years,” Wharton told council members. “The chamber does a great job. The IDB does a good job. But we are not equipped the way our neighbors are. We talk about PILOTs. But it’s hard to take a PILOT into a bank loan committee.
“We’ve got to send a signal that we’re serious. That we’re going to equip our agents, our recruiters. We’ve got to get in the game. The last Craig Brewer movie – we worked around the clock trying to keep that here. Everybody else has something to put on the table. What did this big city have? We lost that. Craig wanted to do that movie here so much, but we couldn’t play. We couldn’t get in the game.”
Only a week after Wharton’s comments, word emerged that Memphis-based Pinnacle Airlines Corp. was being courted heavily by the state of Mississippi, which essentially had a blank check to encourage the company to relocate its headquarters south of the Tennessee state line. Thanks to some intense scrambling and a major push involving almost every conceivable economic development group and official in the city, Pinnacle was convinced to stay.
It was a similar high-stakes scramble to convince elected leaders to approve incentives for later projects involving major corporations like Mitsubishi Electric Power Products Inc. and Electrolux. Such incentives are often the lynchpin of the deal yet dependent to a certain extent on politics.
Wharton told The Daily News the new EDGE board will improve that situation in a variety of ways. For example, international executives who need to fly in to Memphis will now have one stop to make as opposed to trying to find room in their schedule for multiple meetings.
“It’s just going to streamline those processes so that companies don’t have so many bases to touch,” said Kim Hackney, Luttrell’s senior policy adviser.
For the longest time, elected leaders and local economic development officials have lamented a missing ingredient surrounding what Memphis and Shelby County can do to prime the pump for business investment in the area.
Summed up in one word, that missing piece is an edge.
Those same officials have been racing for months to fashion something that affords the Memphis area a leg up on the mountain of tax breaks, help with infrastructure and other financial aid that neighboring states and cities are using to win a high-stakes economic development version of an arms race.
In public and behind the scenes, Memphis Mayor A C Wharton Jr., Shelby County Mayor Mark Luttrell and various civic officials including some affiliated with the Greater Memphis Chamber have worked to move the needle.
Late last year, Wharton made an impassioned plea to the Memphis City Council to allow the city-county Industrial Development Board to change up the way it grants tax breaks to keep businesses here in addition to bringing new ones to the area.
But even that wasn’t enough. Both mayors ultimately got behind an idea to re-jigger the whole system of economic development for the area and decided to build from scratch something they’re calling a new Economic Development Growth Engine.
In abbreviated form, it’s the elusive EDGE.
At the end of this month, several existing boards and agencies involved in the economic development game from a variety of angles – such as the IDB, which awards critical tax incentives to businesses – will disappear as they’re folded into the new EDGE entity.
Still to be chosen is an office for the group. Various procedural issues also are being finalized, such as choosing an attorney to work with the board and deciding meeting dates and times.
Even more important will be the choice of a president, who will immediately become an economic development power player as he or she is called on to juggle requests, concerns and questions among the mayors, the two local legislative bodies, business leaders and the new board.
The IDB’s swan song came last week, when that board approved six tax deals for companies planning to invest a little more than $200 million in the area and in the process create hundreds of jobs. It was the board’s final scheduled working session; it meets Tuesday, July 26, for a special meeting.
Before last week’s meeting got under way, both mayors had seated themselves at the head of the conference room table around which the board was assembled and made a few farewell remarks.
Wharton joked that the board members’ final checks were ready, a reference to the fact that the IDB is made up of all-volunteer members.
Turning serious, Wharton said, “Your check is our expression of gratitude. Your service has often been misunderstood, that you’re quote, ‘giving away tax dollars,’ close quote. But you’ve kept us in the ball game.”
Keeping Memphis and Shelby County “in the game” is a phrase the city mayor has often fallen back on.
Here’s Wharton speaking to City Council members last fall encouraging them to approve the creation of a pot of money that would be used to help keep companies here who otherwise had an incentive to leave for greener – and cheaper – pastures.
“I think most of you know I have probably been involved in most of the economic development projects or, let’s put it this way, efforts to retain some of our employers here over the last seven to eight years,” Wharton told council members. “The chamber does a great job. The IDB does a good job. But we are not equipped the way our neighbors are. We talk about PILOTs. But it’s hard to take a PILOT into a bank loan committee.
