Posts by: Economic Development HQ.com

Commerce Dept’s Open for Business Agenda – Trade, Innovation, Data

Secretary of Commerce Penny Pritzker unveiled the Department of Commerce’s new “Open for Business” policy agenda centered around innovation, data, and trade and investment.

Secretary of Commerce Penny Pritzker unveils “Open for Business” Agenda

Secretary of Commerce Penny Pritzker unveils “Open for Business” Agenda (photo Рcommerce.gov)

Sec. Pritzker said global trade has grown 40 percent in just four years, and 95 percent of consumers are outside the United States. The greatest commercial opportunities for U.S. firms in the 21st century will not be at home, but outside the borders.

Simply put, said Sec. Pritzker, trade has to become a bigger part of the economy’s DNA.

One of the initiatives announced as part of the “Open for Business” agenda is a new and revitalized National Export Initiative. NEI 2.0 calls for the government and industry to work together closely for helping businesses become globally fluent.

Sec. Pritzker also mentioned a federal initiative to establish public-private partnerships based on New York State’s highly successful collaborative model for the semiconductor industry. This will be done by the institutes that are being set up under the National Network for Manufacturing Innovation (NNMI).

Workforce training will be a priority aspect of the agenda, pushed through federal funding and other coordinated efforts by the departments of Commerce, Education and Labor.

Federal funding opportunities will be aligned with workforce development that supports training for demand-driven skills.

The Commerce Department will emphasize industry-led training when funding state partners working with small manufacturers, and will track the outcomes and share them through the Manufacturing Extension Partnership (MEP).

For its part, the U.S. Economic Development Administration (EDA) will be encouraging grant applicants to ensure that local workforce needs are incorporated into their proposals.

The most interesting part of the new “Open for Business” Agenda is about how Commerce plans to use the federal government’s extensive data to help grow business and conserve the environment.

Sec. Pritzker mentioned the data produced by Commerce’s National Oceanic and Atmospheric Administration (NOAA) as an example. Each day, NOAA produces 2 terabytes of climate and weather data that powers a multi-billion dollar industry – everything from the Weather Channel to weather apps for smartphones.

The point here being that there is some 17 terabytes more such data that goes largely untapped.

A new public-private initiative is in the works to help unleash more data from the NOAA that entrepreneurs can use to launch startups that will provide the public information about the climate, weather and the oceans.

This will additionally help communities adapt to climate change, develop stronger resilience standards for infrastructure and buildings, and maintain world-class weather forecasting capabilities.

Sec. Pritzker said they will expand this effort beyond the NOAA, and plan to go through all the agencies under the Commerce Department and work with industry to make the data standardized and easy-to-use.

As part of the unveiling of the “Open for Business” Agenda at Washington D.C. area incubator 1776, Sec. Pritzker took questions about the agenda on Commerce’s Facebook page.

Google, KKR Make Joint Investment in CA, AZ Solar Facilities

Google and global investment firm KKR announced that they are making an investment in six solar photovoltaic (PV) facilities currently under development by Recurrent Energy in California and Arizona.

Victor Phelan solar project in San Bernardino, CA

Victor Phelan solar project in San Bernardino, CA (photo – Google)

The six facilities (five in Southern California and one in Arizona) together will have a renewable power production capacity of around 106MW.

The six-project portfolio is expected to be operational early next year, and will generate enough electricity to power more than 17,000 homes in the U.S.

The power generated will be sold through long-term power purchase agreements (PPAs) to utilities and municipal offloaders including Southern California Edison.

This is Google’s 14th such investment in renewable energy projects. This time, Google is investing $80 million. Together with the earlier investments, Google’s total outlay on all 14 projects adds up to more than a billion dollars.

Kojo Ako-Asare, Head of Corporate Finance for Google, said that investing in renewable energy is at the core of Google’s values. He said that Google strongly believes in making investments that are good for both the environment and for business.

This is the second time that Google, KKR and Recurrent Energy have come together on solar projects. Back in 2011, Google similarly teamed up with KKR and invested $94 million in four of Recurrent’s solar developments.

Kojo Ako-Asare added that Google was proud to continue their partnership with KKR and Recurrent through investments in these fantastic solar facilities.

Ravi Gupta, a senior member of KKR’s Energy and Infrastructure division, said the partnership with Google and Recurrent was ultimately about growing clean energy resources in North America.

Gupta said they believe that as states such as Arizona and California adopt high standards for use of renewable energy, private capital partners can play important roles in helping these states meet their goals.

Arno Harris, CEO of Recurrent Energy, said Google and KKR’s continued partnership with Recurrent showcases the strong commitment they have towards a clean energy future.

