IEDC Promoting Motorsports Economic Development With Dallara Simulator

The Indiana Economic Development Corp. (IEDC) announced that it will be investing $1.15 million into the motorsports engineering program at the Indiana University-Purdue University, Indianapolis (IUPUI) Purdue School of Engineering and Technology.

Dallara Simulator

Dallara Simulator (photo – .iupui.edu)

The investment is supposed to be used by IUPUI for a partnership with Dallara, ostensibly to advance motorsports engineering technologies and economic development in Indiana related to motorsports.

For its part, IUPUI is chipping in with $200,000 for the project.

Specifically, the two-year grant offers funding to help complete and operate the most advanced vehicle simulator in the world being built at the Dallara IndyCar Factory.

The factory is located in Speedway, just a mile from the Indianapolis Motor Speedway, home of the Indianapolis 500. Dallara Automobili, which is an Italian company, already has this simulator in Italy and it has been tested by well-known racecar drivers in Italian competitions.

Ed Carpenter, the 2013 Indy 500 pole winner who is team owner and driver of the No. 20 Fuzzys Vodka Chevrolet, said that he was thrilled the Dallara Simulator was coming to Indiana. He said he had used it a couple of times in Italy, and added that it would be a great tool for teams in the Izod IndyCar Series.

The investment is being made with the hope that the simulator will lead to more partnerships between Indiana’s academic institutions, the motorsports industry and racing teams. It will also further the state’s reputation as a center for motorsports, and attract more teams and their support staff of engineers and mechanics.

Indiana Secretary of Commerce Victor Smith said that by linking advanced innovations in the motorsports industry to higher education, the state will continue to be a pioneer in motorsports R&D and generate new investments and jobs.

Andrea Pontremoli, general manager and CEO of Dallara, said that the simulator will not only raise racing technology levels in Indiana, but also impact other industries outside of motorsports that will be able to use the technologies.

David Russomanno, dean of the Purdue School of Engineering and Technology, explained that the simulator enables rapid prototyping of innovative vehicle designs. This technology can therefore be used not just in motorsports, but also by the automobile industry.

A recent Perdue study showed that the motorsports industry in Indiana is worth more than $3 billion, directly employs more than 23,000 workers with average annual wages of almost $63,000, and is credited for another 421,000 indirect jobs.

Texas Approves HB 800 R&D Tax Incentives Bill

An economic development bill (HB 800 and SB 859) offering tax credits for companies engaged in research and development activities has been approved by the Texas legislature. The bill is now on its way to Gov. Rick Perry’s desk for his signature.

Texas research dollars

Texas research dollars (photo – window.state.tx.us)

The House version, authored by State Rep. Jim Murphy was passed earlier this month, and the Senate just approved SB 859, authored by State Senator Bob Deuell, chair of the Senate Economic Development Committee.

The bill offers companies engaged in qualified research activities (as defined under federal tax law) in Texas a choice between accepting a sales tax exemption or a franchise tax credit.

An additional franchise tax credit would be available to companies that partnered on research projects with universities and private higher education institutions.

State Rep. Jim Murphy said that HB 800 would dramatically enhance the state’s ability to attract R&D investments. He said that company relocations begin with R&D, and are followed by design, production and other departments.

Chairman Bob Deuell said that HB 800 was a critical economic development policy. He added that research has shown that such policies are capable of generating billions in economic activity and creating thousands of jobs.

A study commissioned by Texans for Innovation and prepared by Austin, TX-based TXP, Inc. was published earlier this year in support of HB 800.

The study outlined the perils ($3.1 billion in economic activity and 23,600 jobs lost) of being one of the seven states that do not offer incentives for R&D. An earlier franchise tax credit for R&D was eliminated in 2006.

On the other hand, the study says that once the R&D tax credits are available, Texas will gain $13 billion in additional economic activity each year, along with 97,600 new and permanent jobs.

By comparison, the $250 million cost to tax-payers in the form of reduced revenues due to HB 800 is reasonable, given the amounts that usually need to be provided as incentives to create jobs and attract new business.

Governor Rick Perry said that HB 800 was sound public policy which helps ensure that the next big innovation will be born and raised in Texas.

