Posts by: Economic Development HQ.com

Merced, CA Gets Call Center for Implementing Health Care Reforms

Merced County, California is setting up a regional call center to deal with the implementation of Covered California, which is the Golden State’s new health insurance exchange as required under the federal Affordable Care Act.

Covered California

Covered California (photo – ca.gov)

Starting from Oct 1, 2013, previously uninsured small businesses and individuals will be able to use this state-wide marketplace to enroll in affordable health plans. Coverage under these plans is set to begin on Jan 1, 2014.

Merced was chosen as the call center site for fielding calls and processing cases from nine counties, including Merced itself.

The center will create up to 45 new county jobs offering annual wages of up to $43,000, plus benefits and retirement.

The $5.6 million cost for the call center and the wages for the new county employees is being funded entirely through Medi-Cal, so the county is getting the call center and new jobs at zero cost to itself.

On the other hand, if the call center had gone to one of the other counties, Merced would have been obligated to that county for the cost of the calls, while still having to bear responsibility for the accuracy and on-time disposal of cases.

Since Merced currently has higher accuracy rates and efficiency, having their cases processed by another county would have meant a hike in penalties and sanctions. By securing the call center project in Merced itself, the county managed to eliminate these risks and additional costs.

The Merced County Board of Supervisors approved the County Human Services Agency (HSA) application for the call center and new hires in March, and some of the new positions have already been filled.

The call center will be fully operational by Oct 1, 2013. Because of the tight deadline, HSA decided to locate the center in their existing leased space on 16th St which was already wired into the C-IV network used for eligibility determination and processing across 39 counties in California.

This saved the additional time and cost that would have been required to configure a new site.

There’s also the cost savings associated with moving uninsured citizens into Medi-Cal. The medical care costs of these people are currently being borne by the county.

Merced County estimates there may be up to 39,600 new people eligible for Medi-Cal once the Affordable Care Act is implemented, and anywhere between 9,000 to 29,000 of them may enroll through Covered California.

Los Angeles Kicks Off Nation’s Largest Rooftop Solar FIT Program

Los Angeles, California has launched the largest rooftop solar Feed-in Tariff (FiT) program in the nation, under which the Los Angeles Department of Water and Power (LADWP) will purchase solar power from hundreds of building owners with rooftop solar installations.

LA Mayor Antonio Villaraigosa flips on Clean LA Solar FIT project

LA Mayor Antonio Villaraigosa flips on Clean LA Solar FIT project (photo – Mayor’s Office)

The LADWP FIT aims to generate 150 MW of renewable and clean solar energy – enough to power more than 43,000 homes and reduce Co2 emissions by 147 metric tons. This is the equivalent of taking 28,300 cars off the road.

This FIT program was initially proposed by the CLEAN LA Solar Coalition and the Los Angeles Business Council.

LADWP ran a 10 MW project FIT program last year as a pilot to determine market pricing and how the program needs to be structured.

LADWP got 26 applications, of which 14 were deemed to be eligible projects that the LADWP could sign a power purchase contract for.

The first FIT project completed under this demonstration program was the rooftop solar installation of Oxnard Plaza Apartments in North Hollywood.

Los Angeles Mayor Antonio Villaraigosa flipped a switch, and the building started sending to the LADWP what will amount to 142,000 kilowatt-hours of solar energy per year.

LADWP is now accepting applications for a second round of 20 MW allocation under the program starting July 8, 2013. A lottery process will select from among eligible project applications submitted in between July 8-12, 2013.

The first 20 MW round was put out earlier this year in February, and received 104 applications from within the City of Los Angeles. Of these, 60 have been selected and LADWP will sign contracts with them this summer.

LADWP General Manager Ronald O. Nichols said this was just the beginning of what they expect to be a long and beneficial public-private partnership. He said Angelenos can expect to see thousands of solar panels on rooftops throughout the city over the next few years.

Los Angeles has already started realizing the economic development benefits of this program. Solar Provider Group, which was responsible for the Oxnard Plaza installation, decided to set up their U.S. headquarters in Los Angeles. As the program develops, the company plans to create jobs for everything from solar installations to project management, finance and business development.

A University of California, Los Angeles study commissioned by the LA Business Council Institute estimated that the Clean LA Solar program would create 4,500 installation, construction, administration, design engineering and maintenance jobs in the first five years.

