Economic Development Blog

Economic Development

New Orleans Creates Small Business Assistance Fund

Sep 19

The New Orleans Office of Economic Development announced the creation of the Small Business Assistance Fund (SBAF) in partnership with the City of New Orleans, Louisiana and NewCorp, Inc.

Small business growth (photo-tn.gov)

SBAF starts off with $2 in available funding that will be used to provide 8% interest rate loans to for-profit and non-profit businesses for operating capital and equipment purchases.

SBAF loans are expected to range from $10,000 to $100,000 with a maximum term of up to 84 months. To be eligible, participants must meet the following requirements:-

- Domiciled in Orleans Parish;

- Demonstrate that it has been unable to access capital from traditional lending sources;

- Demonstrate financial and economic viability to spur growth and employ City of New Orleans residents; and

- Provide living-wage employment and ownership opportunities to low-to-moderate income communities.

“I am committed to growing our small businesses and creating jobs in our community,” said New Orleans Mayor Mitch Landrieu. “This initiative is yet another example of how we can build capacity among our local businesses, remove obstacles to capital and ensure their inclusion in local opportunities.”

SBAF is partially funded by the City of New Orleans Economic Development Fund. NewCorp is a Community Development Financial Institution (CDFI) tasked with administering the SBAF program.

“The Small Business Assistance Fund program presents an opportunity for the small business person and the entrepreneurial community, that have not had access to capital and coaching assistance, to access those resources now,” said Vaughn Fauria, president and executive director of NewCorp Inc. “The City of New Orleans and NewCorp are committed to the small business enterprises and fully realize that a healthy business community supports job creation and a thriving city.”

“The Economic Development Advisory Committee has been working for a long time to make the EDF Fund promote equitable economic opportunity,” said Judith Dangerfield, chair of the advisory committee. “The Small Business Assistance Fund does that – for our small businesses and entrepreneurs, our unemployed and underemployed citizens, and our communities.”

Economic Development Efforts Underway in Wilsonville, Oregon

Sep 18

www.ci.wilsonville.or.us/

The region of Wilsonville, Oregon is planning on advancing a variety of economic development efforts.

The city council is currently crafting up a plan for retaining and expanding businesses in the Wilsonville region. The city council is also considering bringing back the sporting giant called Cabela’s. A work plan was approved as the first economic development strategy would be adopted.

The next step is to create a task force which will make a variety of recommendations for the best possible businesses for the area in Wilsonville. The type of incentives offered and retention strategies will also be discussed with the task force. Meetings will be held within a time frame of 4 months and recommendations are expected to be made around February of 2013.

The city council wants to immediately make a decision about bringing the Cabela’s business as it will be located in close proximity to the Argyle Square. The current land is under an agricultural holding zone and is meant to be utilized for industrial use. The idea of bringing in Cabela’s started in 2010 when a myriad of representatives visited the site which was located close to a local Target. After 2 years passed, the staff in Wilsonville contacted Cabela’s to ask if they were still interested in the location.

The City Manager also agreed to discuss the situation with the Metro in order to determine the options for the zoned land. The City Council also needs questions answered about the infrastructure and traffic before development can occur on the land. A Councilor named Richard Goddard elaborates on how the leaders should take a proactive role in moving the economic development projects forward instead of having pages of paper sitting on a desk for a long time.

Overall, the economic development projects are going to be important to the community and region in Wilsonville, Oregon.

Hershey Opens PA Chocolate Plant After $300M Investment

Sep 18

The Hershey Company (NYSE: HSY) officially opened up the world’s most technologically advanced chocolate making facility in Hershey, Pennsylvania that cost the company $300 million.

Photo – Joadl/wikipedia

The new Hershey chocolate plant is expected to have a $1 billion impact on the local economy in Pennsylvania over the next five years.

“Today, we are celebrating our proud Pennsylvania heritage, the growing popularity of Hershey products in global markets, our continuing investments in productive technology and our great workers who make it possible to enjoy these iconic products,” said John P. Bilbrey, president and CEO, The Hershey Company.

“I am working as Governor to ensure there is a job for every Pennsylvanian that wants one and an educated Pennsylvanian for every one of those jobs. I am proud the Commonwealth was able to partner with Hershey as they grow, evolve, create jobs, train great employees and continue their commitment to Pennsylvania’s prosperity,” said PA Gov. Tom Corbett.