Harris added that the leadership of these companies in clean energy investments further validates the integral role of solar in the energy economy.

Recurrent has a large portfolio of utility-scale solar facilities to provide competitive clean energy. The company currently has solar projects under development in North America that together have a renewable energy production capacity of more than 2 GW.

Boeing Opens Up 777X Process For Competitive Site Selection

In a landmark union vote that is sure to have huge ramifications on the future of Washington’s aviation and aerospace industry, 67 percent of the members of the Machinists Union (IAM District 751) voted to reject Boeing’s new contract offer.

Boeing  Everett facility

Boeing Everett facility (photo – boeing.com)

Boeing had previously stated that they would build the 777X jetliner in Puget Sound if the union voted to approve the contract, and would start looking elsewhere only if it was rejected.

Reactions to the vote from the main stakeholders:-

IAM District 751 Directing Business Representative Tom Wroblewski – “It is my belief that we represent the best aerospace workforce in the world and hope that as a result of this vote Boeing will not discard our skills when looking to place the 777X.”

Boeing Commercial Airplanes President and CEO Ray Conner ‚Äì ‚ÄúWithout the terms of this contract extension, we’re left with no choice but to open the process competitively and pursue all options for the 777X.‚Äù

WA Gov. Jay Inslee – “Washington State is still where the best machinists build the best airplanes.”

Gov. Inslee held a press event after the IAM 751 vote results were announced. He said Washington could have won this without any competition, but that didn’t happen.

The Governor said Boeing told him they are now going to put out Request for Proposals (RFPs) for the 777X project from multiple U.S. states, and was assured that Washington would be one of the states being considered.

Gov. Inslee said Washington still has strengths that they intend to bring to the competitive site selection process that will now ensue.  He said they have several advantages in this process, including the best aerospace workers in the world, and the massive incentive package that the Washington Legislature has already passed.

He said that if you want to build airplanes reliably, with the highest quality and on time, the State of Washington is the place to do it.

The Governor also said he has asked Boeing and IAM District 751 to continue talking to find a way to resolve their disagreements.

If that doesn’t work out and the 777X lands elsewhere, there are 39,000 people working at Boeing’s Everett plant who will find their jobs on shakier ground. Not to mention the ripple effect on Washington’s aerospace industry – 132,500 jobs and $76 billion in economic activity.

Coca-Cola Announces $30M Expansion in Milwaukee

The Coca-Cola Company (NYSE: KO) is expanding its Milwaukee bottling and distribution facility to add a Smartwater product line and warehouse capacity.

Gov. Scott Walker at Coca-Cola facility in Milwaukee, WI

Gov. Scott Walker at Coca-Cola facility in Milwaukee, WI (photo – Governor’s Office)

The $30 million expansion project will create 16 new full-time jobs at the facility.

Wisconsin Gov. Scott Walker took a tour of the Coca-Cola bottling plant to recognize the company’s investment.

Gov. Walker said Coca-Cola was a major employer in Milwaukee, and this expansion provides reassurance that they will continue to grow and compete in Wisconsin.

The Governor added that Milwaukee is home to 150 water-related businesses, and Coca-Cola’s presence helps in solidifying the region as the world’s water hub.

Coca-Cola is replacing a Dasani water line in the Milwaukee facility with a Smartwater product line. This will be Coca-Cola’s fifth U.S. Smartwater line, and the first in the central U.S. It makes Milwaukee a prime Smartwater distribution hub for West Coast markets.

As part of the expansion, Coca-Cola will also expand its warehousing capacity at the plant.

Metropolitan Milwaukee Association of Commerce (MMAC) President Tim Sheehy said Coca-Cola was one of the world’s most respected and recognized brands. Sheehy said they were pleased that Coca-Cola had chosen to expand their presence in Milwaukee and make a substantial investment in the community and region.

Sheehy noted that Southeastern Wisconsin had a thriving food and beverage industry cluster comprised of more than 250 companies that together had almost 15,000 employees and a $580 million payroll.

He said that Coca-Cola’s announcement reinforces the message that the metro Milwaukee region is the real thing when it comes to being a national and global leader in the food and beverage industry.

Coca-Cola alone has 400 employees in Milwaukee and 1,000 overall in Wisconsin.

Atlanta, Georgia-based Coca-Cola is the world’s largest beverage company, with more than 500 sparkling and still brands. Their products are sold in more than 200 countries around the world. Last year, Coca-Cola racked up revenues worth $48 billion that resulted in a net income of $9 billion.

Coca-Cola has 250 bottling partners and nearly 900 plants worldwide, and is one of the world’s top 10 private sector employers with more than 700,000 system employees.