HB 800 will take effect starting from Jan 1, 2014 and is slated to expire in 2026.

KS, NH Bases Selected for KC-46A Refueling Tanker Operations

The U.S. Air Force has announced that McConnell Air Force Base in Wichita, Kansas will be the first KC-46A refueling tanker base for active duty operations. New Hampshire‘s Pease Air National Guard base was selected as the tanker’s first Air National Guard operational base.

KC-46A base site selection

KC-46A base site selection (photo – af.mil)

McConnell AFB will now be sent 36 KC-46A tankers to replace KC-135R tankers.

The base is getting a $200 million infusion for upgrades required to become the main operating base (MOB 1) for KC-46A operations.

The selection ensures the base and its economic impact on the community will be maintained for the long-term.

These 36 KC-46 tankers are just one part of the first phase which involves replacing 179 tankers. There are two more phases afterwards, and all three phases put together will replace 59 KC-10 and 400 KC-135 tankers.

McConnell AFB was competing for this project with bases in Washington, Oklahoma and North Dakota.

It wasn’t all smiles for Kansas, though, because the Forbes Military Airfield in Topeka lost its bid to be designated as the Air National Guard led main operating base (MOB 2) for the KC-46A. This project was won by New Hampshire’s Pease Air National Guard base.

Apart from Pease and Forbes, three other bases in New Jersey, Pennsylvania and Ohio were competing for MOB 2.

New Hampshire Governor Maggie Hassan said that on behalf of the people of New Hampshire, they were proud and honored to have the KC-46A with the Granite State’s National Guard.

Kansas Governor Sam Brownback said it was unlikely that two bases in the same state would be chosen for the initial round of the KC-46A base site selections. He added that Kansas being the only state that had two bases competing in the final stage of the process speaks for the quality of personnel at the bases.

Washington Governor Jay Inslee, whose Fairchild AFB lost out against Wichita’s McConnell, issued a statement in which he said the Fairchild community, Spokane County and the State had made important investments for preparing the base to host the tanker, and this was “an extremely unfortunate decision” by the Air Force.

The reasons for which McConnell and Pease were selected are explained here.

Altus Air Force Base in Oklahoma was also one of the unsuccessful candidate sites for MOB 1, but Altus did get chosen as the first KC-46A formal training unit or FTU.

These chosen sites for MOB 1, MOB 2 and FTU are only the “preferred alternatives” based on the results of evaluations and cost estimates developed by site survey teams.

The final site decisions will be announced at a later date depending on the outcome of additional approvals such as the Environmental Impact Analysis Process (EIAP) which includes a public comment period.

MPAA Study – MA Film Tax Incentives Generates $375M in Economic Output

The Motion Picture Association of America (MPAA) released a study that details the economic impact of film tax credit incentives offered by Massachusetts.

MA Film Offic

MA Film Office (photo – mafilm.org)

The study, commissioned by the MPAA and prepared by New York-based HR&A Advisors, Inc., says that every dollar provided under the Massachusetts Film Tax Incentive program generates $10 in spending for the Commonwealth.

Highlights from the study (data for 2011 unless otherwise specified):

- $37.9 million in tax credits generated an economic output of $375.3 million;

- The film tax incentive is credited with creating and supporting 2,220 full-time jobs across all industries, including indirect and induced jobs;

- The film tax incentive was introduced in 2006, and film production employment increased by 46 percent in the next five years. During this same period, overall private-sector employment in Massachusetts dropped by 0.5 percent;

The study also suggests that the incentives are starting to catalyze infrastructure investments. They cite the $35 million New England Studios project just outside Boston as an example. This will be the first full-service Hollywood-style studio in Massachusetts, and its construction phase alone is expected to support 440 full-time jobs across all industries, with an economic impact of $62.3 million.

The study authors note that the operators of New England Studios have said they would not have undertaken the project in the absence of the film tax incentive program. The operators have also said that if this first phase is successful, they will consider an $80 million expansion.

