Economic Development

Indiana Pulls Support for $1.8B Posey County Fertilizer Project

After four months of indecision, Indiana finally made the choice to pull the plug on state support for the $1.8 billion Midwest Fertilizer Company project.

Fertilizer

Fertilizer (photo – nih.gov)

Pakistan-based Fatima Group has 48 percent stake in the company, and the project had been on hold since January 2013 due to national security concerns.

Here’s a brief timeline of events that led the state to withdraw support for the Posey County project after approving incentives and $1.3 billion in financing through bonds.

On November 30, 2012, the Indiana Economic Development Corporation (IEDC) offered an incentives package to Midwest Fertilizer Company.

The exact amount or nature of the incentives has not been disclosed, but it would have been considerable given the scale of the project which was supposed to create 2,500 construction jobs over three years, followed by more than 300 high-paying permanent jobs.

Apart from IEDC and the Indiana Governor’s Office, the company had been working with the Economic Development Coalition of Southwest Indiana and the Posey County Economic Development Partnership.

On December 20, 2012, the Indiana Finance Authority issued $1.259 billion worth of Indiana Finance Authority Industrial Development Revenue Bonds, with the proceeds going into escrow to be loaned to Midwest Fertilizer Company as financing for the project.

What’s notable about this is that these bonds were made available to Indiana under a federal disaster aid program that was slated to expire in 10 days at the end of the year, so they were perhaps rushed into a huge decision that probably should not have been made so quickly.

Immediately after that, state officials found that a U.S. Dept. of Defense official had testified before Congress that the Fatima Group had not been cooperating with efforts to reduce IED threats in Asia. Their fertilizer was apparently being used as an ingredient to build bombs, and the company was not doing enough to keep track of their supplies or change its formula so that it could not be used this way.

On January 15, 2013, a day after he took office, Governor Mike Pence ordered the project to be put on hold pending a review.

This review has been ongoing for the last four months as local economic development officials put pressure on the Governor to approve the project, and the company began cooperating to do what the DoD required of them.

Again, Indiana was being rushed into a hasty decision because there was a legal deadline for the $1.3 billion in escrow to be made available to the company in July, or the project would have to be scrapped.

On May 17, 2013, Gov. Pence issued a statement explaining that he had ordered the IEDC to withdraw support for the project.

He said he did not take the decision lightly, and added that while economic development was important, the security and safety of soldiers in harm’s way was more important.

On the same day, IEDC President Eric R. Doden sent a letter to Feisal Beig of the Fatima group notifying them of the withdrawal of incentives for the project.

Midwest Fertilizer Corporation issued its own statement, also on May 17, expressing disappointment at the announcement, but also noting that they would continue to work with the Economic Development Coalition of Southwest Indiana and the Posey County Economic Development Partnership to explore options to build the plant without state support.

Elevate Chicago – $1.1B Infrastructure Redevelopment Plan

Chicago, Illinois Mayor Rahm Emanuel announced a $1.1 billion tourism and tradeshow infrastructure redevelopment plan called Elevate Chicago.

Rendering of Headquarters Hotel in McCormick Place entertainment district

Rendering of Headquarters Hotel in McCormick Place entertainment district (photo – .cityofchicago.org)

It combines previously announced investments worth $470 million with another $640 million for the redevelopment of Navy Pier and creation of an entertainment district at McCormick Place, which is Chicago’s convention center.

The project will create 3,700 permanent jobs and another 10,000 construction jobs, and is expected to fuel economic growth to the tune of hundreds of millions of dollars every year.

The plan calls for a new 10,000 seat events center, along with two hotels, shops and entertainment venues that are expected to fuel revitalization of Motor Row and other neighborhoods in the vicinity.

One of these hotels is the previously announced 1,200-room Headquarters Hotel and the other one will be a 500-room boutique hotel.

The City and local government agencies would be able to use the venue free of rent for events such as public school contests, graduations, etc.

The improvements and additional facilities will attract more tradeshows and conventions to Chicago, with a skybridge connecting McCormick Place West to the events center, which can be used as a general sessions hall for conventions.

The Navy Pier, already one of Chicago’s popular attractions, will be getting a comprehensive redesign of its public and commercial spaces just in time for its centennial. The $278 million redevelopment plan calls for urban landscaping, pocket parks, social areas and dramatic use of water features.

