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Friday, 12 June 2015 13:55

Klohs confident on Right Place’s 2015 performance, but uncertain over MEDC’s future

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Birgit Klohs Birgit Klohs PHOTO: Katy Batdorff

West Michigan’s business outlook continues to improve, but local economic development officials see a potentially tumultuous time ahead for their statewide partners at the Michigan Economic Development Corp.

While Grand Rapids-based The Right Place Inc. is on track to meet the goals outlined in its strategic plan by the end of 2016, proposed budget cuts to the state’s economic development arm could derail future growth.

That’s according to Birgit Klohs, the president and CEO of The Right Place, who gave an annual progress update to the Kent County Board of Commissioners at its Thursday meeting.

“We are really concerned about the future of the Michigan Economic Development Corporation and that we will have a robust organization statewide with a good strategy that complements not just (RPI) but all the economic development agencies across the state,” Klohs told MiBiz after her presentation.

The Right Place’s concern stems from a series of 12 bills introduced by Republican leaders in the state House that would raise more than $1 billion to fix Michigan’s failing infrastructure.

House Bills 4607 and 4608 would cut $185 million from the MEDC, nearly half of the agency’s proposed $403 million budget for next year, according to a report from Crain’s Detroit Business. The legislation passed the House on Wednesday and awaits a vote from the Senate.

“We need a consistent partner in the state, someone we know is going to be there,” Klohs told MiBiz. “Strategies and tactics can change, but you can’t decide that one year you are in it and one year you are out of it. That just makes us crazy. You talk about our pipeline — it won’t stay full if we do that.”

If the cuts were to go through, the MEDC would effectively become an “oversight agency” with few economic development tools at its disposal, thus hampering Michigan’s ability to attract new businesses to the state, Klohs said.

“Today’s actions open Michigan up to raids on our jobs and prosperity from competitors in 49 other states and any number of nations,” said MEDC CEO Steve Arwood in a statement on the legislation the House passed. “We will do our best to stanch the impact of these votes. All should know we will now begin fighting competitors who are energized by this declaration to move Michigan to its most meager economic development capabilities in decades.”

Despite the threats to the MEDC, The Right Place has helped facilitate six corporate expansion projects with nearly $47 million in new capital investment that will create 282 new jobs and result in more than $11 million in new payroll as of June 2015, according to data from the organization.

To meet the goals in its three-year plan, The Right Place would need to facilitate and attract approximately 3,000 more new jobs, plus an additional $3.9 million in new investment and $96.2 million in additional payroll.

“I have every intention of making those numbers,” Klohs said told commissioners during her presentation.

While Klohs declined to comment on the details of the group’s project pipeline, the organization is “working on a number of very healthy projects” that are smaller in scope than the $140 million investment CiTic Dicastal Co. Ltd. announced last year for an industrial site in Greenville.

With new companies continuing to enter the area, The Right Place has been working closely with both businesses and community colleges to address the gap in talent and skilled trades that many companies cite as barriers to growth, Klohs said. The organization is also working with regional developers to build new greenfield industrial sites to attract more business to the state, she said.

Overall, The Right Place has helped spur growth in West Michigan across all of its focus areas, which include smart manufacturing, agribusiness and food processing, life sciences, technology and commercial design.

“This industrial base has totally diversified,” Klohs said. “We now have so many different businesses (that) we can ride out various swings in our economy. Ten years ago, this would have been a very different list, and I’m very proud of the diversification we’ve done.”

Growth in West Michigan

Here are some recent corporate expansion or relocation projects that The Right Place Inc. has been involved with, along with the Michigan Economic Development Corp.:

• Terryberry Co. LLC will invest $2.6 million at its headquarters in Grand Rapids and create 53 additional jobs through 2017.

• Grand Rapids-based software design and development firm Atomic Object LLC invested $2.9 million in a new facility in Grand Rapids, creating nine new jobs.

• Formerly based in Bennington, Vt., defense contractor Plasan North America Inc. relocated its North American headquarters to the Grand Rapids suburb of Walker, adjacent to its sister company, Plasan Carbon Composites Inc. The company invested $12.3 million in the move and expects to create 120 jobs over the next three years.

• The Right Place worked with Germany-based MBL Tool & Die Inc. to open its North American headquarters in Grand Rapids. The project created five new jobs.

• Cargill Kitchen Solutions Inc. created 35 new jobs through a $27 million investment in Odessa Township.

• Grand Rapids-based Irwin Seating Co. invested $1.9 million in a new production line at its Walker facility, resulting in the creation of 60 jobs.

Read 3029 times Last modified on Sunday, 28 June 2015 18:03

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