The UCLA study also said the program would be able to leverage $300 million in federal tax credits for businesses in Los Angeles and generate more than $500 million in private investments.

Nordex to Shutter Jonesboro, AR Wind Turbine Plant

German wind turbine company Nordex SE announced that its U.S. subsidiary Nordex USA Inc. will shutter a nacelle manufacturing plant in Jonesboro, Arkansas.

AR. Gov. Mike Beebe at Nordex ground-breaking

AR. Gov. Mike Beebe at Nordex ground-breaking (photo – Governor’s Office)

Nacelles are the cover housings which hold the turbine engines and other components.

Nordex had announced the selection of Jonesboro for the $100 million plant in Oct 2008, at which time it had proposed to hire 700 employees at average annual wages of $17 per hour.

They did get through the first phase of plant construction, investing $40 million, opening the plant in Oct 2010, and building up the workforce to around 100.

But then, uncertainty over whether Congress would extend the Production Tax Credit (PTC) hit the U.S. wind energy market hard. The PTC, slated to expire at the end of 2012, has been extended for a year and is now again slated to expire in Jan 2014.

In a statement, Dr. Jürgen Zeschky, CEO of Nordex SE, said it was a difficult decision for them. He said they were reacting to weakened demand in the U.S. market caused by the PTC’s unpredictable extensions, and the resulting low utilization of the Jonesboro assembly plant.

Nordex announced that the plant would fulfill orders already in the pipeline and then discontinue production, with the site being left operational for servicing, training, parts storage and a repair facility.

The company plans to continue selling nacelles in the Americas by importing them from the Nordex plant in Rostock, Germany.

The decision to cease nacelle production will result in 40 employees being laid-off at the facility by Oct 2013. Not to mention the fact that Jonesboro and Arkansas will never see the remaining $60 million in investment and the promised 700 jobs.

Ralf Sigrist, president and CEO of Chicago, Illinois-based Nordex USA, said it was a sad day for all of them at Nordex USA. He said they will be losing valued colleagues, but added that the decision was inevitable given the plant’s underutilization.

Arkansas will now have to initiate clawbacks to recover incentives already provided to Nordex USA. The incentives package included $8 million under the Governor’s Quick-Action Closing Fund to be used for workforce training, site preparation and infrastructure improvements.

Apart from this, the company was provided sales tax exemptions on construction material purchase, and a five percent cash rebate on the total payroll for 10 years.

Mississippi Gets Green Circle Wood Pellet Manufacturing Facility

Green Circle Bio Energy Inc., a company which manufactures wood pellets for export to energy producers in Europe, will be setting up operations in George County, Mississippi.

Green Circle Bio Energy

Green Circle Bio Energy (photo – governorbryant.com)

Green Circle plans to invest $115 million to build a facility in George County Industrial Park in Lucedale with an annual capacity of 500,000 tons of wood pellets.

The project will initially create 126 jobs, not including construction jobs while the facility is being built. The company has plans to expand and increase the number of employees to 141.

Most of the jobs will be at the facility itself, while some of the company’s employees will be located at the Port of Pascagoula, from where the pellets will be shipped to Europe for use as a renewable source and alternative fuel for coal-fired power plants.

Green Circle is based in Cottondale, Florida, where it has what it claims is the world’s largest wood pellet manufacturing facility with a production capacity of 560,000 tons per year and the wood sourced from sustainable forests in the Southeast.

The company has been exploring expansion options since 2011, when production in Cottondale started nearing maximum capacity.

In July 2012, the Florida Department of Environmental Protection issued a draft permit approving Green Circle’s application for a revised permit, boosting their maximum allowed production capacity from 610.000 tons to 810,000 tons per year. At the same time, the company also started looking at other locations in Alabama and Mississippi for a second plant.

The new facility in George County, MS almost doubles their production capacity once it becomes operational in spring 2015.

Morten Neraas, CEO of Green Circle Bio Energy, said the industrial park was an ideal location inside a large wood basket area and close to the Port of Pascagoula. He credited the location decision to their relationship with the Port of Pascagoula and the George County Board of Supervisors.

