Economic Development

Economic Development Package of Bills Introduced in Pennsylvania Senate

A package of seven Pennsylvania economic development bills has been introduced by State Senator Rob Teplitz, with the stated intent of boosting job creation and retention.

Pennsylvania State Capitol

Pennsylvania State Capitol (photo – Sensor/wikimedia)

Teplitz, a new member of the PA Senate Community, Economic and Recreational Development Committee, said in a release announcing the legislative package that his bills would help ensure that the state effectively supports the private sector’s job creation efforts and that there is appropriate accountability to the taxpayers in return.

The centerpiece of the package is the Economic Development and Fiscal Accountability Act (SB 154). It requires the Pennsylvania Department of Community and Economic Development (DCED) to submit a unified economic development budget report to the General Assembly every year.

This report would need to detail everything from applications the state gets for subsidies to the actual revenue loss resulting from approved tax incentives, as well as state-related expenditures on economic development.

The bill also seeks to impose public disclosure requirements and add regulatory requirements for approval of grant funding, along with penalties for non-compliance.

Sen. Teplitz is reintroducing this bill following a previous attempt to get the same legislation passed in the previous session. That bill (SB 394) was referred to the Senate Community, Economic and Recreational Development Committee, but didn’t go any further.

This time Sen. Teplitz is on the committee, and this bill is a part of a package of seven bills. The other six bills are as follows:

SB 152 – Requires DCED to institute policies and procedures to improve the administration of the Pennsylvania First Program.

SB 155 – This is the Veteran’s Entrepreneurial Training and Support Act. It would create a training and support program to help veterans start and run their own small business.

SB 156 – This bill would offer targeted initiatives to promote participation by small and disadvantaged businesses in government contracting.

SB 157 – This bill creates a ‘Made in PA’ program to improve on the existing PA Preferred label program by including a broader range of products that are made in Pennsylvania.

SB 158 – This bill, while not exactly about economic development, seeks to prevent employers from penalizing employees who miss work when they respond to calls as volunteers for fire companies and ambulance services.

SB 159 – This bill creates the ‘Office of New Americans’ within DCED to coordinate services for immigrants and also promote the state in overseas markets to make Pennsylvania more competitive in attracting and retaining skilled workers.

FY 2016 Commerce Budget Includes $273M For US Economic Development Administration

The President’s Fiscal Year 2016 Budget includes $9.8 billion in discretionary funding for the U.S. Department of Commerce, including $273 million for the U.S. Economic Development Administration.

FY 2016 Budget

FY 2016 Budget (photo – whitehouse.gov)

The EDA budget includes, among other things, funding for:

- The Regional Innovation Strategies Program aimed at promoting economic development projects that spur entrepreneurship and innovation at the regional level ($25 million);

- Economic Adjustment Assistance where the EDA supports critical investments such as economic diversification planning and implementation, technical assistance, and access to business start-up facilities and equipment ($53 million);

- Partnership Planning to support local organizations with their long-term economic development planning efforts and outreach ($39 million); and

- Bolstering the agency’s role in coordinating federal economic development programs and expanding their on the ground presence to local communities through planning and technical assistance ($8 million).

Apart from funding for the Economic Development Administration, the Commerce budget funds an array of new and expanded programs aimed at boosting economic development, manufacturing and trade.

This includes $20 million to expand SelectUSA, and expansion of the National Network for Manufacturing Innovation (NNMI) with discretionary funding for seven new manufacturing innovation institutes and support to expand the network to 45 institutes.

Apart from these usual funding requests for agencies and their programs that are already underway, the FY 2016 Budget also unveils a couple of surprising new ideas.

One is the launch of a Scale-Up Fund to ensure that a technology invented in the United States can be made in the USA too. The budget proposes to fund this program through a public-private partnership that will help startup companies produce the goods they have developed.