The new 340,000 sq. ft. expansion at West Hershey is located less than two miles from the company’s original chocolate factory opened in 1905 by Milton Hershey.

The plant has the most technologically advanced, automated chocolate syrup production lines in the world. It can produce more than 70 million “Hershey’s Kisses Chocolates” per day.

This investment by Hershey represents the single largest manufacturing investment in Pennsylvania that breaks the company’s own record which was established when they build the original West Hershey plant in 1991.

The new development has pumped $70 million into the Pennsylvania economy and created more than 300 construction jobs. Hershey has already trained approximately 700 employees to prepare them to work in the plant’s high-tech manufacturing environment.

The Hershey Company is the third-largest manufacturer in Pennsylvania. They have 4,800 employees in the state, 8,800 in the United States and 14,000 worldwide. With revenues of more than $6 billion, Hershey offers confectionery products under more than 25 brand names.

Google Fiber Bumps Into Kansas City Socioeconomic Divide

Sep 17

Back in July, Google opened up registrations for its Google Fiber broadband network in Kansas City, Missouri and Kansas City, Kansas. They divided Kansas City into fiberhoods and set a minimum threshold for providing connectivity. If a fiberhood got enough signups, they would hook up all those who registered with high speed broadband.

Google Fiber, Kansas City (Photo – Google.com)

The pre-registration period is over and done with, the results are in and Google will soon be setting up the first fiberhoods in both states (Hanover Heights, MO and Crown Center, KS) with their connections.

A close look at which areas got a high number of registrations and which did not get enough signups shows that Google’s attempt to level the playing field by providing broadband has run into a socioeconomic and racial divide in Kansas City.

The western side of the city has mostly met the threshold and then some. But the eastern part of the city on the other side of Troost Avenue is a challenge, with registrations in most neighborhoods falling short of the threshold.

Michael Liimatta of Connecting for Good, a nonprofit working to bring broadband access to low-income residents in Kansas City, told Wired.com that “the white, affluent neighborhoods qualified and the primarily black, lower-income neighborhoods didn’t.”

Google did attempt to address the issue, and even conducted a survey before actually wading into the project. They found that affordability ($70/month) was only part of the problem, and 25 percent of Kansas City residents did not have any kind of internet at home and said they didn’t need it.

Many people who did not have internet or an email account didn’t sign up because the pre-registration process required a Gmail account and a $10 fee to be paid with a credit or debit card. Google sent out 60 employees armed with chromebooks to go door to door and convince people to register, but the signups still ended up following the digital divide.

Google does not want to give up just as yet. “We’re committed to addressing the digital literacy and relevance problem head on,” Jenna Wandres, an associate on the Google Fiber communications team told Time. “We’ll have micro-grants available for community organizations who want to start up digital literacy programs in Kansas City.”

Google is also working with the University of Kansas Medical Center and local public schools to provide them with free broadband. They plan to help pipe advanced placement classes from schools where they are taught to those where they aren’t.

Casino Expansion Boosting Economy In Western North Carolina

Sep 16

www.knoxnews.com/

The development of a casino is boosting the economy in the western part of North Carolina.

The expansion is almost completed but many jobs were created in the process while other economic benefits were realized as well.

The development is nearly 15 years in the making and is the largest employer in the western region of North Carolina.

The Principal Chief for the Cherokee Nation elaborates on how resources were created which addressed many issues such as housing, education and improving the living standards for people around the area. A casino impact study was conducted and nearly $380 million dollars was contributed to the local economy in North Carolina.

There were also many economic benefits which were ultimately highlighted such as:

Visitors generating gaming revenue of approximately $386 million dollars
Casino revenue impact was approximately $300 million dollars
Hiring in the casino was about 5 percent of local employment
Operational spending contributed to nearly $65 million in the local economy

An Economic Development Director named Josh Carpenter elaborates on how the casino has made a major impact on the counties of Graham, Jackson, Clay and many others around the western region of North Carolina. Carpenter pinpoints that the majority of the impact comes from the jobs that are created from the development itself.

Carpenter states that many people drive from the specific counties to work at the local Cherokee Casino. There is not much tax revenue that is raised due to the tribe not having to pay any form of property tax. The tourism economy benefits while employees also spend money in the local area. The casino expansion has also assisted the local construction industry as there was a slowdown due to the housing market slump.

Overall, the development of the casino has been beneficial to the entire western region of North Carolina.