Boeing’s Backup Plan РMove 777X Wing Assembly to Japan

Around 31,000 Boeing workers in the Machinists Union (IAM District 751) are voting today on whether to accept the new contract offered by the company.

MHI made Boeing 787 composite wing box

MHI made Boeing 787 composite wing box (photo – mhi.co.jp)

The result of the vote will decide whether Boeing locates its 777X aircraft assembly and carbon fiber wing assembly plants in Washington.

The Washington Legislature, called in by the Governor for a special session, has already approved an incentive package to facilitate the 777X project.

The package signed by the Governor, valued at $9 billion, includes an extension of commercial airplane tax incentives until 2040, and expansion of the sales and use tax exemption for construction material to manufacturing facilities for commercial airplanes and suppliers of wings and fuselages.

But in case the Machinists Union rejects the offer, Boeing will open negotiations with other locations for the project.

If this happens, Japan is being touted as the alternative location. Mitsubishi Heavy Industries (MHI) has made an offer to Boeing to build a new manufacturing plant for the 777X composite wing next to its existing facility in Nagoya where it currently makes the wings for Boeing’s 787 Dreamliner.

A Boeing executive mentioned during a press event in Tokyo that Boeing may move the 777X wing assembly to Japan if the union rejects the contract. Suppliers including MHI were present at this press event.

Japanese suppliers produce around 35 percent of the 787 Dreamliner, the first full-scale passenger aircraft for which MHI is making the composite wings. Their experience with the Dreamliner makes them capable of handling the composite wing assembly for the 777X too. Consolidation of the facilities required for the wings of both aircraft may also lead to additional cost savings.

But in that case, Boeing will have to forego the incentives approved by the legislature, since the bill that was passed includes a provision which says that Boeing will lose its preferential B&O tax rate for the 777X project if the 777X assembly and wing assembly are not located in Washington.

Japanese suppliers could still expect to get around 20 percent of the total work on the 777X project even if the Machinists Union approves the contract and Boeing goes ahead with its plan to locate both the 777X assembly and wing assembly plants in Puget Sound, Washington.

APLU Economic Prosperity University Awards

The Association of Public and Land-grant Universities (APLU) has announced the winners of its inaugural Economic Prosperity University Awards (IEPA).

Winners of APLU Economic Prosperity University Awards

Winners of APLU Economic Prosperity University Awards (photo – aplu.org/blog)

The four winners are the State University of New York (SUNY), Northern Illinois University (NIU), University of Michigan (U-M), and the University of Cincinnati (UC).

The winners were announced and given awards during APLU’s 126th Annual Meeting in Washington, D.C.

SUNY and U-M won the awards in the “Innovation” category, while NIU won an award in the “Place” category. UC was given the “Overall” award.

These four winners were chosen out of a pool of 16 educational institutions that APLU had recently designated as Innovation & Economic Prosperity Universities.

SUNY and U-M were given the “Innovation” award for outstanding work in business development, technology transfer and entrepreneurship.

SUNY Chancellor Nancy L. Zimpher accepted the award and delivered a keynote address to the more than 2,000 attendees.

Chancellor Zimpher said that winning the APLU Award is further confirmation that universities, and especially university systems, have a profound capacity for moving the dials on economic development and quality of life through partnerships with government entities, industry and business.

University of Michigan Vice President for Research Stephen Forrest said it has been a top U-M priority for several years to strengthen the relationships and processes across the campus and within Michigan and beyond that help them catalyze the economy’s continuing vitalization.

The “Place” Award was given to Northern Illinois University for excellence in social, community and cultural development work.

NIU President Douglas D. Baker said engagement with their regions and communities has been one of the defining characteristics of the top public universities in America. He said it was a tremendous honor to be held up as one of the best in this endeavor, in the company of some of the finest institutions in the country.

The ‚ÄúOverall‚Äù award went to Ohio‘s University of Cincinnati¬†for making the best connections between all university-engaged economic development areas, as defined by APLU.

Dorothy Air, UC Associate Vice President for Entrepreneurial Affairs and Technology Commercialization, said that for them, the value of the IEPA process was not about competing for the award. She said the self-assessment tools and development of the growth plan for the process were now being used by the University for strategic planning, and would continue to have an impact even after the IEPA process ends.

This is a reference to recent efforts by the APLU’s Commission on Innovation, Competitiveness, and Economic Prosperity (CICEP) to get public universities to conduct a self-study about their engagement in regional economic development using CICEP’s assessment tools.

All the applicants for the Innovation & Economic Prosperity University designation and awards had to conduct this self-study, identify three areas of strength, and develop case studies reflecting these strengths.