A couple of months ago, the Mississippi legislature approved $10 million in state bond funding to build a specialized wood pellet exporting facility at terminals E and F at Bayou Casotte Harbor. Now the port has signed an agreement with George County which provides the remainder of the funding from the county and the primary user of the terminal.

George County and the Mississippi Development Authority are additionally providing support for the company’s infrastructure needs at the facility in the industrial park.

California Approves Economic Development Reforms Bill

On June 27, 2013, the California State Assembly approved an economic development reform bill (AB-93) which moves $750 million worth of business incentives from California’s Enterprise Zones to statewide incentive programs.

CA Enterprise Zone reform

CA Enterprise Zone reform (photo – ca.gov)

AB-93 was amended and approved by the California State Senate on a 30-9 vote a couple of days ago, so it went straight to the Governor’s desk for his signature after the amended version was passed by the Assembly on a 54-16 vote.

After the bill’s passage, CA Governor Edmund G. Brown Jr. issued a statement in which he said it was a big and bipartisan win for working people and businesses in California. He said AB 93 would create good manufacturing jobs and help grow the economy.

Kish Rajan, director of GO-Biz, the Governor’s Office of Business and Economic Development, said that the California economy had been coming back strong during the past year. He said the AB 93 vote adds to that momentum and would put their foot on the accelerator for economic development in California.

The bill had backing from labor groups, while others, such as the League of California Cities, opposed the bill, claiming it would decrease local tax revenues and place additional burdens on struggling communities.

AB 93 moves Enterprise Zone incentives to three new programs, as outlined below:-

The existing sales tax credit for Enterprise Zone businesses is now a statewide sales and use tax (SUT) exemption on manufacturing and bio-tech equipment purchase for manufacturing companies and those engaged in biotech R&D.

A Hiring Credit of 35 percent of wages that fall in between 1.5-3.5 times the minimum wage will be available for five years in specific geographic areas to companies hiring long-time unemployed workers, veterans, ex-offenders and those receiving federal earned income tax credit.

The California Competes Credit, to be administered by GO-Biz, will help the Golden State attract new business activity and retain existing ones by offering tax credits as an incentive based on the number and quality of jobs created.

Read more about the reforms approved under AB 93 in this updated briefing put out by Go-Biz. 

Canon Announces $27M Expansion in Newport News, VA

Canon Virginia Inc. is expanding operations in Newport News, Virginia to add toner manufacturing for Canon’s color copiers.

Canon Newport News

Canon Newport News (photo – canon.com)

Canon Virginia Inc. will be investing $27 million for the project, out of which $10 million will be used for upgrading 30,000 square feet of space in the facility and the remaining amount for machinery.

The toner manufacturing project will create 12 additional positions, but Canon may not hire new employees, since the positions can be filled by reassigning workers from other duties.

The Newport News-based Canon Virginia Inc. is a wholly owned subsidiary of Melville, New York-based Canon U.S.A., Inc., whose parent company is Tokyo, Japan-based Canon Inc. (NYSE:CAJ).

Virginia Gov. Bob McDonnell met with Canon Inc. executives in Japan regarding this expansion project during an economic development trip to Asia earlier this year in April.

Gov. McDonnell said that the Commonwealth and Canon have maintained a strong partnership for almost three decades. The Governor said he was honored to have the opportunity to work directly with Canon Virginia and its parent to strengthen their bond.

The City of Newport News and Virginia Economic Development Partnership (VEDP) worked together to secure the project. Canon has been offered $3 million in incentives, in the form of a grant under the Virginia Investment Partnership program. This is a performance-based grant available only to existing companies in Virginia undertaking expansions with new investments.

Canon’s expansion project additionally qualifies for a Real Property Investment Grant (RPIG) under Virginia’s Enterprise Zone program.

Toru Nishizawa, president and CEO of Canon Virginia, Inc., thanked Gov. McDonnell and the City of Newport News for the “generous grant,” which he said would help them successfully complete the expansion.

Nishizawa added that the expansion and investment was a symbol of the company’s commitment towards the Commonwealth of Virginia. Canon Virginia has announced capital investments worth $371 million in the last four years.

Newport News Mayor McKinley L. Price said they were pleased at succeeding in working with Canon Virginia and the Commonwealth to secure the expansion project.

