Economic Development

Legislation to Create Northern New York Economic Development Fund

Governor Andrew M. Cuomo announced an agreement with state legislative leaders on the Northern New York Power Proceeds Allocation Act.

The New NY Works for the North Country

The New NY Works for the North Country (photo – regionalcouncils.ny.gov)

This legislation will create the Northern New York Economic Development Fund to support projects in the North Country region, along with a new entity – the Northern New York Power Proceeds Allocation Board.

This board will be responsible for making recommendations for awards from the fund based on criteria such as capital investments and job creation.

“This agreement adds another dimension to our efforts to spur economic development and growth in the North Country,” said Gov. Cuomo.

The Governor added that tapping into the region’s supply of unutilized hydropower would enable them to jumpstart the economy in the North Country, invest in local businesses and help create jobs and new opportunities for New Yorkers in St. Lawrence County.

The $2 million annual allocation for the fund will come from the New York Power Authority’s (NYPA) market sale net earnings of a block of unutilized hydropower from the St. Lawrence-Franklin D. Roosevelt Hydroelectric Plant.

The aim is for these funds to be applied to economic development projects in St. Lawrence County, which would fulfill payment commitments made to St. Lawrence County under the St. Regis land claim agreement between the Saint Regis Mohawk Tribe, Saint Lawrence County and New York State. It resolved decades of tribal land disputes and the distribution of millions of dollars of gaming revenue to local governments.

The New York Power Authority (NYPA) has a critical role to play in the implementation of this agreement.

As per the legislation, up to 20MW of hydropower that is available under contract to the Massena Electric Department (MED) will now also be harnessed for economic development in the area by using the proceeds of the sale of power in the wholesale electricity marketplace.

Since 2102, MED has been sub-allocating this 20MW of cheap hydropower to eligible businesses based on recommendations from local and regional economic development organizations including the North Country Regional Economic Development Council, St. Lawrence River Valley Redevelopment Agency (RVRDA), and the Lawrence County IDA.

The monetized value of the power will now similarly be allocated towards economic development projects based on input from these organizations. Both the RVRDA and IDA will assist in the administration of the fund, and will provide input on grant applications being considered by the NYPA in coordination with Empire State Development.

The whole process is similar to legislation approved in 2012 which allowed for NYPA’s unutilized hydropower from the Niagara Power Project to be used for Western New York economic development.

 

New Jersey Economic Development Organization Offers Online Tool to Calculate State Incentives

If you’re looking for state tax incentives for creating jobs and investing in New Jersey, you can now use the online state incentives calculation tool hosted by Choose New Jersey Inc.

NJ state incentives calculator

NJ state incentives calculator

Choose New Jersey Inc. is a non-profit corporation established in 2010 to market New Jersey as a business location for both domestic and international businesses.

The online tool was launched to help interested businesses better understand the new structure of New Jersey economic development incentives available now as a result of the enactment of the New Jersey Economic Opportunity Act of 2013.

The Choose NJ incentives calculator requires you to input basic data about your project’s required capital investment, job creation estimates and other details, and in return provides a preliminary estimate of tax incentives the project would be eligible for.

You start by selecting choices about the real estate (industrial/office, new construction/existing building, square feet required, green standards, etc.). Throw in the capital investment and jobs to be created and retained, and you’re all set to go.

You can additionally input data about factors that would provide your project bonus credits. This includes things such as the location (deep poverty packet, HUD Choice Neighborhood, etc.).

You may also input data that would provide credits for environmental aspects such as LEED certification and environmental remediation, and whether on-site solar provides more than 50 percent of the project’s power consumption needs.

You can specify whether it’s a transit oriented development, and if it’s located within ½ mile of light rail station.

“This tool is an easy first step for business leaders, site selection consultants and real estate professionals that are looking to better understand state incentives,” said Tracye McDaniel, president and CEO of Choose New Jersey.

McDaniel added that the Economic Opportunity Act has boosted New Jersey as a strategic location for business, and they want to equip those who are considering locating or expanding in the state with a simple tool for estimating the potential benefits now available because of the legislation.

The Economic Opportunity Act consolidated New Jersey economic development incentives under two powerful programs with enhanced funding and lower thresholds for eligibility. One is the Grow NJ Assistance program and the other one is the Economic Redevelopment and Growth (ERG) Program.

