Economic Development

Even as West Michigan’s economy continues to improve, its public education system faces considerable uncertainty.

Executives in Michigan’s solar energy industry spent most of 2016 dealing with anxiety and uncertainty over proposed legislative changes most believed would have stifled growth in the state’s nascent sector.

Last year, Larry Zeiser answered a phone call that would forever change the way he perceived drug abuse in West Michigan.

Fisheries managers witnessed firsthand the devastation caused to coastal communities around Lake Huron when the population of chinook salmon abruptly crashed in 2004.

LAKETOWN CHARTER TOWNSHIP — Just south of Holland, voters last spring narrowly defeated a local plan to bring high-speed broadband internet service to every residential and commercial building in the township.

Roughly a year ago, Jackson-based Consumers Energy became the first major utility in Michigan to propose a statewide network of electric vehicle charging stations.

Across West Michigan, Native American tribes have started to hang out their own shingle in enterprises that move them away from the familiar tribal-owned casino.

Because Native American tribes are sovereign nations, they’re tax-exempt and have their own statutes and regulations, although they must follow federal law. Tribally owned firms also are exempt from state and federal income taxes.

Economic developers from West Michigan and across the state increasingly find their roles shifting.

COLDWATER — When Clemens Food Group began searching for a site to house its new 550,000-square-foot pork processing facility, access to wastewater capacity emerged as its top requirement.

GRAND RAPIDS — Despite the many accolades for West Michigan’s economy in recent years, prosperity hasn’t necessarily reached all people in the broader community to the same extent.

BATTLE CREEK — Over the last year, the Cereal City has experienced its share of bad headlines.

GRAND RAPIDS — Betsy DeVos’ new role as U.S. Secretary of Education under President Donald Trump will require her to step away from some of her vast business interests to comply with federal ethics laws.

Mark Williams worked at the Grand Rapids Home for Veterans for about 20 years as an employee of the state Department of Military and Veterans Affairs. He was laid off in 2013 when the state privatized the facility and turned to contracted workers.

When it comes to economic development efforts in Michigan, practitioners and policymakers say it’s important to legislate the tools to attract and retain companies, not individual projects.

Federal regulators this month rejected a plan by the multi-state electric grid operator to redesign the capacity auction process for parts of Michigan and Illinois, a move that would have affected electric choice customers and providers.

Jackson-based Consumers Energy remains in discussions with the Michigan Public Service Commission over its plan to end an agreement to buy electricity from the Palisades nuclear plant in Van Buren County.

The number of startup companies spun out of Michigan’s top three research universities trended higher as of mid-decade, a possible product of heightened support for entrepreneurship in recent years.

Businesses confronted with the risk of cybersecurity attacks need to avoid falling into the mindset that “it can’t happen to us.” 

GRAND RAPIDS — By hiring two economic development professionals who work with the minority community, Start Garden LLC looks to broaden its outreach to more entrepreneurs.

Michigan Republicans are taking swift action at the start of this year’s legislative session to gradually phase out Michigan’s income tax.

GRAND RAPIDS — The conversion of several low-income properties to market-rate apartments by a West Michigan-based property investor has raised concerns in Lansing and Washington, D.C. 

For the annual year-end Crystal Ball edition, MiBiz asked executives from around West Michigan to share their outlooks for 2017, both for their industry and their companies.

Ask manufacturing executives about their biggest challenges and they’ll most likely sum it up in one word: talent. As Michigan’s unemployment rate continues to shrink, manufacturers have struggled to attract and retain people, especially the in-demand skilled workers they need to run their highly automated plants. The Lansing-based Michigan Manufacturers Association has heeded its members’ call by partnering with the SME Education Foundation and the Manufacturing Institute on a new talent solution, said MMA President and CEO Chuck Hadden. SME’s Partnership Response In Manufacturing Education (PRIME) initiative offers customizable curricula, while the Institute’s “Dream It Do It” program provides a framework for manufacturers to communicate more effectively with educators. 

As any company involved in the automotive industry knows, the sector clearly follows a cyclical pattern over time. Patrick Greene, the president of Cascade Die Casting Group Inc. in Grand Rapids, believes that after six years of growth in U.S. auto sales, the next downward cycle could occur “in the next couple years.” But Cascade Die Casting and other suppliers, for whom the pain of the 2008-2009 recession remains a very fresh memory, have already started taking action. “We are preparing by making sure our balance sheet is strong and our operations are highly productive and efficient going into the downturn,” Greene said. 

Earlier this month, Spartan Motors Inc. struck a $36 million deal with fire truck manufacturer Smeal Fire Apparatus Co. The deal marks a turnaround for the company’s emergency response business, which has struggled financially in the past, according to President and CEO Daryl Adams. For the first time since 2008, Charlotte-based Spartan Motors is on track to be profitable for all four quarters in 2016 and Adams believes the Smeal acquisition will better position the company in the coming year. Moreover, Adams noted that Spartan Motors’ fleet/delivery and specialty chassis divisions remain open to acquisitions if the right opportunities emerge. 

Given that JSJ Corp.’s diversified manufacturing operations span North America, Mexico and China, Nelson Jacobson and the company’s board of directors are bracing for a period of acute political uncertainty. However, the chairman, president and CEO of the Grand Haven-based company fully expects to see “very significant growth — 20 percent plus” in 2017. That growth is coming off a record year this year in which JSJ’s sales were “well over” $500 million across its portfolio that includes GHSP Inc., Izzy+ and Dake Corp. Jacobson spoke with MiBiz about his outlook for the new year and how the political volatility influences the company’s plans. 