“We’ve got to send a signal that we’re serious. That we’re going to equip our agents, our recruiters. We’ve got to get in the game. The last Craig Brewer movie – we worked around the clock trying to keep that here. Everybody else has something to put on the table. What did this big city have? We lost that. Craig wanted to do that movie here so much, but we couldn’t play. We couldn’t get in the game.”
Only a week after Wharton’s comments, word emerged that Memphis-based Pinnacle Airlines Corp. was being courted heavily by the state of Mississippi, which essentially had a blank check to encourage the company to relocate its headquarters south of the Tennessee state line. Thanks to some intense scrambling and a major push involving almost every conceivable economic development group and official in the city, Pinnacle was convinced to stay.
It was a similar high-stakes scramble to convince elected leaders to approve incentives for later projects involving major corporations like Mitsubishi Electric Power Products Inc. and Electrolux. Such incentives are often the lynchpin of the deal yet dependent to a certain extent on politics.
Wharton told The Daily News the new EDGE board will improve that situation in a variety of ways. For example, international executives who need to fly in to Memphis will now have one stop to make as opposed to trying to find room in their schedule for multiple meetings.
“It’s just going to streamline those processes so that companies don’t have so many bases to touch,” said Kim Hackney, Luttrell’s senior policy adviser.
Coworking spaces: an economic development strategy?
By Jessica Stillman at GigaOm
When it comes to attracting companies to lovely but not exactly low-cost Santa Cruz, the city just south of Silicon Valley has a problem: no airport. Without an ultra-convenient air link the city struggled to attract large employers and the jobs they’d bring to the area. So what did the city’s creative mayor, Ryan Coonerty, decide to do? Start a coworking space.
“We realized after chasing a lot of companies that instead of attracting one 200-person business, we should attract 200 one-person businesses. The economic impact is bigger, and some of those businesses will grow,” he told Fast Company.
NextSpace, the start-up co-founded by Coonerty, just closed a $700,000 fundraising round and now has four locations in California. In Santa Cruz the space has attracted 200 members and has also proved a boon to nearby businesses, which are serving the programmers, therapists, comedians and lawyers who utilize NextSpace.
In an interview, Jeremy Neuner, the CEO of NextSpace, said that coworking spaces’ ability to boost local businesses and create jobs was very much on the NextSpace team’s minds as the company expanded, explaining that the promise of a lift to the local economy made convincing communities to welcome NextSpace easy:
In many cases, that’s the door opener. If you get a politician to open their mouth, the first five words out of their mouth are going to be jobs. As a matter of fact, the city of San Jose, their economic development director and the council member who represents downtown San Jose came to us. They said, ‘Look, much like the success you guys have had in Santa Cruz and San Francisco. We really think this is going to be good for our downtown and will you come and open up a NextSpace here?’ They were looking at it from that original notion of economic development and job creation.
Coworking makes sense for the community, Coonery agreed when speaking with Fast Company, while also underlining that it makes sense for individual workers as well. “The 9 to 5 at an office is a relatively recent phenomenon in human history, and I think it’s a short-lived phenomenon,” he says. “I don’t think it makes much sense to have all your people spend 45 minutes in traffic, come in, limit their interactions to each other, and disperse those people out at five or six at night.” Look for the trend to continue gathering pace, then.
Would a co-working space be an economic benefit for your community?
When it comes to attracting companies to lovely but not exactly low-cost Santa Cruz, the city just south of Silicon Valley has a problem: no airport. Without an ultra-convenient air link the city struggled to attract large employers and the jobs they’d bring to the area. So what did the city’s creative mayor, Ryan Coonerty, decide to do? Start a coworking space.
“We realized after chasing a lot of companies that instead of attracting one 200-person business, we should attract 200 one-person businesses. The economic impact is bigger, and some of those businesses will grow,” he told Fast Company.
NextSpace, the start-up co-founded by Coonerty, just closed a $700,000 fundraising round and now has four locations in California. In Santa Cruz the space has attracted 200 members and has also proved a boon to nearby businesses, which are serving the programmers, therapists, comedians and lawyers who utilize NextSpace.