Marilynn Gardner, president and CEO of Navy Pier Inc, said they were taking what is good and making it great.

The events center arena and surrounding entertainment district is a public-private partnership, with the Metropolitan Pier and Exposition Authority (MPEA) and DePaul University sharing the $140 million cost of constructing the events center.

This will be matched with $400 in private investments to build the two hotels, restaurants and other venues included in the plan for the entertainment district.

Jim Reilly, CEO of McCormick Place, said they needed the events center and assembly hall in order to attract conventions and shows to Chicago and Illinois that were currently going to competing cities that already had such events centers.

Upon completion of the project, the increase in the number of conventions and events, and the resultant increase in hotel demand, is expected to generate an additional $108 million annually for the City of Chicago.

Mayor Emanuel said that the Elevate Chicago plan was a vital step towards realizing the full potential of the City. He said these projects would serve as a major economic engine and would have a lasting impact on the city for generations.

NY Kicks Off $760M Third Funding Round for Regional Councils

New York today officially launched the 2013 round of competitive economic development funding for the state’s ten Regional Economic Development Councils (REDCs).

NY Regional Councils

NY Regional Councils (photo – regionalcouncils.ny.gov)

This is the third round of funding for the REDCs under the Consolidated Funding Application (CFA) process.

The first two rounds over the last two years have committed $1.5 billion for more than 1,400 projects, which has helped create and retain around 75,000 jobs.

This time, the REDCs will be getting a total of $760 million in funding and tax incentives. Out of this, $220 million will be competitive funding, including $150 million in grants and $70 million in the form of tax incentives.

Five of the REDCs billed as “top performers” will get $25 million each out the $150 million, while the other five REDCs will be competing for the balance of $25 million. Each REDC will also be eligible to get a maximum of $10 million in tax credits.

The remaining $540 million out of the total of $760 million will be allocated through the CFA process to projects submitted by each of the Regional Councils.

NY Lieutenant Governor Robert J. Duffy, who is also the REDC Chair, said that the past two rounds of the competitive funding process have shown what a difference can be made to local economies by listening to regional community and business leaders.

Along with this announcement, New York also unveiled another competition for the REDCs. This competition, called Innovations Hot Spots, requires each Regional Council to come up with a plan for a business incubator to support startups and promote commercialization of academic research.

The incubator must be connected to a higher educational institution with a proven ability to transition projects from labs to the marketplace. Applicants must maintain and run the incubator for three years, and be capable of generating a 2:1 funding match based on the amount of state grants they get.

Five incubators will be approved this year, and another five in 2014. The ultimate aim of setting up these incubators is to attract more venture capital and research spending by private industries in New York.

Financial Restructuring Board Proposed for Distressed NY Local Governments

New York Governor Andrew M. Cuomo outlined a proposal for creating a Financial Restructuring Board to assist distressed local governments in managing their finances.

Gov. Cuomo proposes Financial Restructuring Board

Gov. Cuomo proposes Financial Restructuring Board (photo – NY Governor’s Office)

In his presentation, the Governor said that more money was not the solution.

He said the state’s AIM (Aid and Incentives for Municipalities) program neither reflects performance nor the needs of local governments, even though it accounts for a huge share of the big city budgets (excluding NYC).

For example, Buffalo’s $161.285 million in AIM funds makes up 33.21 percent of their $485.621 million FY 2013 budget. The percentages for Yonkers (24.46), Syracuse (24.07) and Rochester (18.06) are similarly high.

Gov. Cuomo said that it was time to stop talking about it, and start doing something. He added that Albany was different from Syracuse, which was different from Buffalo and Jamestown and so on.

The Governor said there was no one size fits all solution, and they needed to bring each one in and work with them to come up with an individual restructuring plan for each locality.

Jamestown Mayor Samuel Teresi noted that this was the first attempt ever at understanding the structural economic problems that cities and local governments in the Upstate region have faced for generations.

The plan involves the creation of a Financial Restructuring Board comprised of one restructuring professional from the private sector, accompanied by state officials including the Sec. of State, Budget Director, AG and Comptroller.