Missouri Proposes End to Incentives “Border War” With Kansas

During an address to the Greater Kansas City Chamber of Commerce, Missouri Governor Jay Nixon announced a proposal for ending what he calls the “border war” of incentives between Missouri and Kansas, and for jointly promoting growth in the Kansas City region.

Kansas City economic development

Kansas City economic development (photo – thinkkc.com)

The main point of contention is about line-jumpers – companies located in the Kansas City metropolitan area that get incentives by simply relocating across the state line while staying put in the Kansas City metro area and not creating any new jobs.

Currently, both states provide such incentives and treat the relocated jobs as newly created jobs. Gov. Nixon said it was bad for taxpayers, bad for the state budgets, and bad for the economy, and it hampers the region’s ability to compete on a global level.

He said the problem unique to the region is the result of a flaw in the incentive programs of both states, and they have a shared responsibility to fix it.

Gov. Nixon then outlined the proposal he has made to Kansas to fix the issue:-

1. An immediate moratorium on discretionary incentives for projects where jobs are merely being relocated across the state line.

2. Governors and legislatures in both states to work on a permanent moratorium mandated by law.

3. Local officials should be encouraged to avoid similar counterproductive use of local tax dollars.

4. Leverage both states’ combined resources to promote the Kansas City region as a whole.

Gov. Nixon cited several examples of the interdependent two-state economy in the Kansas City region. One was the Animal Health Corridor stretching from Columbia, MO to Manhattan, KS. It is packed with the world’s largest concentration of animal health companies for whom the state line was irrelevant.

Gov. Nixon also cited the example of automotive supplier Yanfeng USA, which is building a factory in Riverside, MO. Yangfeng’s biggest customer is the GM Assembly and Stamping Plant in Fairfax, KS.

The $600 million Fairfax plant expansion announced by GM in Jan 2013 pushed Yangfeng to increase manufacturing capacity in Riverside by building a new $45 million production facility and creating 263 new local jobs.

Gov. Nixon said such expansions were a win for the region and for both states.

He said while Missouri and Kansas were engaged in petty skirmishes along the state line, they were losing the global competition for the jobs and industries of the future.

He added that every dollar spent moving a job from one part of the region to another was a dollar they could have spent on creating new jobs, strengthening research and infrastructure, or marketing Kansas City’s advantages to the world.

Most importantly, said Gov. Nixon, this was a dollar not spent on investing in students and schools – the best economic development tools for competing and winning in the global economy.

Yahoo Considering Champaign, IL Research Park For Expansion

Sunnyvale, California-based Yahoo! Inc. (NASDAQ:YHOO) is growing, and is planning a strategic expansion aimed at hiring highly-skilled workers at different Yahoo locations.

Yahoo facility at University of Illinois Research Park

Yahoo facility at University of Illinois Research Park (photo – researchpark.illinois.edu)

One of the locations they’re considering for an expansion is the University of Illinois Research Park in Champaign, IL, where Yahoo already has a facility.

If Yahoo goes through with it, they will double their office space and hire 200 new employees who will get a starting pay of over $75,000 per year. Most of these jobs will be created within the next two years.

Yahoo already has more than 90 employees at the existing 24,000-square-foot facility, so the expansion would triple the workforce.

Yahoo is considering other locations too, including a building in downtown Champaign. The company has been engaged in negotiations with the Illinois Department of Commerce and Economic Opportunity (DCEO) since June for an expansion in Illinois.

Yahoo is seeking incentives from DCEO and the City of Champaign. Fox Development Corporation, the Research Park’s developer, is offering Yahoo a lease on a proposed 40,000-square-foot building for the expansion.

In order to secure the Yahoo expansion, the City of Champaign has offered a $3 per-square-foot incentive for all the new space Yahoo will occupy, and a $1,000 per-new-employee incentive.

The details of the arrangement have not been decided yet, including when Yahoo would be eligible to start receiving the incentives, how much the required minimum pay for the jobs should be, and the period for which Yahoo would need to retain them.

However, Yahoo has already started the hiring process, and expects the new jobs being created to be eligible for incentives from Champaign or any other location they choose. The State of Illinois has approved state incentives for the project, and is taking into consideration the new jobs being added by Yahoo since June into the incentive package.

Also, since the site falls under the Champaign / Champaign County Enterprise Zone, the project is eligible for an exemption of state and local sales tax on purchase of construction material, and also for a five-year abatement of the property tax increase resulting from the improvements.

Yahoo executives from California and Indiana have been asked to attend a City Council discussion and answer questions about the project.