The other major surprise in the FY 2016 Budget is a proposal to create a new federal department whose sole focus would be to foster economic growth and drive job creation. It would be created by spinning off several Department of Commerce business and trade functions and their related programs into a single new federal department.

At present, the proposal suggests (page 81) moving the following Dept of Commerce agencies into the new department – SBA, Export-Import Bank, Overseas Private Investment Corporation, the U.S. Trade and Development Agency, and the Office of the U.S. Trade Representative.

The budget proposal says this consolidation will allow businesses to more easily and seamlessly access services in support of exports, domestic competitiveness, and job creation.

Opportunity Austin Economic Development Initiative to Target Space Economy Growth in Central Texas

The Austin Chamber of Commerce announced at its annual meeting that space technology and exploration will be added as one of the key industries to be targeted through Opportunity Austin.

Space shuttle over Austin

Space shuttle over Austin (photo – ejmc/flickr)

The Opportunity Austin economic development initiative was first launched in 2004 as a five-year effort to foster job creation and increased payroll in their five-county area in the Central Texas region.

The current five-year phase (2014-2018) of this strategy is Opportunity Austin 3.0, and one of its top priorities is economic diversification.

It was already designed to target several key industries for future economic development, including corporate headquarters and regional offices; advanced manufacturing; life sciences; data management; creative and digital media technology; and clean energy and power technology.

Opportunity Austin 3.0 will now also target the space economy as the region’s next step towards economic diversity and job expansion.

Opportunity Austin Chairman Phil Wilson, who is the general manager at LCRA, said in a release announcing the designation that Austin has always been at the forefront of driving innovation, and they recognize that the next great frontier for innovation in their community is space.

Wilson added that the emerging commercial space economy adds to the diversity of business in the region and has the potential for creating additional opportunities for other sectors like energy, medicine and cloud technology.

This designation as a key industry allows companies in the space economy to receive enhanced support and full access to program resources.

For example, companies will be connected with key assets throughout the region such as Texas State University’s PhD in Materials Science, Engineering and Commercialization (MSEC). The McCombs School of Business at The University of Texas at Austin is likewise introducing a master’s degree in space entrepreneurship later this year.

Dr.Gary Cadenhead, director of the University of Texas at Austin’s MSTC Program, said in the release that this innovative addition, along with UT’s outstanding Aerospace Department, will make Austin a premier location for space industry talent to further their educational goals.

A group of community leaders has already formed the Greater Austin Space Economy Task Force to explore the potential for a space economy in Central Texas.

Paul Baffes, chief architect for Change Management Innovation at IBM, is one of the co-chairs of the Task Force. Baffes said in the release that over 30 new space start-up companies are launched annually, and it is these small companies that are driving industry change.

Baffes added that Austin has a unique opportunity as a technology hub known for fostering innovation and growth, so they have decided to take a leadership role amongst cities and commit to the space economy.

The Greater Austin Space Economy Task Force will be convening soon to develop a strategic plan that supports Opportunity Austin and its new efforts targeting the space economy for economic development.

Michigan Economic Development Corp Update on Tech Startup Growth

The Michigan Economic Development Corporation announced that the number of tech startup companies in Michigan has more than tripled in the past four years.

Pure Michigan

Pure Michigan (photo – PunkToad/flickr)

This according to the annual metrics report from the MEDC’s Office of Entrepreneurship, Innovation and Venture Capital.

The report says that 248 new technology companies were launched in Michigan last year.

It also reveals that an average of 240 companies has been created annually in the last three years, along with an average creation of 1,100 new tech jobs each year.

This growth in the number of tech startups parallels the growth in the number of venture capital firms in Michigan, which has grown to 35 firms in the last five years. Even as the number of venture capital professionals doubled in Michigan during this period, their numbers decreased by 13 percent at the national level.

MEDC Vice President of Entrepreneurial Services and Innovation Paula Sorrell said in a release announcing these figures that a general trend they’re seeing in the ecosystem is that venture capitalists dedicated to Michigan are moving to larger funds or into more senior positions, or both.