Their first task would be to come up with the standards for defining fiscally distressed local governments in New York. The eligible candidates could then request assistance from the board and work together to develop a restructuring plan.

The board would have $80 million to work with, allocated in the FY 2013-14 Budget for reorganization plans. If a local government accepts funding, the recommendations made by the board would be binding on the recipient.

Apart from drawing up detailed financial plans for several years, other measures the board is expected to push for include use of shared services, functional consolidation and mergers, and reduction in the number of public officials.

Washington Launches Aerospace Industry Strategy To Secure Boeing 777X Project

Washington Gov. Jay Inslee announced the launch of a statewide effort to make sure the Boeing 777X is built in Washington, a project which the Governor said would preserve and grow thousands of aerospace jobs in the state for the next generation.

Boeing's Everett delivery center

Boeing’s Everett delivery center (photo – boeing.com)

Making the announcement at the Future of Flight Aviation Center, Gov. Inslee also unveiled an “Aerospace Industry Strategy” to grow the state’s aerospace cluster and improve the business climate for aerospace companies.

The plan calls for certain actions to be taken over the next few months to demonstrate why Washington is the best choice for the 777X.

This includes a survey of industry leaders to find out what the state can do to improve its competitiveness, and an economic impact analysis to demonstrate the benefits that incentives provided to win the project would create.

Changes will be made to improve the state’s business climate, including a review of existing aerospace incentives.  In 2003, the state approved $3 billion in tax breaks for Boeing (NYSE:BA) over two decades to secure the first 787 assembly line. That 20-year period expires in 2024, but 777X production would continue well beyond that. The state may therefore approve an extension of these incentives as part of a new and broader incentives package.

A special emphasis is being placed on securing the new assembly plant that will be required for the 777X’s carbon fiber wings, which have a massive wingspan of 233 feet – bigger than any plane Boeing currently has in production or plans to build. The proposed design also calls for the wingtips to fold in order to reduce space required at airports.

The location of this hi-tech carbon fiber wing assembly plant would have to be close to the main 777X assembly plant. This means that any site which looks most suited to design and assemble the wing assembly will get the entire plane too.

One of Washington’s main competitors for this project would be South Carolina, which successfully wrested Boeing’s second 787 assembly line from Washington. South Carolina last month approved $120 million in incentives for a $1 billion expansion at Boeing’s North Charleston facility that would create 2,000 new jobs, of which more than 1,000 are engineering and production jobs.

Apart from growing the aerospace cluster and making regulatory changes to make it easier for aerospace companies to do business, Washington’s newly unveiled Aerospace Industry Strategy also focuses on infrastructure improvements and workforce training.

Bob Drewel, president of the Washington Aerospace Partnership which will be working with the state to implement all this, said that the 777X was hugely important to the aerospace industry in Washington.

Drewel said it would preserve the thousands of jobs of people currently working on assembly of the 777 in Everett and with suppliers spread all over the state, and ensure that machinists and engineers in Washington will be working on cutting-edge aviation technology for many decades to come.

Read Washington’s full Aerospace Industry Strategy – Download (pdf)

South Carolina Approves Film Rebate Bill

The Beaufort Chamber, Carolina Film Alliance (CFA) and other interested stakeholders in South Carolina’s film and television industry breathed a collective sigh of relief after SC Gov. Nikki Haley signed the Film Rebate Bill (S.163).

CBS legal drama Reckless

Reckless (photo – CBS Reckless Extras)

The bill’s future had been in doubt more than once, as it stalled in the state senate and the Governor had indicated ambivalence towards signing it into law even if the legislature approved it.

What finally tipped the scales in favor of its fast-track passage through the legislature and quick signing by the Governor was “Reckless” – a CBS television show about lawyers that is in the works.

The pilot for the legal drama was filmed at Studio Charleston in Charleston, SC, but the producers said they might shift the filming of future episodes to Savannah, Georgia, and were planning to decide on the location by mid-May.

The show needs a historical southern background which can easily be found in both Charleston and Savannah. Filming of the show will generate spending worth $60-$70 million per year.

The bill, sponsored by Rep. Phyllis Henderson in the House and State Senator Paul Campbell in the SC Senate, hikes rebates on supplies purchased from vendors in South Carolina to 30 percent, which is double the earlier 15 percent.