P&G Subsidiary iMFLUX Planning $50M Headquarters in Hamilton, OH

Back in September, the Ohio Tax Credit Authority (TCA) had announced that P&G subsidiary iMFLUX Inc. had been approved for job creation tax credits for a project under which the company would create 221 new full-time jobs.

iMFLUX HQ in Hamilton, OH

iMFLUX HQ in Hamilton, OH (photo – hamiltonohiobusiness.com)

iMFLUX Inc. holds patents for innovative injection molding technology that has the potential to revolutionize the packaging industry.

The company is establishing a new headquarters in the City of Hamilton, OH.

iMFLUX will spend $50 million to purchase machinery and equipment, and the company will relocate from its current location at P&G’s Beckett Ridge Technical Center in West Chester Township.

iMFLUX has signed a long-term lease for the former Hamilton Fixture facility at 3550 Symmes Road. Hamilton Fixture shut down its operations at this site in May 2012, in the process eliminating 100 jobs in Butler County.

The new headquarters of iMFLUX housed in the 317,542-square-foot building will include manufacturing and demonstration facilities, along with an R&D Center.

iMFLUX will relocate around 30 existing positions from West Chester to Hamilton, and create an additional 200 jobs in Butler County by 2017, increasing their payroll by $17.5 million.

The project was secured by the City of Hamilton and the State with a generous package of local and state incentives. The Ohio TCA approved iMFLUX for a 60 percent, eight-year Job Creation Tax Credit (JCTC) worth around $2.6 million.

The City of Hamilton awarded a matching 60 percent, eight-year JCTC for iMFLUX. The City has also offered a $100,000 forgivable loan linked to the company’s job creation plans, in addition to a 75 percent property tax abatement for a 10-year period on the property’s new valuation.

iMFLUX is also being provided cheap power for a 10-year period at a rate that is 10 percent lower than Duke Energy’s standard service offer rates. The City will additionally certify that the energy consumed by iMFLUX is from a 100 percent green/renewable source.

All these local incentives are slated to be approved at a Hamilton City Council meeting scheduled to be held on Nov 13, 2013.

iMFLUX Inc was formally incorporated in Aug 2013 by Procter & Gamble (NYSE: PG). iMFLUX holds injection molding patents which P&G says will save their group businesses $150 million annually in cost savings, and avoid another $50 million in capital expenditures.

UN Climate Change Conference COP19 – World Ready For Climate Change Deal

The United Nations Climate Change Conference (Nov 11-22, 2013) kicked off in Warsaw, Poland with an enhanced sense of urgency in the shadow of Typhoon Haiyan’s devastation in the Philippines.

Christiana Figueres opening address at COP19

Christiana Figueres opening address at COP19 (photo – UNFCCC/Jan Golinski)

In her opening address, Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC), told the 19th session (COP19) participants from 195 nations that “the world is ready” for a climate change deal.

Figueres said there is a groundswell of climate action, not just for environmental reasons, but also for energy, economic, security and governance reasons. Figueres noted that public support and political will now favor climate change action.

One of the main issues that will take center stage in the negotiations over the next 10 days is the way forward on the establishment of the $100 billion Green Climate Fund (GCF).

The GCF is one of the key components of the international climate change agreement. Developed countries have agreed to mobilize $100 billion annually by 2020 to fund efforts made by developing countries to tackle climate change.

The framework for the fund is almost done, and the pledging process is scheduled to begin in Sept 2014.

Another key point of discussion will be about laying the groundwork for the international climate action agreement that UNFCCC participants agreed to establish by 2015 when they met a couple of years ago in Durban, South Africa. This agreement is now scheduled to be put in place at COP21 in Paris in 2015.

U.S. Special Envoy for Climate Change Todd D. Stern explained what the United States is doing, and what they hope to achieve from the climate change negotiations at COP19.

Stern said the U.S. has or will provide $2.7 billion in public climate finance for Fiscal Year 2013 in support of climate change mitigation and adaptation actions in developing countries.

Apart from the UNFCCC negotiations, there are a significant number of high-profile events being held in Warsaw timed to coincide with COP19.

The U.S. Center, a State Dept. initiative, has put together a packed program schedule at Warsaw involving various federal agencies and departments including NASA, NOAA, DOE, DOT, DOS, USDA, USAID and others to highlight their climate change programs.

In fact, the U.S. Center also has one event in its lineup sponsored by the California Governor’s Office. The session on “Local Leadership Creating Resilient Communities” will focus on how significant progress is being made on resilience through the State of California’s emerging collaboratives at the regional level, and through local government leadership.

This session will highlight work being done on climate change throughout the U.S., and explain options that can be translated as a platform for communities worldwide.

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