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Sunday, 27 April 2014 22:00

Regional partnership secures approval for 6 development sites

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The MEDC recently approved six marketing zones submitted by the West Michigan Economic Partnership, which plans to launch a website and marketing campaign aimed at providing site selectors details about the benefits of locating a company in the zones. Under the program, new or expanding companies that are reliant on multi-modal logistics can access streamlined incentive packages, including the possibility of a tax-free Renaissance Zone. Among the six zones in West Michigan are nearly 200 acres of mostly private-owned parcels on the Muskegon Lake shoreline. The MEDC recently approved six marketing zones submitted by the West Michigan Economic Partnership, which plans to launch a website and marketing campaign aimed at providing site selectors details about the benefits of locating a company in the zones. Under the program, new or expanding companies that are reliant on multi-modal logistics can access streamlined incentive packages, including the possibility of a tax-free Renaissance Zone. Among the six zones in West Michigan are nearly 200 acres of mostly private-owned parcels on the Muskegon Lake shoreline. COURTESY PHOTOS

Michigan wants to roll out the welcome mat for large, logistics-intensive companies that need access to different modes of transportation to move goods.

To do so, the current administration is turning to a mostly unproven Granholm-era law that encourages collaborations among local governments to market key properties to site selectors and to new or expanding companies.

The West Michigan Economic Partnership (WMEP), an intergovernmental collaboration led by The Right Place Inc. and Muskegon Area First, can now offer streamlined incentives packages and tax benefits — including the possibility of a Renaissance Zone — in six “marketing zones” the Michigan Economic Development Corp. recently approved in Kent and Muskegon counties.

“This is ultimately about attracting new private-sector investment and job creation in West Michigan to leverage our assets,” said Rick Chapla, vice president of business development at The Right Place who confirmed MEDC approval of the West Michigan zones.

The WMEP is one of five statewide Next Michigan Development Corporations focused on marketing key zones to new businesses or expanding companies that rely on at least two types of transportation infrastructure.

The MEDC approved the establishment of marketing zones in the cities of Grand Rapids, Kentwood, Muskegon and Wyoming; Cascade Township; and both Kent and Muskegon counties. Overall, the zones cover more than 800 acres of both public and private properties. WMEP could also propose a seventh site under the program.

The sites approved as marketing zones include:

  • Roughly 200 acres between 36th Street and 44th Street in Grand Rapids, known as the Ashley Capital-Steelcase campus
  • Nearly 200 acres along the shores of Muskegon Lake
  • Site 36 in Wyoming, the former location of the General Motors stamping facility on 36th Street
  • 170 acres in Cascade Township near the Gerald R. Ford International Airport
  • The 109-acre Muskegon County Industrial Park in Dalton Township
  • And a 54-acre assemblage in Kentwood Township at 52nd Street and Patterson Avenue.

To market the designated sites, WMEP plans this summer to launch a new website that’s being developed by Muskegon-based Revel. The partners will also kick off a targeted marketing campaign directed at site selectors and aimed at enticing logistics-intensive companies to move into the sites, Chapla said.

To support the marketing campaign, the WMEP has a $40,000 budget it raised from the participating local units of government and property owners plus a matching grant from the MEDC.

“This isn’t your typical marketing plan,” said Tim Mroz, vice president of communications for The Right Place. “There are certain key industry types and interested investment parties that would make use of this.”

The WMEP plans to target its marketing to companies such as food processors, heavy or large-scale manufacturers and life science companies that rely on time-sensitive materials. To be considered for the incentives, companies must be reliant on at least two or more modes of transportation for their operations. The incentives are not compatible for retail stores or software developers, officials said.

“A good example is a company that receives inbound materials at the airport, but the scale of what they produce is such that it has to go out on rail,” Chapla said. “It isn’t just for any business, and that’s the point we’re trying to demonstrate. This is a narrow niche of businesses that need those good logistics networks.”