Since the law was passed in Sept 2013, a total of 41 projects have received Grow NJ incentives totaling nearly $715.6 million as of June 2014. These projects spread across New Jersey are creating a combined total of 6,443 new full-time jobs and helping retain 7,720 at-risk jobs.

Massachusetts House Passes Economic Development Bill

The Massachusetts House has passed an economic development bill which began with around $60 million for new and expanded initiatives, but ended up being passed as a much larger bill after a bunch of amendments were tacked on to it.

Massachusetts State House

Massachusetts State House (photo – malegislature.gov)

The Massachusetts economic development bill (H.4165 – An Act promoting economic growth across the Commonwealth) was shepherded through by House Speaker Robert A. DeLeo and Rep. Joseph Wagner.

Wagner chairs the House Joint Committee on Economic Development and Emerging Technologies.

H.4165, which passed by a 125-to-23 vote, includes, among other things:-

- $15 million for middle skills jobs training through the Advanced Manufacturing and Information Technology Training Trust Fund;

- $12 million for the Transformative Development Fund;

- $10 million for the Brownfields Redevelopment fund;

- $2 million for the Big Data Innovation and Workforce fund; and

- $1.5 million for MassVentures;

This bill, including its amendments such as a sales tax holiday for the weekend of Aug 16-17 this year, will have to be reconciled with the Senate’s version of its own economic development bill.

There’s also the pending issue of what happens to the similar $100 million economic development legislative package (H. 4045) proposed by Gov. Deval Patrick in April.

Specifically, the Governor’s package includes legislation to ban noncompete agreements in Massachusetts. The House bill that has been passed ignores the noncompetes issue.

However, it’s possible that the noncompete agreement legislation may now be taken up separately as a stand-alone bill. Rep. Wagner is leading the effort to find a middle ground in between the status quo preserved by the House Bill and a complete ban on noncompete agreements as proposed in the Governor’s economic development package.

Regardless of the outcome of these efforts and the fate of noncompete agreements in Massachusetts, the good thing is that it has speeded up passage of the overall economic development package.

It’s highly unlikely that the House leadership would have moved so fast to introduce, debate and pass its own package of initiatives without the motivation of being able to take a stand against the proposed ban on noncompetes. Their passage of H.4165 makes the Governor‚Äôs bill a moot issue and forces noncompete agreements to be tackled now as a standalone legislative issue.

Alabama Releases $6M For Robotic Technology Park’s Workforce Training Expansion

Governor Robert Bentley announced $6 million in state funding for the construction of a third building that will enhance workforce training activities at the Alabama Robotic Technology Park in Tanner, AL.

Alabama Robotic Technology Park

Alabama Robotic Technology Park (photo – alabamartp.org)

RTP, run by the state workforce training agency AIDT (Alabama Industrial Development Training), was established with the mission of providing advanced robotics training at no cost for Alabama companies.

The entire project has an estimated cost of around $73 million, including about $40 million worth of robotics equipment provided by companies.

RTP, located across U.S. 31 from Calhoun Community College, is being built in three phases. Phase I was the construction of the 60,000-square-foot Robotics Maintenance Training Center, which is now offering classes in robotics, PLCs (programmable logic controllers) and industrial safety.

Put simply, technicians learn how to maintain automated equipment and their control systems. The building has 40 robots and an automated welding lab.

Each month, RTP typically gets around 75 employees sent for training from companies such as Toyota, Honda, Navistar and other auto suppliers. A company must have a facility in Alabama in order to send its employees for free training at RTP.

Phase II was the construction of the 43,000-square-foot Advanced Technology Research and Development Center, used for research, development and testing of automation and robotics used by the industry, space exploration and military projects.

Companies can use this facility to test their new robots and other automated equipment. It even has a one-mile track for testing unmanned vehicles.

Alabama shelled out $17.3 million in state funds to build and equip the Phase I building, and another $8 million for Phase II. The $6 million now released for Phase III covers two-thirds of the $9 million cost of the third building, which is the Integration, Entrepreneurial and Paint/Dispense Training Center.

AIDT has already raised the remaining $3 million through a state bond issue. The 50,000-square-foot building will allow employees to train on new equipment and software before their company installs it in their plant. The building also has an area for training employees on using both robots and manual spray painting to paint vehicle parts and other products.

Business Facilities magazine, which recently gave the Alabama Robotic Technology Park an economic development award for achievement in workforce training, noted that RTP is considered as “one of the world’s most innovative and futuristic training centers.”

