Economic Development

Study – Kansas PEAK Program Had $7.5B Impact on State Economy

The Docking Institute of Public Affairs at Fort Hays State University has released the results of an economic impact analysis study of the Promoting Employment Across Kansas (PEAK) program.

Kansas Dept. of Commerce

Kansas Dept. of Commerce (photo – kansascommerce.com)

PEAK is administered by the Kansas Department of Commerce. Participating companies are allowed to retain 95 percent of payroll withholding tax for jobs that are eligible under the program.

Participants are required to create at least five jobs in non-metropolitan counties, and at least ten jobs in metropolitan counties.

According to the study, PEAK has had a $7.59 billion economic impact on Kansas. This includes:-

- $4,895,832,476 in direct economic impact;

- $1,453,674,532 in indirect impact in the form of additional business spending; and

- $1,244,331,450 in induced impact such as change in household spending.

Every dollar spent through PEAK helps the Kansas economy grow by $960. As of April 2013, the program had created 4,725 direct jobs and another 6,350 indirect jobs, adding up to a total of 11,075 jobs.

A survey conducted as part of the study shows a high rate of satisfaction among participants. A full 90 percent of respondents reported satisfaction with the program.

An overwhelming 97 percent of all respondents said they recommend PEAK to out-of-state business owners.

Among the companies that have relocated to Kansas and received PEAK incentives, 93 percent said they would recommend that other employers they know outside the state should relocate to Kansas.

Kansas Commerce Secretary Pat George said in a statement that he was thrilled this program had been so beneficial to the state economy, and said they would keep working hard for ensuring that taxpayers in Kansas get the best value out of PEAK and other programs.

This FHSU study comes on the heels of a state audit that was critical of the PEAK program. The audit said that PEAK, which was approved by the Kansas Legislature in 2009, had created 5,200 jobs and provided $21 million in tax incentives through December 2012.

Withholding tax incentives had grown from $2.7 million in 2010 to around $12.5 million in 2012. The audit found that PEAK had handed out $7.5 million in tax incentives for in-state expansions in FY 2013, exceeding the legislative cap of $6 million.

The audit also noted that the Missouri Quality Jobs program could reduce the value of PEAK in enticing companies to Kansas. Secondly, the audit also points out that changes in the state’s individual income tax rates have reduced the benefits that participants get from PEAK tax incentives.

California Governor Signs Bill Expanding iHub Innovation Network

On Oct 4, 2013, California Governor Jerry Brown signed a bill to codify and expand the state’s iHub innovation network that creates economic opportunities for startups.

California Innovation Hub - iHub

California Innovation Hub – iHub (photo – asmdc.org)

AB 250 was introduced by Assemblymember Chris Holden from Pasadena.

It was approved by the State Assembly and Senate in late August, and sent to the Governor for his signature on Sept 9, 2013.

AB 250 officially creates the California Innovation Hub (iHub) Program housed under the Governor’s Office of Business and Economic Development (Go-Biz).

The bill also creates an iHub Accelerator Fund to allow private sector funding for the program.

California already has a network of 12 iHubs that cover economic sectors ranging from agriculture to life science, medical technology and bio-mass.

These iHubs operate under a cooperative agreement between Go-Biz and partners in the geographic region in question, including local governments, economic development authorities, financial institutions, incubators, angel and VC investors, public universities, community colleges and research institutions.

Assemblymember Holden explained that they want to put California into a position to incubate and cultivate young companies developing new technologies for promoting conservation and other public policy goals.

Holden said that establishing the iHub Accelerator Fund encourages innovation by allowing California to compete for grant funding from the private sector, foundations, and from the federal government.

In 2013 alone, California’s iHubs have received $1.3 million in federal funding. This includes a $1 million grant to create an AgTech Innovation Center in the Sacramento area to help ranchers and farmers grow their business.

The Coachella Valley Economic Partnership in Palm Springs, CA got $200,000 for developing a strategy to enhance the region’s capacity for attracting manufacturing investments and increasing export sales.

China Lake Technologies got $100,000 for developing a strategy for creating jobs in the Kern County region’s bio-products sector.

GO-Biz Director Kish Rajan and other state officials will be in Riverside on Oct 8, 2013 for the “Innovation Hub Announcement and Expo.”

Rajan said in a statement that California was already home to the largest state sponsored innovation hub network in the U.S., and the announcement being made will bring in new partners and resources to the initiative and further California’s status as a global leader in innovation.

Frisco, TX EDC Adds EB-5 Center to Economic Development Toolkit

The Frisco Texas International Development Center (FTIDC) has been approved to run an EB-5 Regional Center by the U.S. Citizenship and Immigration Services (USCIS).