In an interview, Jeremy Neuner, the CEO of NextSpace, said that coworking spaces’ ability to boost local businesses and create jobs was very much on the NextSpace team’s minds as the company expanded, explaining that the promise of a lift to the local economy made convincing communities to welcome NextSpace easy:
In many cases, that’s the door opener. If you get a politician to open their mouth, the first five words out of their mouth are going to be jobs. As a matter of fact, the city of San Jose, their economic development director and the council member who represents downtown San Jose came to us. They said, ‘Look, much like the success you guys have had in Santa Cruz and San Francisco. We really think this is going to be good for our downtown and will you come and open up a NextSpace here?’ They were looking at it from that original notion of economic development and job creation.
Coworking makes sense for the community, Coonery agreed when speaking with Fast Company, while also underlining that it makes sense for individual workers as well. “The 9 to 5 at an office is a relatively recent phenomenon in human history, and I think it’s a short-lived phenomenon,” he says. “I don’t think it makes much sense to have all your people spend 45 minutes in traffic, come in, limit their interactions to each other, and disperse those people out at five or six at night.” Look for the trend to continue gathering pace, then.
Would a co-working space be an economic benefit for your community?
Monday, July 25, 2011
Montgomery tries to stop jobs slide
By: Rachel Baye | Examiner Staff Writer
Montgomery County lost 18,000 jobs in the past four years, a trend officials are trying to reverse -- but they warn that the growth may be slow.
The county is trying to lure more business through a variety of programs including a tax credit for biotech companies, an incubator for startups, an easier permitting and zoning process, and more marketing, Department of Economic Development Director Steven Silverman told a County Council committee Monday.
Silverman noted that Montgomery's economic development lags that of rival Fairfax County, which is generally considered to be economically and demographically similar. Fairfax has lost 12,000 jobs in the past four years.
"We're doing everything that we can at the local level," he said. "We're looking for as many suggestions as possible from the private sector about what else we can be doing."
County Executive Ike Leggett has proposed supplementing Maryland's $8 million biotech tax credit to attract more capital for the biotech industry to Montgomery County, Silverman said.
However, Councilwoman Nancy Floreen, D-at large, pointed out that coming up with the funding might be problematic.
Silverman also pointed to the county's Incubator Network, which provides training and other resources for entrepreneurs and has enrolled about 170 companies representing 700 jobs. The program is expected to help the companies grow, building more jobs for the county's struggling economy.
More than 100 companies have graduated from the program, creating about 1,500 jobs, Silverman said. He suggested the county dedicate more resources to the program, which he said creates "one job at a time."
"There's no investment that we can make that's going to create 10,000 jobs overnight," he told
The Washington Examiner.
Councilman Marc Elrich, D-at large, said the purpose of the program was a good one, but he questioned whether the program's resources were being used wisely.
Part of the solution also lies in making building easier for new and existing businesses, Silverman said. He pointed to a recent zoning approval that allows DarCars to expand its corporate headquarters, creating what he predicts will be at least 150 new jobs.
Silverman also described plans for a new marketing campaign to drive business to the county.
Floreen said the Montgomery Business Development Corp. will give the council's Planning, Housing and Economic Development Committee, which she heads, benchmarks to show where the local economy should be.
"There's a lot to be done, no question about it," she said.
rbaye@washingtonexaminer.com
Montgomery County lost 18,000 jobs in the past four years, a trend officials are trying to reverse -- but they warn that the growth may be slow.
The county is trying to lure more business through a variety of programs including a tax credit for biotech companies, an incubator for startups, an easier permitting and zoning process, and more marketing, Department of Economic Development Director Steven Silverman told a County Council committee Monday.
Silverman noted that Montgomery's economic development lags that of rival Fairfax County, which is generally considered to be economically and demographically similar. Fairfax has lost 12,000 jobs in the past four years.
"We're doing everything that we can at the local level," he said. "We're looking for as many suggestions as possible from the private sector about what else we can be doing."
County Executive Ike Leggett has proposed supplementing Maryland's $8 million biotech tax credit to attract more capital for the biotech industry to Montgomery County, Silverman said.
However, Councilwoman Nancy Floreen, D-at large, pointed out that coming up with the funding might be problematic.
Silverman also pointed to the county's Incubator Network, which provides training and other resources for entrepreneurs and has enrolled about 170 companies representing 700 jobs. The program is expected to help the companies grow, building more jobs for the county's struggling economy.