AIDT was established as a division of the Alabama Commerce Department. Secretary of Commerce Greg Canfield said that there really is no other facility in the nation that can offer advanced manufacturers the level of hands-on training this one can.

Canfield added that the Phase III expansion will make RTP’s capabilities even more valuable to companies while giving Alabama another advantage in industrial recruitment.

Washington State Approves Community Development Block Grants For 17 Rural Projects

The Washington State Department of Commerce announced nearly $400,000 in Community Development Block Grants funding for 17 projects in rural communities.

CDBG

CDBG (photo – wa.gov)

The WA State CDBG program grants ranging from $18,000 to $24,000 will support plans and feasibility studies for everything from community centers and food banks to improved water and wastewater systems.

For instance, one of the projects is the redevelopment of a Food Bank site by the Town of Cusick, which is getting $24,000 to undertake a feasibility study.

The project will enable creation of a plan to guide the town in providing enhanced levels of social services related to food for those in need.

The bulk of the CDBG funding will be used by the Town of Cusick to pay a consultant with expertise in rural socioeconomic development, education and other skills required to perform the food bank feasibility study. The planning project includes identification of existing structures that would be suitable to be used as a food bank, or sites suitable for new construction.

The Town of Twisp is likewise getting $24,000 for a water system plan update. Water system plans have to be updated every six years, and Twisp’s existing plan dates back to 2008.

Twisp is working with Olympia, WA-based consulting firm Gray & Osborne, Inc. for an updated water system plan that will provide a detailed view of their water system’s future needs, thus providing utility data for implementing long range planning.

Cusick, Twisp and the other 15 recipients were chosen through a competitive process. The WA Commerce Dept received applications requesting a total of more than $615,000 in CDBG funding.

The Commerce Department’s Assistant Director for Local Government and Infrastructure Kendee Yamaguchi said these grants will help communities collect and evaluate the information they need to move forward with essential local improvements.

The state CDBG program receives funding from the U.S. Department of Housing and Urban Development (HUD) for supporting activities benefiting low-income residents in small cities (population below 50,000) and counties (below 200,000). Bigger communities get their CDBG federal funding directly from HUD.

The WA State CDBG program has awarded more than $457 million since 1982 in support of more than 1,250 community development projects that are high-priority local issues.

The projects benefiting low-income residents in rural areas include local infrastructure improvement projects, affordable housing projects, community health and childcare centers, loans and technical assistance for local micro-enterprises, and the planning process and studies that enhance the success of these projects.

Three Companies Back Out of Austin Economic Development Agreements

Austin is facing a reversal of sorts in its economic development efforts, with three companies backing out of incentive agreements they had entered into with the City.

Austin economic development agreement loss

Austin economic development agreement loss

Together, these three projects represent nearly 1,400 quality jobs that were supposed to be created by National Instruments, Dropbox and US Farathane.

Austin Mayor Lee Leffingwell issued a statement in which he notes that the Austin City Council has instituted stringent requirements on companies applying for economic incentives.

“It concerns me that we have greatly diminished the effectiveness of our incentive program by placing burdensome conditions into the agreements. These obligations range from exceedingly difficult reporting requirements, to new provisions regarding prevailing wage and minimum living wage, and other requirements,” said Mayor Leffingwell.

The biggest loss out of the three projects is the National Instruments expansion. The company was planning to invest $80 million to build a 300,000-square-foot research and development facility.

According to their economic development agreement with the City, National Instruments had committed to creating 1,000 new full-time jobs with an average annual wage of $72,223, and also agreed to retain their existing 2,440 full-time jobs in Austin.

The State of Texas had offered National Instruments Corp. $4.4 million through the Texas Enterprise Fund (TEF), and additional local incentives were to be provided as tax breaks from Travis County and the City of Austin.

Dropbox, Inc. was likewise considering a $5.5 million expansion of their Austin office to add 170 new jobs with an average annual wage of $59,000. They had been approved for a package of state and local incentives that included $1.5 million from the TEF and a $244,500 performance-based grant from the City of Austin.

National Instruments has scrapped its expansion, but Dropbox plans to go ahead with their plans without incentives.

The more worrisome issue is that these three cancelled agreements are part of a larger trend which has led to nine out of 21 Austin economic development agreements being cancelled for various reasons.

This includes the cancelled eBay agreement for creating 1,050 new jobs. eBay cancelled the agreement in May 2013, and a few months later agreed to reenter into a smaller agreement to create 400 new jobs.