Sorrell added that they’re also seeing that traditional investment groups are now interested in venture capital investing, and the number of early-stage tech companies has been growing over the last three years. “People are starting to view Michigan as a great place to invest in Michigan tech companies,” said Sorrell.

Private investment in new tech companies in Michigan added up to $710 million last year. Comparing this to the amount spent by the Michigan Strategic Fund on tech entrepreneurship last year shows that small tech startups are raising $35 from private and federal contracts for every Michigan economic development dollar they get from the MSF.

This doesn’t just happen on its own. MEDC’s Office of Entrepreneurship, Innovation and Venture Capital (EVIC) works to leverage private funds into early-stage tech companies. One of these startups that received assistance is Plymouth, MI-based ProNAi Therapeutics, Inc. The company is developing DNA (DNAi) interference technologies for cancer treatments.

ProNAi received Michigan economic development incentives through the 21st Century Jobs Fund, along with additional support from other EVIC programs. They were subsequently able to close on $59.5 million in Series D financing, which allows them to continue Phase II clinical studies for a drug that is being tested on patients with non-Hodgkin’s lymphoma.

Michigan also has an Emerging Technologies Fund that provides matching funds to Michigan-based companies that have been awarded federal funding for exceptional research and technical innovation.

The state’s network of SmartZones is designed to incubate growth of technology businesses and jobs. Accelerators such as Detroit-based NextEnergy and Wayne State University’s TechTown support tech startups all the way from incubation to commercialization.

Many of the state’s tech startups are the result of research conducted at Wayne State University, Michigan State University, and the University of Michigan, which are collectively called the University Research Corridor (URC).

Sorrell said in the release that no other state does what Michigan does in funding an entire entrepreneurial ecosystem that supports innovative early stage companies.

Canada’s Waterloo Region Gets New Economic Development Corp

With the development of their regional economic development strategy now complete, Canada’s Waterloo Region is now in the process of establishing the new Waterloo Region Economic Development Corporation (WREDC).

WREDS

Photo – wreds.ca

The organization’s primary funders, including the Region of Waterloo and seven area municipalities, are now seeking applications from interested community members for positions on the inaugural WREDC Board of Directors.

As a start, the Board will launch WREDC and hire its first CEO. The new organization will play a key role in coordinating the implementation of the Waterloo Region Economic Development Strategy (WREDS).

WREDS Advisory Committee Chair Gerry Remers, who is president and COO of Christie Digital Systems Canada, Inc, said in a statement that WREDS provides a common focus for all of the economic development partners in the Waterloo region, and will help the community support existing businesses and attract new investments.

The volunteer WREDS Board will have nine to 12 members, mostly from the private sector, selected based on skills, experience and their business and community networks.

The regional economic development strategy has already been approved in principle by the Region of Waterloo and the seven area municipalities – the Cities of Cambridge, Kitchener and Waterloo, and the Townships of North Dumfries, Wellesley, Wilmot and Woolwich. The WREDS includes a new vision and the strategic framework for providing economic development services throughout the Waterloo Region.

The four-phase process of developing the strategy was led by a steering committee comprised of the Region of Waterloo, the seven municipalities in the region, and Canada’s Technology Triangle Inc. Consulting firm Malone Given Parsons was hired to guide the whole process through to completion.

Canada’s Technology Triangle is a not-for-profit, public-private economic development partnership that was created in 1987 to market the Waterloo Region and attract businesses, investment and talent to the region.

The award-winning Kitchener, Ontario-based CTT Inc. has been listed for the last five years in Site Selection magazine’s annual list of the top Canada economic development groups.

CTT Inc. will continue to operate as a distinct entity for now, but may become a part of the Waterloo Region Economic Development Corporation once the new organization is operational next year and starts taking the lead in offering regional economic development services and coordinating with local governments.