Frisco, TX EB-5 Regional Center

Frisco, TX EB-5 Regional Center (photo – friscotxeb5.com)

EB-5 is an “Immigrant Investor Pilot Program” that offers permanent residency in the United States to foreign investors in return for their investment into domestic projects and the resultant job creation.

In order to be eligible for this program and apply for green cards for themselves and their family, foreign investors are required to invest $1 million and create at least 10 permanent jobs.

An investment of $500,000 that creates 10 new jobs is also eligible if the project in question is in an area with high unemployment, otherwise known as a Targeted Employment Area (TEA).

The way it works is that the investment is made into projects through a designed EB-5 Center. The management of the EB-5 Center coordinates projects with local and foreign partners, and multiple foreign investors may put up money for the same project.

For instance, a $10 million project that creates 100 jobs may have 5-10 foreign investors supporting it through an EB-5 Center.

As of Oct 1, 2013, there were 325 such approved EB-5 Centers across the U.S., and they are for the most part run by private firms.

Frisco is one of the few cities has officially adopted the EB-5 Center as an economic development tool for attracting new investments and creating jobs. The City of Dallas already has its own EB-5 Center, and the City of Austin’s application is in the works.

Frisco Mayor Maher Maso said they like to think regionally in Frisco, and the FTIDC would only add to the positive trend of economic growth North Texas was experiencing.

Mayor Maso added that there was also the potential benefit of North Texas becoming a home to foreign investors as they put down roots on their path towards permanent residency and eventually U.S. citizenship.

In order to gain approval for the EB-5 Center, the Frisco Economic Development Corporation (FEDC) worked with Strasburger & Price, LLP, a Frisco-based firm that successfully guided Dallas during their own EB-5 application process.

James Gandy, president of the FEDC and the FTIDC, said they had one of the fastest growing economies in the U.S., and the quality of life, workforce and educational institutions makes the three-county region attractive for investors. He said the FTIDC will create even more opportunities for making investments in North Texas.

For more information about the EB-5 program, visit uscis.gov.

Manufacturing Day Features 814 individual Events

Manufacturing Day 2013 is officially underway in the United States on Oct 4, 2013. This is the second annual Manufacturing Day celebration.

Manufacturing Day

Manufacturing Day (photo – mfgday.com)

The event, or collection of 814 individual events, is designed to showcase the importance of manufacturing to the nation’s economy and highlight the high-skill and rewarding manufacturing jobs that are available.

Last year, more than 240 events were held for the inaugural Manufacturing Day in 37 states, with participation from more than 7,000 people.

This year, the number of events has more than tripled, and includes everything from plant tours and educational fairs to manufacturing technology summits. The events will continue throughout October, and some will even extend into November.

The panel of co-producers who provided support and centralized coordination for the nationwide array of simultaneous events include Industrial Strength (ISM), Fabricators & Manufacturers Association International (FMA), the Manufacturing Institute (MI), the National Association of Manufacturers (NAM), and NIST’s Hollings Manufacturing Extension Partnership (MEP).

FMA President and CEO Ed Youdell said it was amazing to all the co-producers how quickly the manufacturing community has embraced this national event.

U.S. Secretary of Commerce Penny Pritzker said that the Dept. of Commerce was proud to be a partner for Manufacturing Day, which she said aims to demonstrate the cutting-edge high-tech manufacturing industry careers that are available.

However, official federal participation is negligible this year because of the government shutdown. Even though NIST’s MEP was one of the producers, they are not involved in it today. NIST is closed and most of its affiliated websites, including manufacturing.gov, is not accessible.

The Science Channel is the media partner for the event. Discovery Communications and the Science Channel are commemorating the event with special programming and community events.

Science Channel is broadcasting a full-day “How It’s Made” marathon on October 4 as part of the Manufacturing Day celebrations. Discovery Communications has opened its doors for a public open house of its high-tech media production factory in Silver Spring, Maryland.

In North Carolina, Gov. Pat McCrory is making a series of manufacturing project announcements on Oct 4, including projects by Flo-Tite Valve Controls and NGK Ceramics USA.

All put together, the Oct 4 Manufacturing Day project announcements in North Carolina will amount to more than $100 million in new investments and creation of 370 manufacturing jobs.

To learn more about individual Manufacturing Day events near you, visit mfgday.com.

U.S. EDA Services Shutdown With Government Employees Furloughed

Starting 12:01 a.m. on Tuesday, Oct 01, 2013, the United States government went into a partial shutdown because Congress was unable to reach an agreement on passing a funding bill.