Newport News Economic Development Director Florence G. Kingston, said the expansion was a testament to the company’s commitment towards manufacturing excellence. Kingston added that it also demonstrates that global manufacturers find Newport News and the Commonwealth of Virginia as attractive places for doing business.

Video Gaming Information Company Curse Relocates to Huntsville, AL

San Francisco, California-based video gaming information company Curse Inc. announced that it will relocate its corporate headquarters to Huntsville, Alabama.

Curse CEO Hubert Thieblot at Huntsville press conference

Curse CEO Hubert Thieblot at Huntsville press conference (photo – curse.com)

Curse has had its development team located in Huntsville for the past three years, so the move is more of a consolidation of the development, marketing and content teams into the same space in the BB&T Building.

Once the relocation is complete, the Huntsville office of Curse will house 40 employees. Curse currently has around 100 employees all put together, with additional offices in New York City, Canada, Europe and Australia.

The San Francisco office will remain open to house the company’s accounting department and administrative workers.

Curse CEO and founder Hubert Thieblot said that they had been looking for a place that would be beneficial and friendly towards the company and its employees. He said Huntsville provided all this, and added that they were pleased with the high quality of talent in the area.

Huntsville Mayor Tommy Battle likewise said that the City’s strong talent pool and thriving tech scene was a natural fit for the Curse community.

Brandon Byrne, vice president of finance at Curse, said they considered several West Coast locations including Los Angeles, Las Vegas, Seattle and Boulder.

However, for the sake of the team’s synergy, they decided that the content and development teams had to be in the same place, and then reached out to the Chamber of Commerce of Huntsville and Madison County.

Byrne said he still looked at the corporate tax rates, cost of living, employee taxes and the availability of talent in all the aforementioned cities, and found Huntsville to be competitive enough.

Not to mention that the State of Alabama provided some vital assistance to facilitate the relocation. Details of the incentives offered were not disclosed.

Curse Inc., founded in 2006, serves has more than 60 video gaming websites that attract 30 million unique visitors and in excess of a billion page views per month.

Curse aims to help online gamers enjoy their video games with the help of community websites, tips, tools and gaming guides. The Curse Client, a desktop application for managing add-ons, has more than three million active users.

Kingspan Selects Deland, FL for North American HQ

Kingspan Insulated Panels, Inc. held a ribbon-cutting ceremony yesterday, officially designating their DeLand, Florida facility as the company’s North American headquarters.

Kingspan facility in DeLand, FL

Kingspan facility in DeLand, FL (photo – kingspanpanels.us)

The designation requires $2.5 million in capital investment by the company, and the expansion will result in the addition of 30 new jobs and retention of 50 existing jobs at the facility.

The company has 132 existing jobs at the plant.

Earlier this month, Kingspan had announced that they would be going forward with upgrades for increasing the production line capacity in DeLand, and anticipated 40 new jobs being added as the projects moved ahead.

As per Kingspan’s agreement with Volusia County, the 30 new jobs that were just announced will have average annual wages of at least $37,354.

In return, the State of Florida and Volusia County will together offer Kingspan performance-based tax refunds worth $90,000 as incentives under the Qualified Targeted Industry (QTI) program. The state picks up 80 percent of the QTI refunds, while Volusia County will be on the hook for the remaining $18,000.

Deland was in competition with another Kingspan facility in Ontario, Canada, for being designated as the North American headquarters.

The incentive package was worked out and the project secured through a state-local collaboration between Enterprise Florida, Volusia County and the Florida Department of Economic Opportunity (DEO). Also involved in the project were the City of DeLand, the Center for Business Excellence, and Workforce Florida.

DeLand Mayor Robert Apgar said it was an honor for DeLand to be named as the North American headquarters of an international company like Kingspan which operates in 30 countries.

Jesse Panuccio, executive director of DEO, said that Kingspan’s decision to select Florida as the location for its headquarters was the latest proof that the state’s economy was heading in the right direction.

Fergal Murphy, vice president of Sales, Kingspan Insulated Panels, Inc., said that they were pleased to be contributing positive momentum to the economy in Central Florida.

The DeLand plant, along with two other plants in Modesto, California and Columbus, Ohio, became a part of Kingspan Panels when the company acquired Metecno in 2008.

Kingspan Insulated Panels is the U.S. subsidiary of Kingscourt, Ireland-based Kingspan Group Plc, a global corporation with more than 5,000 employees across the world, including 400 in North America.

