Posts by: Economic Development HQ.com

Nikon and SUNY NanoCollege Announce $350M Partnership

Nikon Corporation and the SUNY College of Nanoscale Science and Engineering (CNSE) in Albany, New York have entered into a public-private partnership to invest $350 million for developing lithography technology on the next generation 450mm wafer platform.

G450C at SUNY CNSE

G450C at SUNY CNSE (photo – cnse.albany.edu)

The project will create more than 100 high-paying tech jobs, with positions being filled by CNSE, Nikon and other industrial partners in the project who will be providing some of the funding.

The $350 million will be spent over the next five years on tooling and setting up the project, followed by spending for operations, maintenance and support.

Nikon will be locating engineers, scientists and researchers at CNSE’s NanoTech Complex, where they will provide lithography technology services to accelerate development of 450mm technology.

With this partnership and their role in the project, Nikon officially becomes an associate member of G450C.

This global consortium was founded in Sept 2011 and led by CNSE. G450C brought IBM, Intel, Samsung, TSMC and GLOBALFOUNDRIES together in a partnership with CNSE. The consortium aims to invest $4.8 billion in a bid to help the semiconductor and chip manufacturing industry transition from the existing 300mm wafer technology to the next-gen 450mm technology.

Kazuo Ushida, executive vice president of Nikon Corporation and president of Precision Equipment Company, said Nikon was honored to become a G450C associate member. He said this contract validated the consortium’s confidence in Nikon’s 450mm development program.

Dr. Alain E. Kaloyeros, senior vice President and CEO of CNSE, said they were delighted to join Gov. Cuomo in welcoming Nikon to the NanoCollege, where the company would expand G450C’s capabilities.

Gov. Cuomo said this new partnership was more proof that the state is a leader in nanotechnology research and innovation. He added that the technologies these corporations and CNSE are developing will allow New York to grow the economy, attract new investments and compete for high-tech jobs.

To date, the G450C program headquartered at CNSE has already created more than 150 jobs, with 75 positions being filled directly by CNSE in this year alone. The rest of the jobs were created by corporate partners in the program.

CNSE offers students a unique academic experience within the most advanced university-led research enterprise in the world where 300 corporate partners and more than $14 billion worth of high-tech investments have created a thriving nanotechnology R&D and commercialization ecosystem.

Palm Beach County Meeting to Approve OpenPeak Incentives

The Board of County Commissioners of Palm Beach County, Florida, is meeting today to decide on incentives for an expansion project by OpenPeak, Inc.

OpenPeak

OpenPeak (photo – openpeak.com)

OpenPeak, a mobility technology provider which is already based in the county in Boca Raton, FL, is proposing to invest $4.3 million and create 100 new high-paying jobs.

The new jobs will have average annual wages of $93,000, not including benefits. This is 224 percent higher than Florida’s prevailing average annual wage.

OpenPeak already has 95 employees in Boca Raton, out of an overall total of 108 employees.

OpenPeak offers touch-screens and device management platforms to its corporate customers and service providers who can then interact with their end-users while they are mobile, at home or in the office. The proposed expansion is required because the company is transitioning from its hardware-based system to being a software company.

If the agreement with Palm Beach County is signed, the company would agree to create another 100 jobs within two years, and retain both the new and existing jobs for at least five years.

The county forecasts that the expansion will have a local economic impact of $18.47 million during the five year period of the agreement. In return, OpenPeak is being offered $700,000 in incentives under Florida’s Qualified Target Industry (QTI) tax refund program.

The State of Florida will be paying 80 percent of the QTI incentive, while Palm Beach County and the City of Boca Raton will pick up the remaining $140,000. Boca Raton has already approved its share of $70,000, and the Palm Beach Board of County Commissioners is expected to do the same later today.

The company had until now only been named as Project BTOP in order to maintain secrecy during the incentive application and site evaluation process. This was required since OpenPeak has not committed to Boca Raton just because they are already based in Florida and are being offered incentives.

OpenPeak has been looking at Boca Raton and sites in two other states for the expansion, and will announce their final choice after Palm Beach County approves its share of the QTI as a Job Growth Incentive (JGI) Grant, and then the State of Florida finalizes the full QTI.

Report – EDA Spent $2.7M Recovering from Non-Existent IT Risk

An audit report issued by the Office of Inspector General (OIG) at the U.S. Department of Commerce makes it clear that the U.S. Economic Development Administration (EDA) spent all of last year fighting a non-existent cyber-threat, in the process destroying their IT infrastructure.

EDA IT disruption

EDA IT disruption (Photo credit – eda.gov)

On Dec 6, 2011, DHS informed Commerce that it had detected a potential malware infection in the Department’s systems, localized to the Herbert C. Hoover Building (HCHB) network.

Commerce’s Computer Incident Response Team (DOC-CIRT) therefore informed EDA and the NOAA about the threat.

NOAA analyzed the threat, located a single infected component, cleaned it out and had it back working on Jan 12, 2012.

EDA had only two infected components, but the CIRT incident handler got hold of some wrong data and sent the EDA a full list of the 146 components within its network, instead of naming just the two infected components. As a result, EDA thought it had a widespread problem infecting its entire network, including the email server

A DOC-CIRT staffer realized the mistake later, and then CIRT sent a second notification which correctly noted that the EDA had two infected components. Unfortunately, they did not clarify that the earlier notification was wrong and should be ignored, so EDA thought this new notice was an addition to the previous one.

EDA then asked for its systems to be cut-off from the HCHB network. What happened after that has been pretty well documented here and here.

The OIG audit report adds more details about the appalling waste, including:-

- EDA spent more than $2.7 million, which is more than half of its annual IT budget, on recovery efforts;

- EDA destroyed more than $170,000 worth of desktops, printers, keyboards, mice, cameras and monitors.