The Massachusetts Film Tax Incentive program offers three types of incentives, including a 25 percent  transferrable payroll credit, 25 percent transferrable production expense credit, and sales tax and use tax exemptions for production expenditures in Massachusetts.

In order to qualify for the payroll credit and sales tax exemption, production companies are required to spend at least $50,000 in Massachusetts for qualifying expenses in a 12-month period.

In order to get the production expense credit, at least 50 percent of their total expenses are required to be in Massachusetts, or 50 percent of their principal photography must have been shot in Massachusetts.

Read the full MPAA study on the economic impact of MA film tax credits – Download (pdf)  

Amazon Web Services to Add 500 Jobs in Fairfax County, VA

Amazon Web Services, Inc., (AWS) will be opening a new office in Fairfax County, Virginia to handle an anticipated boost in demand for its cloud services from federal agencies.

AWS cloud

AWS (photo – amazon.com)

As part of the expansion, AWS will be adding 500 new high-paying jobs to support IT engineering and services for commercial and government customers.

This announcement comes a day after Amazon announced that its government cloud computing service AWS GovCloud had received an Agency Authority to Operate (ATO) from HHS under the Federal Risk and Authorization Management Program (FedRAMP) requirements.

What this means is that all federal agencies can now move forward quickly with evaluating and authorizing use of AWS for their applications.

Teresa Carlson, vice president of Worldwide Public Sector, AWS, said that more than 300 government agencies already use AWS services. She said that the FedRAMP compliance would now allow government agencies to use a streamlined process from AWS when moving their applications to the cloud.

Carlson added that they looked forward to employing another 500 Virginians, and also noted that they appreciated the local and state support that made this investment possible.

Gerald L. Gordon, Ph.D., president and CEO of the Fairfax County Economic Development Authority (FCEDA), said that AWS was the perfect example of the kind of company that can take full advantage of Fairfax County’s tech community and skilled workforce.

In order to secure the project, FCEDA worked with the Virginia Economic Development Partnership (VEDP), and got the company approved for a $500,000 grant from the Governor’s Opportunity Fund. The Virginia Department of Business Assistance will provide AWS with support and funding for recruitment and workforce training.

The county has additionally agreed to spend a matching amount for infrastructure improvements for the new AWS office in the Herndon area.

Amazon Web Services, Inc., was launched in 2006 as an Amazon.com company (NASDAQ:AMZN) offering a low-cost and scalable infrastructure platform on the cloud. Today, they offer more than 30 different services with data centers in the U.S., Europe and four other countries.

Tax-Free NY – Universities Now Tax-Free Zones for Businesses

New York State today launched the “Tax-Free NY” initiative under which a business will be able to operate free of taxation in an SUNY campus for ten years. Qualified businesses will pay no sales tax, business tax or property tax, and their employees will pay no income tax.

Gov. Cuomo announcing Tax-free NY

Gov. Cuomo announcing Tax-free NY (photo – NY Governor’s Office)

Tax-Free NY is meant to attract startups and venture capital to university communities, along with business relocations and investments that require educational institutions as partners.

NY Gov. Andrew M. Cuomo said that the initiative would supercharge efforts to grow the economy by transforming Upstate New York localities into tax-free communities. He said it would take the state’s job creation and economic development efforts to never-before seen levels.

SUNY Chancellor Nancy Zimpher added that the tax free zones would add to their campus’ ability to create jobs, innovate and attract new businesses with the help of public-private partnerships.

Highlights of the announced Tax-Free NY Initiative include:

- All SUNY campuses outside NYC will be tax free. The tax-free zone where no corporate, property and sales tax will be applicable includes a 200,000 square feet area around each campus;

-  Designated private institutions north of Westchester will also be tax-free. A total of three million square feet of commercial space will be available at private universities;

-  Twenty state-owned properties will be designated as tax-free zones; and

- All employees at facilities opened by businesses in these tax-free zones will pay no income tax.

New startups, out-of-state companies relocating to New York, and existing businesses expanding operations will all be eligible to set up operations in these tax free zones. Other companies which have a relationship to the university’s academic mission may also be eligible.