South Carolina Economy Dependent Upon Wind Energy Production

Sep 14

www.heatherlord.com/blog/

The economy in South Carolina is dependent upon wind energy and the great recession has ultimately slowed the development of the energy.
The state of South Carolina is considered to have the 2^nd largest offshore wind resource and the goal is to ultimately generate approximately 1,000 megawatts of wind power within a time frame of a decade.

The Wildlife Federation issued a detailed report on the wind energy development. A representative for the Wildlife Federation pinpoints that many states are ahead of South Carolina but pinpoints that the state is making proficient gains in offshore wind resources.

The region between the state line and Georgetown is considered to be prime territory to generate megawatts of electricity. The goal is to ultimately generate approximately 1,000 megawatts by the year 2020. Senator Paul Campbell pinpoints that the discovery of natural gas and hydraulic fracturing have negatively affected alternative energy. Natural gas prices are expected to increase while the production of wind turbines is expected to increase in South Carolina. The increased generation of wind turbines could result in South Carolina being a leader in the production of wind energy. A Renewable Energy director named Nicholas Rigas elaborates on how the low manufacturing region makes the port an ideal area for the wind industry to grow.

The role of the facility was to ultimately expand the electrical systems while also increasing the production of many turbines. The state of South Carolina currently has the second largest wind resource on the eastern part of the U.S. A representative for the Southern Alliance pinpoints that nearly 35 gigawatts of wind can be generated which can ultimately power nearly 8 million homes in the state. Wind energy is considered to be the largest resource of clean energy in the surrounding area.

Overall, the development of wind energy is important to the economic structure in South Carolina.

Iowa Trashes Illinois Sour Grapes Over Orascom Deal

Sep 14

Last week, Egypt-based Orascom chose Iowa for its $1.4 billion fertilizer plant. At that time, it seemed like Iowa‘s huge last minute agreement to offer a $110 million incentives package had won the day and spirited the plant away from Illinois‘ grasp.

Photo – Orascom

But now, Illinois claims that it never was in the running and they backed off after they found out about Iowa’s massive giveaway to Orascom.

Marcelyn Love, communications manager for the Illinois Department of Commerce and Economic Opportunity (DCEO), told the Quad City Times that the state never put an offer on the table and they had no intention of getting into a bidding war.

This is very much in contradiction to what Orascom CEO Nassef Sawiris said on Sept 5 when he and Iowa Gov. Terry Branstad jointly announced the choice of Iowa for the plant. At that time, Sawiris said that Illinois had made an offer that was “richer” than Iowa’s offer, but he chose the Lee County site in Iowa anyway.

Iowa Gov. Brantad responded to Illinois’ claims that they never made an offer as “baloney.”

“They’re sore losers; we won, they lost,” added Gov. Branstad. “The truth of the matter is we won because we have clean government, and we don’t have the massive debt they have in Illinois. They just don’t like the criticism for the way they mismanaged their state for so many years.”

Iowa House Speaker Kraig Paulsen rubbed in some more salt on the wounds, saying that he trusted Orascom’s claim that they did have an offer from Illinois. “I surely trust them more than the Illinois government with its history of corruption,” said Speaker Paulsen.

If Speaker Paulsen is right, then it is just a case of sour grapes in Illinois. But if Orascom scammed Iowa Gov. Branstad into thinking they had a better offer from Illinois, then the fertilizer will hit the fan in Iowa because Iowa tax-payers just got taken for $75 million.

Either way, Illinois’ final position on the matter, as stated by DCEO’s Marcelyn Love, is that Iowa paid through the nose to bring Orascom to the Midwest, and farmers in Illinois will now benefit from lower anhydrous ammonia prices.

Federal Reserve Announces Third Round of Quantitative Easing

Sep 14

deadlinelive.info/

The Federal Reserve announced a bond buying stimulus which will ultimately spur economic growth in the United States.

Chairman Ben Bernanke announced that the FED will continue injecting money into the economy as a program is implemented to buy $40 billion a month in mortgage backed securities. The stimulus will be the third round of quantitative easing (QE3).

Bernanke stated at a press conference that the stimulus was ultimately aimed at boosting the job market and stimulating the housing market.

Bernanke elaborates on how the policy is considered to be “Main Street” as boosting jobs is most important to the Federal Reserve. Bernanke was also ready to take action if the economy deteriorated further.