More than 100 companies have graduated from the program, creating about 1,500 jobs, Silverman said. He suggested the county dedicate more resources to the program, which he said creates "one job at a time."
"There's no investment that we can make that's going to create 10,000 jobs overnight," he told
The Washington Examiner.
Councilman Marc Elrich, D-at large, said the purpose of the program was a good one, but he questioned whether the program's resources were being used wisely.
Part of the solution also lies in making building easier for new and existing businesses, Silverman said. He pointed to a recent zoning approval that allows DarCars to expand its corporate headquarters, creating what he predicts will be at least 150 new jobs.
Silverman also described plans for a new marketing campaign to drive business to the county.
Floreen said the Montgomery Business Development Corp. will give the council's Planning, Housing and Economic Development Committee, which she heads, benchmarks to show where the local economy should be.
"There's a lot to be done, no question about it," she said.
rbaye@washingtonexaminer.com
Sunday, July 24, 2011
With jobs plan, Cuomo hopes competition is key
Written by
JON CAMPBELL
ALBANY -- When it comes to rebuilding the state's economy, Gov. Andrew Cuomo is hoping a little competition is a good thing.
Cuomo's plan to create jobs and spur business splits the state into 10 regions, pitting them against each other for a slice of $1 billion in economic-development grants and tax breaks pooled together through a single application.
But both he and municipal leaders hope that encouraging local governments, businesses and colleges to work together on regional plans will ultimately result in a unified approach to firming up the state's economic footing.
"We compete now, region to region, for jobs and for opportunities with business," said Monroe County Executive Maggie Brooks. "This allows us to coordinate a one-voice message in each region about the unique assets and resources that set us apart from the rest of the state."
The idea behind the competitive process is simple: Having the 10 regions compete will force them to come up with the best possible plan to get the biggest slice of funding they can get.
"What we're trying to do is foster the comprehensive regional approach and defy, if you will, the normal government operating framework which has frustrated that," Cuomo said on Wednesday.
Strange bedfellows
Most local government leaders agree it won't be easy. Within the 10 individual regions, there are many different communities that rely on different industries that will have to come together on a strategic approach.
In the Mid-Hudson region, for example, suburban counties such as Westchester and Rockland, which are home to a growing biotechnology industry, are paired with Sullivan County, a largely rural community within the Catskill Mountains.
The same is true in the Finger Lakes region, where the City of Rochester and heavily populated Monroe County will unite with agriculture-based counties such as Yates, one of the smallest in the state.
"You go from urban to suburban into exurban and rural, all within that same region," said Larry Gottlieb, director of economic development for Westchester County. "The question becomes: Can what's good for Westchester or Rockland equally serve Sullivan or Ulster (County)?"
Rockland County Executive Scott Vanderhoef said the idea of encouraging communication among regions is a positive step for the state's suffering economy. But he and all of the other local governments still need to look out for their own constituency, he said.
"When it comes to the Hudson Valley, I want employers to come to Rockland," Vanderhoef said. "I like Orange and Westchester (counties), but we all have our own self-interests of course when it comes to trying to lure or expand businesses, or retain them."
Cuomo's hope is to let leaders within the individual regions decide what's best for them on their own.
"I'm not going to tell Western New York what their economic future is, and the economic future in Western New York may be different than Central New York or the North Country or Long Island," said Cuomo, who added that the idea is for the state to "partner and fund (the regions') vision."
The success of the program will depend largely on who is putting the plans together, Gottlieb said.
Lt. Gov. Robert Duffy, the former mayor of Rochester, will serve as chair of councils for all 10 regions, to promote "synergy" among the different plans, he said. Those councils will be charged with developing a five-year strategic plan for their individual regions however they see fit.
Cuomo will appoint two vice chairs to each region, and leaders from larger municipalities and each county will serve in an advisory capacity. A spokesman for Cuomo said the governor's appointees would be announced "in the coming days."
"In principal, the idea of creating an atmosphere of competition is healthy," Gottlieb said. "The question is, who are on the teams that you're putting on the field to compete against each other."
3 S. Tier cities in 1 boat
Binghamton Mayor Matthew Ryan, whose city is in the Southern Tier region along with Ithaca and Elmira, said he believes a little competition is "healthy" when it comes to economic development, but only when it strikes the right balance.