Tax-Free NY aims to replicate the huge impact that the College of Nanoscale Science and Engineering (CNSE) has had on the Capital Region’s economy. CNSE has attracted private investments worth billions, which has turned the area into an internationally desired location for the commercial nano-technology sector.

Dr. Alain Kaloyeros, senior vice president and CEO of CNSE, said that the initiative will build on the Governor’s success at harnessing the power of innovation and education to attract jobs and investments from the world’s leading hi-tech companies.

Danos Announces $30M Expansion and HQ Relocation in Louisiana

Larose, Louisiana-based Danos, a strategic services and construction partner for oil and gas companies, announced that it will be investing $10 million to relocate their corporate headquarters to Gray, Louisiana, along with another $20 million for building a new manufacturing facility.

Danos jobs

Danos jobs (photo – danos.com)

The exact site for the new fabrication and manufacturing unit has not been finalized, and Danos is evaluating several port locations in Louisiana.

As part of the expansion and new corporate headquarters investment, Danos will create 426 new jobs over the next five years.

Out of this, 326 will be corporate positions with average annual wages of $75,000, not including benefits. The rest are manufacturing jobs with average annual wages of $65,000,also not including benefits.

Louisiana Economic Development (LED) estimates that the investment and direct new jobs will create 871 indirect jobs, making for a total of 1,300 new jobs.

By securing the headquarters relocation and manufacturing plant projects, Louisiana has also managed to retain 400 existing Danos jobs, and another 200 construction jobs that are expected to be created. The company will retain a fabrication unit located at the existing headquarters in Larose.

Before they settled down on the Terrebonne Parish site for their headquarters, Danos’ site selection process included many potential sites across the Gulf Coast, including locations in Texas, Mississippi and Alabama.

CEO Hank Danos said their family business had deep roots in South Louisiana, and the culture and heritage of the region was important to who they were as a company.

In order to secure the project, LED’s Business Expansion and Retention Group worked with Danos and has offered the company a $1.5 million grant under the Economic Development Award Program.

The company will also be eligible for workforce training support and tax incentives under the Quality Jobs and Industrial Tax Exemption program.

Vic Lafont, president and CEO of the South Louisiana Economic Council, said that this is the third generation of the Danos family’s continued service to the community. He said the company had survived both manmade and natural disasters, and has continued to prosper and grow.

Steve Vassallo, CEO of the Terrebonne Economic Development Authority, said it was another indication of how dramatically the economy has improved. He added that creating new jobs makes it that much easier to recruit the next company they go after.

GE Aviation to Invest $27M for Lean Lab in Newark, DE

GE Aviation announced that it will be investing $27 million to develop a “lean lab” at its facility in Newark, Delaware, where it makes advanced CMC (ceramic matrix composites) components for aircraft engines.

GE Aviation

GE Aviation (photo – geaviation.com)

The investment will create 70 new high-paying jobs for engineers and technicians over the next five years. The 110,000 square-foot facility in Newark already has 80 existing employees.

Lean labs allow the company’s engineering and manufacturing personnel to work together to prove a component’s readiness for manufacturing.

The production technology and processes used to make CMC components will be developed and tested at Newark before being moved into the manufacturing units for mass production.

CMCs are expected to be a critical part of aircraft component manufacturing because they are lightweight and allow engines to operate at higher temperatures, which ultimately results in more environment-friendly aircraft with higher fuel efficiencies and reduced emissions.

The first commercial test for CMCs is in GE’s LEAP jet engine, which is being used in a host of the latest aircraft models including the Airbus A320neo and Boeing 737 MAX. GE also plans to use CMCs in their GE9X engine, which is going to be a part of the Boeing 777X program.

The demand from jet engine makers for CMC components is expected to increase tenfold over the next ten years.

Jeff Wessels, plant leader at Newark, said the Newark team would play a vital role in developing the next generation of aircraft engines, and they were proud of it. He also said this investment was a testament to GE’s commitment to this technology.

Delaware has approved $1.1 million in incentives for the expansion. GE Aviation will get a $305,000 performance-based grant from the Delaware Strategic Fund for its job creation commitment, in addition to $810,000 for building renovations and equipment purchase for the expansion.