As a result of the announcement by the Federal Reserve, The Dow Jones Industrial went up approximately 200 points. Senior Economist Gus Faucher elaborates on how the nature of the bond buying scheme proved that the FED was serious about the recovery in the U.S. The Senior Economist was not expecting such an aggressive strategy but the job market is important enough to ultimately implement an ambitious policy. In addition to the bond buying, the FED will implement “Operation Twist” as long term interest rates are lowered.

Nearly $85 billion dollars a month will be pumped into the U.S. economy. Bernanke pinpointed that the housing market was recovering but he does not believe that the economy is strong enough. Due to the new stimulus, many Republicans are expected to criticize the move. Bernanke ultimately wants to see an improvement in the labor market numbers as the past six months has been lackluster. Bernanke was also worried about the high rate of unemployment as it threatened the U.S. economy. “Structural Damage” could have been the consequence of inaction.

Overall, Americans have to wait to see if the bond buying stimulus positively affects the U.S economy.

Detroit Economic Development Agencies Wage Turf War

Sep 13

Motown has had it tough these past few years, but apparently it’s also pretty hard these days to survive if you’re an economic development agency in Detroit, Michigan.

Photo – portdetroit.com

The Detroit Economic Growth Corp. (DEGC) and the Detroit-Wayne County Port Authority (DWCPA) are engaged in a bitter turf war over who gets to fund economic development projects in Detroit.

The current battle in this turf war flared up because the port authority is asking the state to pass legislation granting it powers to fund ED projects that have nothing to do with the Detroit waterfront.

To be specific, they want to be able to issue revenue bonds for a project, with revenue generated later on by the project being used to pay off the bonds. Currently, the DWCPA can only fund ED projects using tax-payer funds allocated to it by the state, county or city.

State Sen. Mike Kowall, chairman of the Michigan Senate’s Economic Development Committee, was happy to oblige and is currently putting together a bill that will free the DWCPA to fund economic development projects on its own.

This turf war has pitted players in the Detroit ED landscape on one or the other side of the legislative battle. Below are some of the salient comments provided to the Detroit Free Press.

“It’s not a turf battle. It’s a jobs battle. We’ve got to get people back to work.” – State Sen. Mike Kowall

“Every great port city in the United States has multiple economic development agencies and they all work together.” – John Jamian, executive director, DWCPA

“It allows us to be a finance partner with the City of Detroit or Wayne County.” – John Kerr, director of economic development, DWCPA

“This is nothing more than cannibalizing. This is not value-added economic development. This is nothing more than collecting fees.” – George W. Jackson Jr., president and CEO of DEGC

“It’s duplication of effort and will add confusion. We don’t need that other competition when we’re doing pretty well on our own, just so somebody can sell revenue bonds.” – Raymond Byers, director of Wayne County’s Economic Development Growth Engine (EDGE)

DEGC’s Jackson even wrote a letter to Sen. Kowall, in which he said that DEGC had no objection to the port authority getting authority to raise funds for port-related projects. But he said they should not be allowed to finance projects far from the waterfront which would create “inappropriate competition with the city’s other development entities.”

Economic Growth Was Main Focus At Forum in Garfield County, Colorado

Sep 12

http://roaringforkyoungprofessionals.wordpress.com/

A forum was held in the region of Garfield County, Colorado where economic growth was the main focus.

Economic diversity and attracting young professionals to the region were the main issues that were addressed at the forum. Many of the county commissioner hopefuls talked about the issues as it was hosted by the Fork Young Professionals. The Fork Young Professionals are composed of many business people that are in their 20’s, 30’s and 40’s.

The main worry with the forum was how the county government was going to diversify the local economy.

One of the candidates whose running to be on the County Commission Board elaborates on how the county has potential for economic diversity but it is not being maximized.

Candidate Martin states that many of the local leaders are doing all that they can to assist current and established businesses. According to Martin, the main complication with the local leaders is a “lack of imagination” and a lagging world economy. Martin wants to make sure that the leaders don’t just sit around and that they are proactive as the challenges are met. A local educator states that there is a “brain drain” in the Garfield County.

The educator elaborates on how students get an education but then they relocate to other regions. There are a lack of high tech jobs and advancement opportunities in the region. According to the local educator, more businesses need to focus on education and innovation. Another main issue with the younger generation is the higher cost of living which ultimately makes it difficult to make it in the real world. According to the local educator, affordability should be provided to everybody in the Garfield County region. Expanding recreational opportunities is also important to attracting younger professionals.

Overall, the forum was an important event in the Garfield County as economic issues were addressed.

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