Payroll tax refunds offered to the film companies have similarly been hiked up to 25 percent for South Carolina works, and 20 percent for out of state workers. These incentives are available only to production companies that spend at least a million dollars in the state.

CFA President Richard Futch said that the passage of the bill sends a message to film makers around the world that South Carolina values the millions spent by film companies on local businesses, the jobs they create and their showcasing of the state’s geographic beauty on the big screen for the whole world to see.

He added that the world has already seen the beauty of South Carolina in films such as Forrest Gump and the Patriot, and South Carolinians should now gear up to be excited by more such iconic movies with a Palmetto backdrop.

US Launches $200M Competition for Three Innovative Manufacturing Institutes

The United States government announced the launch of competitions to select locations for three manufacturing innovation institutes that will be created with $200 million in federal funding.

Clean Energy Manufacturing Innovation Institute

Clean Energy Manufacturing Innovation Institute (photo – energy.gov)

The federal government’s plan to create these three institutes comes after the National Additive Manufacturing Innovation Institute (NAMII) was opened in Youngstown, Ohio as a pilot project.

The FY2014 federal budget includes a billion dollars to create a network of 15 such institutes called the National Network for Manufacturing Innovation (NNMI).

The three institutes for which proposals are being solicited are being funded with $200 million from the budgets of five agencies, including the Departments of Energy, Defense and Commerce, and from the National Science Foundation (NSF) and NASA.

The three new institutes are:-

Digital Manufacturing and Design Innovation (DMDI);

Lightweight and Modern Metals Manufacturing (LM3I); and

Next Generation Power Electronics Manufacturing (CEMI – Clean Energy Manufacturing Innovation).

The first two will be lead by DoD, while the power electronics institute will be lead by the Energy Department.

DoD will put up $50 million each for DMDI and LM3I, with the other aforementioned agencies chipping in for a total of $70 million in funding for each institute.

This funding requires a minimum of 1:1 matching funds committed by the consortiums applying to be selected to host an institute, so each institute will kick off with an initial public-private funding commitment of at least $140 million in total.

These institutes have the power to radically transform the manufacturing sector and raise the global competitiveness of small and medium-sized businesses in the U.S.

For example, implementing the DMD environment would create savings to the tune of $30 billion over 15 years for the commercial aviation sector alone. This “digital thread” concept can similarly be implemented across all manufacturing industries, and is expected to decrease costs for the entire sector by 10 percent.

Similarly, LM3I will be helping to develop a supplier-base that can provide lightweight metals at scale. The demand for these metals is being driven partially because the automotive industry needs these metals to produce vehicles conforming to the required fuel efficiency standards of 35.5 mpg by 2016, and CAFE standards of 54.5 mpg by 2025. Raising the standard to 35.5 mpg is expected to save a total of 1.8 billion barrels of oil over the lifetime of all the vehicles covered.

The DOE’s CEMI will be pursuing the economic and technological transformational promise of wide bandgap (WBG) semiconductor materials, which are smaller and faster, and provide higher energy efficiency in power electronics and clean energy technologies. WBG is expected to get an $84 billion share of the global lighting market by 2020, and that’s just one application area.

Read more about the aims of DoD’s DMDI and LM3I institutes, and an overview of WBG from the DOE.

New York Announces Plan to Create Resort Gaming Destinations

New York Governor Andrew M. Cuomo unveiled a plan to create resort gaming destinations in Upstate New York, which he said would be the core of a strategy to combine economic development, tourism and Upstate revenues.

NYS Tourism Summit

NYS Tourism Summit (photo – NY Governor’s Office)

As per the plan, Upstate New York will be divided into six regions (see map), and they would be competing for three casino resorts, with no more than one resort allowed in a region.

The evaluation criteria for selection of the destinations include the number of jobs the project would create, the capital investment committed (floor of $250-$500 million), projected revenues for the local and state government, franchise fee, local support, and a plan to integrate the project with regional tourism.

Winning projects would be provided an exclusive license to operate in the region for five years, and no additional casinos would be allowed in New York City and Upstate. The host community and county would each get 10 percent of the revenues, while the state would get 80 percent.