GM Announces $133M Investment at Wentzville Plant

General Motors announced a new investment of $133 million at its Wentzville Assembly and Stamping plant in Missouri.

GM Wentzville plant in MO

GM Wentzville plant in MO (photo – gm.com)

The investment will be used to build and equip another 114,000-square-foot stamping plant at the facility, which already has two. The expansion project will help create or retain 55 jobs.

The Wentzville plant produces the Chevrolet Express and GMC Savana, which are full-size vans. Construction is underway at the plant for adding production of two midsize pickups – the Chevrolet Colorado and GMC Canyon.

Larry Zahner, manufacturing manager, GM North America, said that stamping parts in the same place where the vehicles are assembled improves manufacturing efficiency.

Missouri Gov. Jay Nixon said they were pleased GM was once again expanding operations at the Wentzville plant, and added that investments by global brands such as GM had helped keep the state’s unemployment rate below the national average for the past 45 months.

The state has offered GM a package of incentives for this latest expansion that are tied to the company meeting its job creation and investment commitments.

GM currently employs around 2,000 workers in two shifts at the Wentzville plant. This number will go up significantly as GM continues to add more of the 1,660 new jobs announced in Nov 2011.

Back then, the company had announced an investment of $380 million and 1,260 new jobs for a 500,000-square-foot expansion for adding production of mid-size pickups in Wentzville. At the same time, they also announced another 400 jobs due to increase in demand for the existing vans produced at the facility.

At that time, the state offered GM incentives worth $36.8 million under the Missouri Manufacturing Jobs Act, and additional incentives under the Missouri Quality Jobs program and another workforce training program. The City of Wentzville provided local incentives in the form of a sales tax exemption for purchasing construction material, and a 75 percent abatement of property taxes on the new property and equipment.

The exact amount of state and local incentives offered for this latest $133 million investment and 55 jobs was not disclosed.

UAW Vice President Joe Ashton, who is director of the union’s GM Department, said the investment further demonstrates the confidence the company has in this team and the hard work they put in for serving customers.

SO.F.TER Selects Lebanon, TN for US HQ and Manufacturing Plant

Italian plastics company SO.F.TER Group announced that it has selected Lebanon, Tennessee as the site for its U.S. headquarters and a new manufacturing plant.

SO.F.TER plant in Lebanon, TN rendering

SO.F.TER plant in Lebanon, TN rendering (photo – softergroup.com)

The project will require an investment of $11.5 Million to build a 100,000-square-feet facility which will have a production capacity of 50 million pounds.

The company has initial plans to create 50 new jobs in the next two or three years.

They plan to subsequently expand the facility on the 21 acre site in Wilson County to 250,000 square feet and increase the number of employees to 150 and the plant’s capacity to¬†150 million pounds.

Riccardo Meucci, Global Commercial Director of SO.F.TER. GROUP, said this was a step of paramount importance for their internationalization strategy. The company already has three plants in Italy, a sales office in Germany, and two more production units in Silao, Mexico and Campo Bom, Brazil.

The new Tennessee plant completes their production network in the Americas, allowing them to pivot towards Asia where SO.F.TER plans to open a plant in India next year and another one in China in 2016.

Tennessee Department of Economic and Community Development Commissioner Bill Hagerty said he had enjoyed getting to know the SO.F.TER management, and appreciated their decision to locate in Tennessee. State and local incentives offered for the project add up to nearly $2.5 million.

Wilson County Mayor Randall Hutto thanked SO.F.TER management and Wilson County Commission members for their support of the project. He added that the company’s decision to locate in Wilson County was a vote of confidence in the county’s workforce.

Lebanon Mayor Philip Craighead likewise said they were looking forward to a long and prosperous relationship with SO.F.TER. U.S., made possible by their partnership with JECDB of Wilson County and the State of Tennessee.

SO.F.TER. U.S. will make its debut in the U.S. plastics market in October at the SPE Automotive Conference in Detroit, Michigan. The new plant is likely to be operational by the end of the year.

The Forti, Italy-based SO.F.TER. Group is one of the world’s largest independent compounders, producing everything from engineering plastics to thermoplastic elastomers and vulcanizates. Last year, the SO.F.TER. Group generated a turnover of $330 million.

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