Including these 400 jobs and others that had already been created in the interim, eBay did actually end up with an expansion of 1,000 jobs, but with far lower incentives than they originally sought. Forcing companies to backtrack like this after entering into economic development agreements can’t really be good in any way for Austin.

Detroit Economic Development Projects Get $28M NMTC Allocation

The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced a new round of $3.5 billion in New Markets Tax Credit (NMTC) awards.

New Markets Tax Credit

New Markets Tax Credit

The 87 recipients are spread across 32 states and the District of Columbia. Invest Detroit has been allocated $28 million for investing in Detroit economic development projects.

The NMTC allocation provided to Invest Detroit will be invested on the M-1 Rail project and associated economic development in the downtown and mid-town areas, and also on commercial and small business development in Detroit neighborhoods.

“We are extremely pleased to have received this award at such a critical time for Detroit’s revitalization,‚Äù said Invest Detroit President David Blaszkiewicz.

The other Michigan-based CDE allocated tax credit authority under the NMTC Program is the Great Lakes Capital Fund located in Lansing, MI. Great Lakes Capital Fund is getting a $35 million allocation for projects to revitalize neighborhoods.

“Thanks to this year’s New Markets Tax Credit allocation, we will be able to invest in high-impact projects that create jobs and leverage further community development,‚Äù said Great Lakes Capital Fund CEO Mark McDaniel.

U.S. Senator for Michigan Carl Levin said this announcement is good news for economic development across Michigan.

Senator Levin added that by attracting private investment capital to projects and areas that are in greatest need, these awards help create jobs and opportunity and bolster important public investments including projects such as the M-1 Rail.

Amias Gerety, Acting Assistant Secretary for Financial Institutions, said that the NMTC Program provides critical investments and creates jobs in low-income neighborhoods across the nation.

Gerety added that NMTC is often the most critical piece of the puzzle when trying to finance important economic development projects across the country.

The 87 organizations selected to receive NMTC awards were chosen from a pool of 310 applicants. Around 75 percent ($2.575 billion) of the total $3.5 billion in allocations will be used to finance and support loans or investments into businesses in low-income communities.

CDFI Fund Acting Director Dennis Nolan said the NMTC Program is clearly targeting economic development in communities that critically need financing to help create new business and jobs and affordable housing.

See the NMTC Program Award Book for a complete listing of the 87 organizations chosen to receive NMTC allocations – Download (pdf)

Greater Houston Partnership Launches Talent Attraction Campaign

Greater Houston Partnership, the lead economic development organization for the Houston region, has launched a new talent attraction campaign that aims to highlight the vibrancy of the region and its position as a great place to live and work.

Houston: The City With No Limits talent attraction campaign

Houston: The City With No Limits talent attraction campaign (photo – thecitywithnolimits.com)

The Houston: The City With No Limits campaign will span multiple years and supplement GHP’s existing business recruitment and retention programs and efforts.

The main focus of the campaign is to strengthen the 10-county Houston region’s ability to attract top-notch young talent.

The campaign’s messaging highlights, including quality of life and the limitless opportunities, were identified through focus groups, surveys, interviews and quantitative studies.

A website (TheCityWithNoLimits.com) has been launched to go with the campaign. It provides key statistics and facts, profiles of real Houstonians, a brand hub with media assets that can be used by others to help promote the campaign, and links to the campaign’s social media pages.

It also has a three-minute video called the “Best Day of my Life” that spotlights Houston’s limitless range of activities, culture, quality of life and career options.

All of this came about as a result of a task force that was assembled last year. Led by GHP board member Jamey Rootes, the taskforce’s mission was to come up with a way to enhance the Greater Houston area’s image and attract talent.

Rootes said that Houston has a well-deserved reputation as a place to do business with a thriving economy, and added that this community-wide effort allows them to tell the full story of Houston ‚Äúas the great American and global city that we know it to be.”

Apart from GHP, the taskforce had participation from the Houston Mayor’s Office, the Greater Houston CVB and Houston First. Not to mention community leaders, area chambers and multinational corporations.

“This has been an exciting, collaborative effort involving numerous community partners. This campaign encapsulates everything that makes our region limitless,” said Bob Harvey, president and CEO of GHP.

The campaign will be splashed across all mediums including outdoor, television, online and print publications and social media through the fall, and then extended beyond the region to expand awareness of Houston’s “limitless” opportunities.