New Ren Zones on tap

The state approved the formation of the West Michigan Economic Partnership in early 2012 under P.A. 275, known as the Next Michigan Development Act, which was established in 2010 by former Gov. Jennifer Granholm. But while the WMEP had been in existence for two years, the MEDC just approved the WMEP’s marketing zones within the last 60 days.

WMEP was the fifth regional partnership to be established, joining similar logistics-focused efforts in the Grand Traverse region, the I-69 corridor, the Port of Lansing and VantagePort in Southeast Michigan. A sixth partnership is in the planning stages for the Upper Peninsula.

In drafting the Next Michigan Development Corporation legislation, lawmakers didn’t want to reinvent the wheel with new programs, but rather streamline the existing incentive tools and make the state a partner in large-scale developments, officials said.

In exchange for locating in one of the approved sites, companies have access to a handful of incentives, including Renaissance Zones, tax increment financing for infrastructure, brownfield incentives, personal property tax abatements and industrial facilities tax exemptions.

The WMEP, for example, can seek Michigan Strategic Fund approval for up to 12 Renaissance Zones of 200 acres or less, where eligible companies could operate with 100-percent relief from real and personal property taxes for five to 10 years, with a possible extension to 15 years. The tax breaks are phased out in 25-percent increments in the final three years of the designation.

Additionally, the number of companies eligible for Renaissance Zone designation under the Next Michigan Development program is capped at 25 statewide.

The creation of WMEP and the Next Michigan Development program aims to challenge the assumption that Michigan, a state of two peninsulas, is unable be a major player in logistics, Chapla said.

“People not only in business, but to some extent in government, still think that Michigan is at some sort of strategic disadvantage because of our geographic location,” Chapla said. “The thought is because we’re surrounded by lakes that it’s somehow an impediment to the inbound and outbound movement of freight. …The truth we’ve got multi-billion dollar corporations that haven’t found (the geography) to be an overwhelming obstacle to competing.”

Long-term project

To date, the five existing partnerships established under the Next Michigan Development program have yet to show many successes, but officials say that’s to be expected as the projects targeted under the program are long-term plays that take decades to materialize.

For example, backers of VantagePort, formerly known as the Detroit Region Aerotropolis, are focusing their efforts to drive investment around the Detroit Metropolitan Airport and Willow Run Airport systems. When it was announced in 2010, project leaders said they hoped to eventually attract $10 billion in new investment and create 64,000 jobs.

As of last year, VantagePort said that 2,500 new jobs and $320 million in planned investment had been announced, according to a report in Bridge Magazine.

Without much of an established track record of success, it will take partnerships like WMEP time to gain momentum behind their interlocal partnerships, strategies and site designations, Chapla said.

“We’re at the beginning,” he said of the WMEP project. “We’re getting ourselves in order so that we can move forward on implementation.”

Additionally, the partnerships were on hold for about a year and a half to two years because of the change in administration, said Ben Swayze, manager of Cascade Township.

“Really, Granholm had defined what she wanted (NMDCs) to be, but it took the Snyder administration a little while to determine how they wanted to utilize it in their economic development scheme,” Swayze said. “So there was a bit of time where we’re kind of sitting on our thumbs waiting for the state to tell us how we were going to be able to use this.”

While the Next Michigan Development designations are set to sunset in 2023, the WMEP has put a five-year progress evaluation in place. Once that period is up, the board will decide whether or not to continue the partnership based on the success of the group’s efforts, Swayze said.

In particular, officials said they are excited about the possibilities of establishing new Renaissance Zones in the region. The Renaissance Zone isn’t in the business attraction toolbox for many local governments and could be a huge incentive for sites such as the Ashley Capital-Steelcase campus, said Kara Wood, WMEP board member and economic development director for the city of Grand Rapids.

The next meeting of the WMEP board is set for May 14. The members plan to gather ideas for logos, review marketing materials and discuss WMEP’s next steps, Wood said.

“We’re in the very early stages,” she said, “but more progress and updates should be coming.”

Read 3495 times Last modified on Friday, 25 April 2014 11:42

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