Find out more about WREDC and the WREDS at wreds.ca.

Texas Governor Proposes Changes to Economic Development Programs

There might soon be some sweeping changes to at least a couple of key Texas economic development tools and incentive programs.

Texas

Texas (photo – dherrera_96/flickr)

Governor Greg Abbott, who has previously stated that the state’s deal-closing Texas Enterprise Fund needs to be reformed, is now proposing to eliminate the Emerging Technology Fund.

The Emerging Technology Fund (ETF) is a $485 million program that was first authorized by the Texas Legislature in 2005 at the Governor’s request, and has since been granted 2-year extensions four times.

Texas universities have been awarded $220 million in grant matching and research superiority funds through ETF, and more than $205 million has been awarded to over 145 early stage companies.

ETF funding has been able to leverage more than $2.2 billion in additional investments from other sources, in the process more than quadrupling the State’s investment.

If eliminated, the ETF’s unexpended balances would be split between a new Governor’s University Research Initiative and the Texas Enterprise Fund in order to enhance the State’s ability to recruit and retain businesses and job opportunities to Texas.

The Governor’s University Research Initiative will provide matching funds to higher educational institutions to help them recruit prestigious and nationally-recognized researchers like Nobel laureates and Members of the National Academy (or equivalent) to their faculty.

In a statement announcing the proposal, Gov. Abbott said that his plan will enhance Texas’ ability to recruit nationally-recognized researchers and promote economic development. The Governor said it would also serve as a significant step toward ensuring that Texas is home to five of the top ten public universities in the nation.

Gov. Abbott urged Texas universities and colleges to focus on recruiting nationally and internationally recognized STEM researchers. The Governor’s University Research Initiative will not provide matching funds for the recruitment of researchers from other public universities in Texas.

The Governor also said that Texas will continue to make meaningful and effective investments in job creation, but added that they must now also harness resources to elevate Texas’ higher education institutions as integral participants in the state’s economic advancement.

The Governor’s University Research Initiative requires legislative approval. Gov. Abbott has also stated that the Texas Enterprise Fund needs to be reformed, and has pledged to work with the Texas Legislature to improve the transparency, accountability, efficiency and effectiveness of the Fund.

LVGEA Annual Report on Southern Nevada Economic Development Achievements

The Las Vegas Global Economic Alliance has released its annual report highlighting its achievements and performance metrics for 2014 as the regional economic development authority for Southern Nevada.

LVGEA annual report

LVGEA annual report (photo – lvgea.org)

The report, released to coincide with their inaugural State of Economic Development Address, mentions that the LVGEA far exceeded job creation and capital investment targets by attracting 3,821 new jobs to the region in the last 12 months.

The 23 new business projects and 10 expansion projects the LVGEA helped secure for Southern Nevada last year account for $444 million in capital investments.

These projects will have an annual economic impact of $523 million on the region, and will generate $85 million in local and state tax revenue over five years.

As the regional economic development organization for Southern Nevada, LVGEA works with the Clark County and Las Vegas economic development divisions, along with those of North Las Vegas, Henderson, Boulder City, Mesquite and Laughlin.

These local government partners helped bring another 13 relocation and expansion projects to Southern Nevada in addition to the 33 LVGEA-assisted projects.

Missy Young, chairman of the LVGEA Board of Directors and executive vice president of Colocation at Switch, said in the report’s foreword that it’s hard to believe that it’s only been a little more than two years since a small group of business and community leaders formed what is now called the Las Vegas Global Economic Alliance.

In 2013, the LVGEA hired new staff, created a strategic plan and helped to coalesce the community around a regional economic development strategy. “In the last 12 months, LVGEA has transformed economic development and really delivered for our region,” added Young.

Among their other achievements for 2014 is the launch of BizCONNECT, a new program to help local businesses grow for which the LVGEA collaborated with more than 20 local partners.