The market research and creation of brand architecture and creative elements was done with the help of Austin-based Avalanche Consulting and the Houston-based MMI Agency.

Delaware Governor Signs Economic Development Bill to Revitalize Downtowns

Joined by state and local officials and community leaders, Delaware Governor Jack Markell signed an economic development bill that will promote revitalization of Delaware’s downtowns.

DE Gov. Jack Markell bill signing - SB 191 offering economic development incentives for downtown revitalization

DE Gov. Jack Markell bill signing – SB 191 offering economic development incentives for downtown revitalization (photo – delaware.gov)

The bill (SB 191) allows communities to apply for a part of their city, town or unincorporated area to be designated as a Downtown Development District.

Projects in a DDD will be eligible for significant Delaware economic development incentives and other state benefits.

Investors in designated Districts are entitled for grants of up to 20 percent of their construction costs. These grants, administered by the Delaware State Housing Authority (DSHA), are available for residential, commercial and mixed-use projects undertaken by for-profit builders and investors, non-profits, homeowners and private businesses.

State agencies will additionally provide incentives for activities undertaken in a DDD. For instance, DSHA will provide additional funding for acquiring and rehabilitating vacant and abandoned houses. A percentage of Historic Preservation Tax Credits offered by the State will be allocated for DDD projects.

The idea was proposed in the Governor’s State of the State address in January, and introduced as proposed legislation on April 3, 2014. The bill quickly moved through the Legislature, ending up being approved unanimously by the Senate on May 7 and the House on May 15.

“It is my hope that this innovative new program to revitalize our downtowns will bring much-needed energy and resources to areas of our state that have been overlooked for too long,” said Gov. Markell.

The Governor plans to designate up to three Districts (one in each of Delaware’s three counties) out of the first round of applications. In future rounds after that, up to 15 Districts may be designated at one time.

DDD applicants will be evaluated based on their need and impact of the designation, the local incentives they offer, and the quality of the development plan submitted.

State Senator Margaret Rose Henry, the bill’s lead sponsor, said that strong downtowns have the potential to be tremendous catalysts for developing stronger cities across-the-board, but in order to do that, downtowns have to overcome the challenges of aging buildings and infrastructure.

Sen. Henry said this new law will help marshal the kind of resources needed for meeting these challenges and will make encourage the private sector investment and support needed to make this succeed.

North Carolina Legislature Considers Economic Development Partnership Bill

A bill that authorizes moving North Carolina economic development functions from the Department of Commerce to a public-private partnership looks all set to be approved by the NC Legislature.

NC Partnership for Prosperity announcement

NC Partnership for Prosperity announcement in April 2013 (photo – state.nc.us)

The bill (H1031 and S743) has already cleared the Commerce committees in the House and Senate, and is now being considered by the full Senate.

Governor Pat McCrory first announced plans in April 2013 to establish a separate non-profit corporation to center economic development functions for the state.

At that time, Gov. McCrory said it would unleash North Carolina’s economic potential with a bold new approach to recruit and retain business.

In Jan 2014, former ITT executive Richard Lindenmuth was named as the interim CEO of the Economic Development Partnership of North Carolina.

The original legislation based on the plan initiated in 2013 didn’t get through the Legislature, and the new version now being proposed by NC Senate Majority Leader Harry Brown includes a few changes.

The new bill requires the new Economic Development Partnership of North Carolina to, among other things,:-

- Raise $250,000 in private contributions before it can enter into a contract with the Commerce Department and receive any state funds. Going forward, the Partnership will further need to raise at least $750,000 in the first year of the agreement, and $1.25 million per year after that, with the goal of raising a total of $6 million over the next five years;

- State and private funds will be kept separate, and the Partnership will refrain from awarding grants and deciding which companies and projects get state funding;

- Comply with state public records law for economic development projects receiving state funding, meet disclosure and public hearing requirements; and

- Report annually on how the Partnership is being more successful and efficient at jobs recruitment than the Commerce Dept.

Senate Majority Leader Harry Brown, the sponsor of the Senate bill, said that “This bill will allow for greater collaboration of the public and private sector in job recruiting and marketing while increasing transparency and accountability in the use of tax dollars.”

Apart from the $6 million in private contributions the Partnership is expected to raise over the next five years, it will also get state funding of around $90 million during this period. Nearly 70 employees will be moved from the Commerce Department to the Partnership.

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