This revenue would be used to add to education funding in addition to the annual formula, and for providing property tax relief and local cost reimbursements.

The location selection process for the casinos would respect the exclusivity of the three existing Indian gaming sites in the state.

Gov. Cuomo said this was a unique opportunity to revitalize the local economies of Upstate communities and create thousands of jobs. He said that New York’s neighbors such as Connecticut and New Jersey have benefited for years from New Yorkers going there for gaming, and he wanted to reverse the trend to attract more visitors and tourists.

New Jersey has 35,000 direct gaming industry jobs, and additionally supports 100,000 indirect jobs. The gaming resorts in New Jersey spend $2.3 billion which goes out to more than 2,000 suppliers all over the state.

The tourism industry in New York already employs more than 700,000 workers and generates $57 billion in annual spending, resulting in $7 billion in local and state tax revenues.

In addition to the resort gaming plan, New York is also planning a $60 million tourism campaign, which was announced yesterday following the first-ever NYS Tourism Summit. This year’s outlay for promoting tourism is more than thrice the $19 million spent last year.

Under the plan, Upstate tourism will get free advertising space from the MTA and Port Authority worth $2 million, to put up thousands of posters on subways, buses, airport arrivals and at kiosks. The Times Square Alliance has additionally agreed to provide the state with space in the visitor center for marketing attractions.

Will the Startup Act 3.0 Lead to Greater Job Creation in America?

The current economy in the United States resides in a struggle beyond the words full comprehension. With each passing year come families in struggle, looking for a way to skate by, for some form of economic growth. A recent discussion amongst Senators on Capitol Hill has led to an idea that offers a resolution with the potential to directly resolve this problem. This was the beginning of an idea being put into motion called the Startup Act 3.0.

Startup 3.0 is a bill that will grant “Alien” entrepreneurs a working visa to work within the United States, as long as they meet certain criteria. They must employ 2 non-family members full-time and invest/raise capital of at least $100,000 in the time-span of one year. This is an agreement that solves the immigration problem that the United States finds itself in constant quarrel about, and also gives a promising future to their current economic status.

In a country that has had a loss of businesses worldwide, it is a chance for entrepreneurs everywhere to step up and make a name for themselves. The bill would offer 75,000 work visas and have no country cap, allowing the recruiting of top-standard qualified individuals without any “red tape”, so to speak.

With this bill being put into heavy consideration, the United States labels the job growth potential over the next 10 years to be anywhere between 500,000 and 1.6 million jobs. It is labeled to have a 1.6 percent effect on GDP which in American dollars comes out to be $224 billion dollars in economic activity. In a world that claims to live and work off openness to diversity, the amount of good that can be offered from the passing of a bill couldn’t be much higher than this one.

Currently the United States continues to sink into a vast depression of unemployment rates that don’t seem entirely accurate, and a strong recognition of struggle as opposed to getting by. Entrepreneurs such as Bill Gates led a revolution in the very making of the American economy, so knowing the impact one strong company can make, why not take it a step further and allow it to truly flourish by allowing what is currently holding it back. With global recruitment it leads to alternatives that we may not even fully be aware of, and sometimes a surprise is good enough to completely rewrite a bad chapter in history. This could be that time again.

With this Act put into place it would open an endless amount of possibilities. It would bring in additional options to current businesses, as well as create a sprouting growth to new ideas, new efficient processes of manufacturing and distribution. The list of possible gains could go on and on. Startup companies as of right now open up 3 million jobs a year, and when you take this option and put it into a global revelation, the outcome proceeding would leak of optimism and positive growth.

Back on point, will the Startup Act 3.0 lead to a greater job growth in America? Absolutely. It isn’t a matter of whether it should be passed, it is a matter that it needs to be passed. With an economy struggling and an idea that several countries already actively participate in, it’s a matter of pure observation. Taking in the fact that other countries have done it and it is leading to successful businesses and job growth, it’s time for the United States to step up and fix what everyone is pleading for them to resolve. This Act could be the answer to a decade-long struggle.

Richard McMunn is a writer for How2become; a leading career and recruitment specialist for public sector careers. For the last 8 years How2become has helped numerous people prepare for and pass tough recruitment processes and assessment centres in order to secure their dream job. You can also connect with How2become on Google Plus

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