They also set the stage for construction of more than 500,000 square feet of large industrial buildings by partnering with RCG Economics to release a report on the demand for large industrial buildings in Southern Nevada.

The LVGEA helped the Regional Transportation Commission of Southern Nevada in crafting a regional business plan for transportation infrastructure.

Global initiatives by the LVGEA included two overseas trips to four countries, including participation in the 13-member delegation of the Nevada Center of Excellence to Singapore which put them in the same room with representatives of more than 1,000 companies from more than 100 countries.

This delegation was part of an effort to launch an industry around water technology in Southern Nevada. The LVGEA also hosted 14 delegations last year, including four from China and one each from Hong Kong, Taiwan and Japan.

Read the full LVGEA annual report (pdf).

Wisconsin’s Pay Their Way Economic Development Plan For Milwaukee Bucks Arena

Wisconsin Governor Scott Walker announced a ‘Pay Their Way’ plan for funding the development of the Milwaukee Bucks Arena with a $220 million grant that protects the state’s taxpayers from risk.

Milwaukee Bucks

Milwaukee Bucks (photo – erik.aldrich/flickr)

The grant for the sports arena will be funded through bond issuance, to be paid back through the projected increase in income taxes from the Bucks and visiting teams, generated by their salary increases and new TV contracts.

The bond repayment will not touch current base revenues, and once the bonds are paid off, the new tax growth will also return to the state.

The Pay Their Way plan proposes the creation of a Sports and Entertainment district with the bonding authority to collect the taxes and pay back the $220 million grant.

Gov. Walker said in a release announcing the plan that this solution allows the state to make an investment in Milwaukee economic development while protecting Wisconsin taxpayers from risk.

The Governor added that the ‘Pay Their Way’ plan will help turn a great potential loss in revenue into the potential for great gain.

Without this state support, the Bears would likely relocate out of Wisconsin in a couple of years, leading to a loss of $10 million in annual income taxes alone for the state.

Not to mention the fact that the state would still need to come up with as much as $100 million in maintenance and debt service costs for the existing Bradley Center, and that too with no anchor tenant to drive sales and spending in the arena and local area businesses.

Under the terms of the Pay Their Way plan, the state will release the $220 million from the bond sale only after the arena project secures the rest of its funding ($300 million).

The sports and entertainment district will be governed by a board comprised of nine members appointed by the Governor and confirmed by the Wisconsin Senate. If the City and County of Milwaukee provide funding for the arena, they can each appoint one board member.

The district will not have the authority to issue bonds and levy or impose a tax. It will simply collect income tax revenue on the future contracts of the Bucks and visiting teams until the $220 million gets repaid. Existing base revenues being collected from the Bucks and visiting teams will continue to go to the state.

Bucks President Peter Feigin issued a statement in response to the announcement of this funding plan for the arena in which he says that “The governor’s support brings Wisconsin closer to creating a new state-of-the-art venue and entertainment destination that will become an economic catalyst for the entire state.”

Feigin added that they look forward to working closely with Gov. Walker, the state legislature, local officials and the entire community to make this vision a reality.

Chatham Park Development’s Economic Impact on North Carolina – $154B and 115,000 Jobs

An economic impact study conducted by North Carolina State University shows that the Chatham Park development will generate $154 billion in cumulative spending for the state by the time construction on the project is fully complete.

Chatham Park development economic impact study

Chatham Park development economic impact study (photo – chathamedc.org)

The study was commissioned by the Chatham Economic Development Corporation, the lead economic development agency for Chatham County, NC.

Chatham Park is a master-planned, multi-use sustainable community that is already under construction in eastern Chatham County, NC.

After full build-out, the 7,000-acre development will have 22,000 residential units and 2.4 million square feet of commercial space, along with 16.6 million square feet of office space. Not to mention 2.5 million square feet of civic, school, and hospital space.