To say Aaron Zeigler is optimistic may be an understatement. Zeigler Auto Group recently topped $1 billion in annual revenue and expects to add another $50 million in revenue before the close of this year. By March, the organization hopes to finish construction on a motorsports dealership and “action park” — complete with a full restaurant, bar and several miles of test tracks — that will serve as a destination for enthusiasts, said Zeigler, the president of the dealership group. He projects growth by acquisition to continue to heat up in 2017. “We could add another three to four dealers next year pretty easily,” he said. Overall, Zeigler bets the economy will likely continue to grow, particularly if the incoming administration fulfills its promises to cut taxes. 

GRAND RAPIDS — If 2016 was the year of planning for myriad multi-family residential projects around West Michigan, 2017 seems to be the year for execution.

fairly new addition to the West Michigan commercial real estate scene, Grand Rapids-based Vision Real Estate Investment Inc. had a “banner year” in 2016. said President Tim Engen. With a mix of multi-tenant office buildings, industrial facilities and mixed-use residential properties within its portfolio, the firm made headlines in mid 2016 when it paid more than $31 million to acquire 99 Monroe, the fully-leased and renovated downtown Grand Rapids Class A office building. 

Anirban Basu thinks West Michigan’s real estate and construction industry has a pretty solid outlook for 2017. The chief economist for the Washington, D.C.-based Associated Builders & Contractors (ABC) views the region as having a strong job market and plentiful access to capital. Basu — who is also president and CEO of Baltimore-based economic consulting firm Sage Policy Group Inc. — spoke with MiBiz following his annual presentation in early December to the Western Michigan chapter of ABC. 

In recent years, Franklin Partners LLC has been one of West Michigan’s most active developers when it comes to revitalizing under-utilized office and industrial space. Principal Don Shoemaker maintains a bullish outlook for 2017 as his company plans to seek heavy industrial tenants for the former General Motors stamping plant in Wyoming now known as the Site 36 Industrial Park. Franklin Partners also expects to finalize its decision in the first quarter about a redevelopment of the Display Pack site on North Monroe. Future uses there could include offices or residential — or a combination of both.

Orion Real Estate Solutions, the development arm of Grand Rapids-based general contractor Orion Construction Co. Inc., remains one of the most active developers in the market. The firm plans to open about 550 market-rate apartments in early 2017. Orion Real Estate President John Wheeler and Orion Construction President Roger Rehkopf spoke with MiBiz about their outlooks for the industry in 2017. 

Municipalities and state and local units of government feel anxious for myriad reasons heading into the new year, according to Mark Nettleton, an attorney focused on municipal law, land use, zoning and real estate at Grand Rapids-based Mika Meyers PLC. With a new presidential administration, clients are unclear just what may be in store for 2017, according to Nettleton. The attorney thinks all manner of issues, from trade and tax policy to business incentives, could impact West Michigan’s municipalities. 

Neither the uncertainty of a new presidential administration nor possible interest rate hikes act as a deterrent for development, according to Rick DeKam. “It would take a much larger multiple percentage point increase to dramatically slow our economy, which is not in the Fed’s best interests,” said DeKam, the principal at Portage-based Midwest Realty Group LLC. He believes it’s “smooth sailing” heading into 2017, particularly because of low inventory across commercial real estate sectors in West Michigan and continued high demand. 

Peter Skornia, the newly-appointed president of Grand Rapids-based construction and development firm Bazzani Building Co., hopes for a positive 2017. With favorable economic conditions for building and a new partnership aimed at further business development, Skornia expects the company to grow by expanding its workforce and via enhanced marketing. 

From craft distilling to artisan food to retailing to niche publishing firms, West Michigan’s small business executives are genuinely upbeat as they look to 2017. 

No matter whether you love or hate the Patient Protection and Affordable Care Act, what’s become clear is that 2017 will bring major changes to the federal health care reform law.

After completing most of a $66.4 million renovation and expansion in 2016, Mary Free Bed Rehabilitation Hospital looks to 2017 as a year to finish the project and to reach out further into new markets in Michigan. Mary Free Bed has five contracts with hospitals in Muskegon, Kalamazoo, Traverse City, Lansing and Pontiac to provide inpatient rehabilitative care. The Grand Rapids-based rehab hospital is “just thriving right now as an institution in every way you can measure” and presently is holding discussions with a half-dozen acute-care hospitals to join its care network, CEO Kent Riddle told MiBiz. 

Metro Health enters 2017 as a subsidiary of the University of Michigan Health System after the two closed on an affiliation agreement toward the end of 2016. The deal with the Ann Arbor-based U-M Health System gives Metro Health a partner to expand medical services ranging from primary care to specialties. It also allows Metro Health to better compete in the market. President and CEO Mike Faas told MiBiz he believes the deal is the biggest thing to happen in the local health care market since the 1997 merger of the former Butterworth Hospital and Blodgett Memorial Medical Center that created Spectrum Health, the largest care provider in the region.

Pine Rest Christian Mental Health Services plans to pursue new partnerships around the state in 2017. CEO Mark Eastburg wants to create a network of hospitals and care providers that contract with the Grand Rapids-based Pine Rest to provide and manage their behavioral health care services. That strategy follows a model that Mary Free Bed Rehabilitation Hospital has used effectively to reach out from its home base. Pine Rest has 17 outpatient clinics — 15 in West Michigan and two in Iowa — plus inpatient and residential facilities. The nonprofit employs about 1,900 people and serves 45,000 clients annually.

Spectrum Health President and CEO Rick Breon expects West Michigan’s economy to stay strong in 2017, although the incoming Trump administration and the fate of the Affordable Care Act adds uncertainty to the year ahead for health care. Breon expects the new presidential administration “will, on some level, follow through on its campaign promise to repeal and replace the Affordable Care Act.” The big question is when and how that occurs.

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