DE Gov. Jack Markell said that GE Aviation hits many of the targets Delaware was aiming for, including new economy jobs and global reach.

Cincinnati, Ohio-based GE Aviation is a unit of General Electric Co. (NYSE: GE), and produces jet and turboprop aircraft engines, along with components for commercial and military aircraft. The company has 39,000 employees worldwide and generates annual revenues in excess of $18 billion.

GM Announces $44.5M Logistics Center in Lansing, MI

General Motors Co. (NYSE: GM) announced a $44.5 million investment at the Lansing Grand River Assembly plant in Lansing, Michigan. GM plans to build a new logistics optimization center.

GM Lansing Grand River Assembly plant

GM Lansing Grand River Assembly plant (photo – gm.com)

The new logistics center will create 200 new jobs at the plant, which already has around 1,600 employees.

The $44.5 million investment will be used to build a 400,000-square-foot building alongside the plant. The logistics center will enable GM to sequence and assemble parts to enable flexible manufacturing.

The center will improve efficiency and save money, including on reduced transportation of parts and improved quality because of reduced parts handling.

The Lansing Grand River Assembly plant currently produces the Cadillac ATS, along with three Cadillac CTS models including the wagon, sedan and coupe.

In Dec 2012, GM announced plans to move production of the next-generation Chevrolet Camaro from its Canadian plant in Oshawa, Ontario to Lansing.

The logistics center will be operational by 2015, at around the same time that production of the Camaro is expected to begin.

The plant’s existing employees worked in two shifts to produce 76,785 vehicles last year. Considering that GM sold more than 80,000 Camaros in the U.S. last year, production at the Lansing plant will soon be double its current output. Investments and new jobs for the Camaro have not yet been announced.

GM has recently made an $88 million investment announcement in May 2011 and another $190 million in Oct 2010 for continued production of the next-generation Cadillac CTS and ATS respectively at the Lansing Grand River Assembly plant.

Earlier this year, GM had filed paperwork with the City of Lansing asking for $4 million in tax incentives for a future expansion of the Grand River plant.

GM’s Lansing Regional Plant Manager Tony Francavilla said the plant would not have been so successful without support from the community, city council and Mayor Bernero.

Lansing Mayor Virg Bernero said that their hometown car company had done it again with this latest investment. He said GM was building the best automobiles in the world, and the city was thrilled with their key role in the company’s strategy for competing and winning in the global marketplace.

Reinsurance Group of America Breaks Ground on $140M Headquarters

Reinsurance Group of America (NYSE: RGA), one of the world’s largest life reinsurance companies, broke ground for its $140 million global headquarters in Chesterfield, Missouri.

RGA

Photo – RGA/wikipedia

The company has committed to adding 300 new jobs over the next five years as moving into the new 405,000-square-foot facility facilitates RGA’s growth.

The plan to build a global headquarters and add 300 jobs was first announced in November last year. In order to secure RGA’s relocation and expansion project, St. Louis County offered the company a 50 percent property tax and personal property tax abatement.

In addition to the local incentives, the company is eligible for state tax incentives worth $10.5 million, based on its commitment to create 300 new jobs and invest $140 million.

The incentives offered will not only create new jobs, but also save the 800 existing RGA jobs in the St. Louis region, most of which are located at the existing leased offices in Chesterfield.

The new 17-acre site for the global headquarters across from Chesterfield City Hall is just a couple of miles away, and construction of the two five-story office buildings, connecting two-story atrium lobby, parking garage and other infrastructure is expected to be completed by the end of next year.

Although the current design calls for development of 405,000 square feet, the site can accommodate future expansions to add more space up to a total of 650,000 square feet.

Missouri Governor Jay Nixon said it was always exciting to see companies that have already been located in the state for a long time make more investments. He added that RGA’s expansion was more evidence that efforts to foster a stable and pro-business environment were paying off.

RGA reinsures life insurance policies sold by insurers, and is a Fortune 500 company with 1,655 employees located across 25 countries. As of the end of last year, the company had assets worth $40.4 billion and had life reinsurance worth $2.9 trillion in force. RGA generated revenues worth $9.8 billion last year.

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