The development includes nearly 2,000 acres set aside for parks and open spaces. It also includes more than 50 miles of walking and biking trails connecting the residential areas, offices and shopping zones, and providing direct access to Jordan Lake and the Haw River.

Highlights from the Chatham Park economic impact study:

Cumulative spending upon full build-out in 40 years – $80 billion for Chatham County, $140 billion for the Triangle region, and $154 billion for North Carolina;

Permanent Jobs Created – 61,000 jobs in Chatham County, 99,000 jobs in the Triangle region, and 115,000 jobs in North Carolina; and

Annual Tax Revenues – $146 million for Chatham County, $248 million for the Triangle region, and $442 million for North Carolina.

Chatham Economic Development Corporation President Dianne Reid said in a statement releasing the study results that “Chatham Park offers companies that are looking to relocate or expand their operations a marquee location in the Research Triangle region with direct access to highly educated talent from some of the country’s top universities.”

Reid added that this project will quadruple the number of permanent jobs in Chatham County, and will also double the county’s tax revenue.

The study was led by Dr. Michael L. Walden, a William Neal Reynolds Distinguished Professor at NC State University. He is the author of eight books and over 250 articles and reports, and one of his specialties is economic impact analysis for public and educational institutions. He also advises the NC Department of Commerce and NC General Assembly on economic issues.

Walden said in the release that even prior to conducting the study, he knew a project with the size and scope of Chatham Park will have a significant impact on the local, regional and state economies. But after calculating the numbers, he feels the impact is truly impressive.

See the full Chatham Park development economic impact study (pdf).

Vermont Historic Preservation Grants as an Economic Development Tool

Vermont Governor Peter Shumlin and the state’s Advisory Council on Historic Preservation have approved 18 historic preservation grants to support the rehabilitation of historic civic buildings.

Broad Brook House in Guilford, VT

Broad Brook House in Guilford, VT (photo – Beyond My Ken/wikipedia)

VT Department of Housing and Community Development Commissioner Noelle MacKay said in a release that the $253,220 in matching grants awarded this year demonstrates that historic preservation is an essential tool for Vermont economic development, job growth and community renewal.

Vermont’s Historic Preservation Grant Program was established in 1986 as a state-funded program that annually awards matching grants for building improvement projects that preserve the state’s historical and architectural heritage.

All properties seeking grants under this program must be listed in the National Register of Historic Places or be eligible for listing. Since its inception, the Historic Preservation Grant program has awarded more than $4.5 million in grants that has helped save more than 550 historic structures.

The competitive grants are awarded each year after applications are reviewed by the VT Advisory Council on Historic Preservation. This year, they received 40 applications seeking a total of more than $1.8 million.

The $253,220 in Historic Preservation grants that have been approved this year will leverage an additional $880,000 in other funding for these 18 projects.

One of these projects is Broad Brook House in Guilford, VT, which has a history dating back to 1817 when it opened as a tavern. It has over the years been used as an inn, stagecoach stop, barbershop, post office, dance hall, Masonic lodge and a schoolhouse. For the last 78 years, it has been the town general store in Guilford.

The foundations of the structure’s ell and shed are now being shored up to allow for an expansion of the store so that it can support additional commercial and community uses. This project has been awarded a $20,000 Historic Preservation grant.

Another project awarded a $19,651 grant is the Fairbanks Museum and Planetarium in St. Johnsbury, VT. It was built by Franklin Fairbanks in the 1890s as his personal natural history collection. Now it is a popular tourist attraction for visitors and student groups, drawing tens of thousands of people every year from the state and beyond. The grant will support urgently needed repairs to the building’s slate roof.

Here’s the full list of 18 projects that were awarded Historic Preservation grants this year.

Vermont State Historic Preservation Officer Laura V. Trieschmann said in the release that this competitive grant program is crucial to the preservation of architecturally and historically significant buildings that are the timeless landmarks of Vermont’s landscape.

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