"If you break it down to have too much competition between municipalities in different areas, that's not good either," said Ryan. "It's better to try to capitalize on your strengths. But it's going to be interesting, let's put it that way."
While the success of Cuomo's jobs plan will play out over the next several years, state Association of Counties Executive Director Stephen Acquario said New York is in desperate need of consistency in its economic vision.
"Essentially, as a state we're well behind where we should be as far as attracting and maintaining business," Acquario said. "So I think it's a good first step and a smart way for the state to address jobs and the economy by taking advantage of communities."
JON CAMPBELL
ALBANY -- When it comes to rebuilding the state's economy, Gov. Andrew Cuomo is hoping a little competition is a good thing.
Cuomo's plan to create jobs and spur business splits the state into 10 regions, pitting them against each other for a slice of $1 billion in economic-development grants and tax breaks pooled together through a single application.
But both he and municipal leaders hope that encouraging local governments, businesses and colleges to work together on regional plans will ultimately result in a unified approach to firming up the state's economic footing.
"We compete now, region to region, for jobs and for opportunities with business," said Monroe County Executive Maggie Brooks. "This allows us to coordinate a one-voice message in each region about the unique assets and resources that set us apart from the rest of the state."
The idea behind the competitive process is simple: Having the 10 regions compete will force them to come up with the best possible plan to get the biggest slice of funding they can get.
"What we're trying to do is foster the comprehensive regional approach and defy, if you will, the normal government operating framework which has frustrated that," Cuomo said on Wednesday.
Strange bedfellows
Most local government leaders agree it won't be easy. Within the 10 individual regions, there are many different communities that rely on different industries that will have to come together on a strategic approach.
In the Mid-Hudson region, for example, suburban counties such as Westchester and Rockland, which are home to a growing biotechnology industry, are paired with Sullivan County, a largely rural community within the Catskill Mountains.
The same is true in the Finger Lakes region, where the City of Rochester and heavily populated Monroe County will unite with agriculture-based counties such as Yates, one of the smallest in the state.
"You go from urban to suburban into exurban and rural, all within that same region," said Larry Gottlieb, director of economic development for Westchester County. "The question becomes: Can what's good for Westchester or Rockland equally serve Sullivan or Ulster (County)?"
Rockland County Executive Scott Vanderhoef said the idea of encouraging communication among regions is a positive step for the state's suffering economy. But he and all of the other local governments still need to look out for their own constituency, he said.
"When it comes to the Hudson Valley, I want employers to come to Rockland," Vanderhoef said. "I like Orange and Westchester (counties), but we all have our own self-interests of course when it comes to trying to lure or expand businesses, or retain them."
Cuomo's hope is to let leaders within the individual regions decide what's best for them on their own.
"I'm not going to tell Western New York what their economic future is, and the economic future in Western New York may be different than Central New York or the North Country or Long Island," said Cuomo, who added that the idea is for the state to "partner and fund (the regions') vision."
The success of the program will depend largely on who is putting the plans together, Gottlieb said.
Lt. Gov. Robert Duffy, the former mayor of Rochester, will serve as chair of councils for all 10 regions, to promote "synergy" among the different plans, he said. Those councils will be charged with developing a five-year strategic plan for their individual regions however they see fit.
Cuomo will appoint two vice chairs to each region, and leaders from larger municipalities and each county will serve in an advisory capacity. A spokesman for Cuomo said the governor's appointees would be announced "in the coming days."
"In principal, the idea of creating an atmosphere of competition is healthy," Gottlieb said. "The question is, who are on the teams that you're putting on the field to compete against each other."
3 S. Tier cities in 1 boat
Binghamton Mayor Matthew Ryan, whose city is in the Southern Tier region along with Ithaca and Elmira, said he believes a little competition is "healthy" when it comes to economic development, but only when it strikes the right balance.
"If you break it down to have too much competition between municipalities in different areas, that's not good either," said Ryan. "It's better to try to capitalize on your strengths. But it's going to be interesting, let's put it that way."
While the success of Cuomo's jobs plan will play out over the next several years, state Association of Counties Executive Director Stephen Acquario said New York is in desperate need of consistency in its economic vision.
"Essentially, as a state we're well behind where we should be as far as attracting and maintaining business," Acquario said. "So I think it's a good first step and a smart way for the state to address jobs and the economy by taking advantage of communities."
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