Ironically enough, the EDA had to stop destroying the rest of its IT equipment worth more than $3 million only because they ran out of funds allocated for this effort.

Both the EDA and Commerce found out about the mistake only in Dec 2012, a full year after the initial incident, when OIG auditors looked at the two notices and then informed EDA that only two components had been infected.  .

Another saving grace was that the Commerce IT Review Board (CITRB) refused EDA’s request that it would need $26 million over the next three years for its IT recovery efforts. The EDA had asked for some $17 million of their budget to be “repurposed” from disaster recovery and public works to their IT budget.

Instead, Commerce decided to step in take over the EDA’s IT recovery efforts. Starting in Feb 2013, it took them only five weeks to restore the EDA’s former capabilities. This was after the EDA had spent a year destroying their own network and equipment and spent $2.7 million trying to replace it from scratch.

The audit report faulted the DOC-CIRT incident response handler, who they said did not have the requisite qualifications or experience for the job. The OIG report also noted that deficiencies in EDA’s IT security system led them to easily believe they did face a threat.

The report also said that even under the mistaken belief of a threat, there was no need for EDA to shut down its email server because it was not connected to any other network servers and could have been kept operational as the (non-existent) infection was dealt with.

Read the full OIG report – Download (pdf)

NYS Comptroller Report – ESDC Needs to Monitor Foreign Offices

New York State Comptroller Thomas P. DiNapoli today released an audit report on foreign office spending by the Empire State Development Corp. (ESDC).

Empire State Development

Empire State Development (photo – esd.ny.gov)

As per the report, ESDC paid $2.7 million to seven foreign representatives from April 1, 2010 to March 31, 2012 to cover expenses associated with ten international offices.

Way it works is that ESDC contracts with representatives to operate its foreign offices and provide services that help attract investments, and to help NY businesses develop their foreign markets and expand exports.

Six out of the ten offices in question have been closed in the interim due to budget constraints, and ESDC currently has contracts only with representatives in Canada, South Africa, Israel and the United Kingdom.

The report says performance monitoring and reporting efforts by ESDC were ad-hoc and informal. The auditors say that although ESDC did provide information about international investment and trade successes, it was limited to the latest year.

They claim that some of the performance data pointed towards results not required in the contracts, and appeared to have been provided as a response to requests by the auditors. The report also suggests that the absence of rigorous performance monitoring could actually have contributed to the poor performance of some international offices.

The Toronto office had apparently provided an export sales projection of $1.2 million, but only managed to provide actual export sales of $175,000. The office in Turkey had a clean slate with zero export sales.

After a similar audit last year, ESDC had changed some of its practices, asking foreign representatives to provide vendor invoices and bank statements in order to claim expenses.

In this year’s report, DiNapoli says ESDC, having downsized its international presence, should now focus on monitoring the performance of its remaining offices to ensure they are meeting contractual obligations and operating in a manner that benefits the New York economy and its companies.

The report includes ESDC’s response (begins on pg. 11), agreeing that greater consistency and improvements are needed for monitoring of foreign representative contracts and performance tracking. To help in this effort, ESDC is implementing a client resource management system (CRMS) to aid data collection and reporting.

The seven page response, penned by Ed J. Hamilton, senior deputy commissioner for Finance and Administration at ESDC, provides valid answers to some of the Comptroller’s assertions.

In the case of the disparity between projected and actual export sales, he says that sales are often not realized for a year or more after the initial contact. The projection for a period may therefore not be actually reflected in that year’s results, but may come to fruition much further along in the contract cycle.

Hamilton also says that the suggestion in the report that lack of performance monitoring may have caused poor performance “is inaccurate, if not speculative, and could be misinterpreted…”

Read the full audit report – Download (pdf)

2013 EDAC Conference – Innovation on the Edge

The Economic Developers Association of Canada (EDAC) 2013 National Conference is scheduled to be held Sept 21-24, 2013 in St. John’s, Newfoundland.

EDAC 2013 National Conference

EDAC 2013 National Conference (photo – edac.ca)

This year’s conference, under the theme of “Innovation on the Edge,” aims to unearth creative approaches and generate fresh ideas for economic development at the local, regional and national level.

It will obviously reflect ideas focused around innovation – not only related to technology, but also regarding different ways of doing things.

The format for conveying successful initiatives includes not just panels and keynote speeches, but also study tours.

After the opening day welcome events, the conference starts off with the EDAC AGM on Day 2, and then the opening plenary by Zita Cobb, founder and president of Shorefast Foundation, a charitable organization encouraging growth and revitalization in the Fogo Island and Change Islands region.

The cultural development and film industry panels will be followed by six different “Best Practices in Economic Development” presentations.

One of the presentations is from Don Eastwood, director of Development Services, Town of Innisfil, and Ms. Rachel Sullivan, the town’s Economic and Community Development Officer. The subject of their presentation is “Community Building: Where Disruptive = Productive.”

Another presentation titled “What Can Happen Despite Best Laid Plans” will be made by Jerry Sucharyna, the economic development officer for the District of Lillooet, Lillooet, BC.

Day 3 begins with a panel presentation on airports as engines of economic development, followed by a speech on the KPMG Competitive Alternatives Study. The third event for the day is a speech by Dr. David Freshwater, University of Kentucky, who will talk about economic development trends and innovation.

After lunch and the Marketing Canada Awards presentations, attendees will leave Delta St. John’s for study tours.

Day 4 is all about innovation, including an innovation panel and another session on incubators.

What: EDAC 2013 National Conference

When: Sept 21-24, 2013

Where: Delta St. John’s Hotel and Conference Center, St John’s, NL, Canada

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. 

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