Government shutdown

Government shutdown (photo – house.gov)

As a result, hundreds of thousands of federal employees across the board, including those working for the Department of Commerce, have been indefinitely furloughed pending passage of the funding bill.

The Department of Commerce has 46,420 employees, of which 87 percent (40,234) have been furloughed. This includes the 169 employees working for the U.S. Economic Development Administration (EDA).

As per Commerce’s plan for an orderly shutdown (published Sept 27, 2013), many agencies that come under Commerce, including the EDA, Bureau of Economic Analysis,  Minority Business Development Administration, International Trade Administration and the Economics and Statistics Administration, will all cease offering their services and activities for the duration.

As long as the shutdown is ongoing, there will be no assistance and support provided to recipients of federal grant funding. No new grants will be issued during the shutdown, and existing grant obligations that are due will also not be paid out.

Pending approval of FY 2014 appropriations, no EDA employee other than the Chief Financial and Administrative Officer is required to work more than half a day for not more than three days to implement the orderly shutdown.

Other federal agencies have been hit even worse by the shutdown, if that’s possible. More than 90 percent of the Department of Education’s workforce has been furloughed, and if the shutdown continues beyond a week, they will have to furlough a full 94 percent (3,983 employees out of 4,225).

The Department of Energy is holding on to 1,113 employees out of a total of 13,814. The Department of the Interior has shut down the national parks, and is keeping on only 13,797 of its 72,562-strong workforce. People still camped out in the parks are being asked to leave within 48 hours.

The worst-hit agency is the EPA, which is holding to a bare 3.85 percent of its workforce, or 613 out of 16,205 employees.

A one week shutdown is expected to cost the U.S. economy around $10 billion.

Investing in Manufacturing Communities Partnership Grants Announced

The consortium of federal agencies involved in the recently announced Investing in Manufacturing Communities Partnership initiative has announced the first set of 44 grants and other investments totaling $7 million.

Made in the USA

Made in the USA (photo – ustr.gov)

IMCP was launched earlier this year in April as a coordinated effort by federal government agencies to assist manufacturing communities make long-term investments in public goods and make their region more attractive for manufacturers and their supply chains.

The program to align and focus federal economic development resources begins with 25 grants awarded by the Dept. of Commerce in 2013, to be used for creating implementation strategies.

For example, the Rhode Island Economic Development Corporation (RIEDC) is getting $100,000 for developing a strategy to establish the Rhode Island Design and Manufacturing Center.

The Commonwealth Center for Advanced Manufacturing in Disputanta, Virginia is getting $280,000 for developing a strategy to establish the Advanced Manufacturing Apprentice Academy, a training facility for providing hands-on training to prepare Virginia’s tobacco region workers for advanced manufacturing careers.

You can see the full descriptions of each grant awarded under IMCP on the Commerce.gov web site.

Apart from the $4.4 million in grants announced by Commerce, additional grants under IMCP were announced by the EPA (seven grants totaling $1.7 million for); SBA (five grants totaling $766,000); and USDA (six grants totaling $528,000).

These grants will help the communities do the groundwork required for competing in the 2014 IMCP Challenge competition.

Secretary of Commerce Penny Pritzker said these planning grants will provide communities with the opportunity to design plans for revitalizing American manufacturing, attract investments and strengthen the economy.

The IMCP Challenge winners will get $25 million grants, to be used as funding for setting up workforce training programs, establishing business parks or incubators, or for other infrastructure.

Projects undertaken will be supported by additional funds provided by other agencies involved in the IMCP initiative. The designated “manufacturing communities” will also get an advantage for securing investments and grants under various programs offered by 10 different federal agencies and departments.

Agriculture Secretary Tom Vilsack said this announcement was another example of how federal agencies are partnering successfully for creating jobs and expanding manufacturing output.

U.S. Environmental Protection Agency Administrator Gina McCarthy said this partnership would make a visible difference in communities all over the country, and the EPA’s focus on Brownfields Area-Wide Planning efforts will help communities create jobs and support manufacturing.

Acting U.S. Small Business Administrator Jeanne Hulit said IMCP was a vital resource for small manufacturers ready to expand, grow and create jobs in their community.

EDA Awards $21M in Grants to Projects Creating 2500 Jobs in 11 States

The U.S. Economic Development Administration (EDA) announced $21.1 million in grants being awarded to 16 economic development projects in 11 states.

EDA

Photo credit – eda.gov

It is expected that the projects being funded will raise $505 million in additional investments, and will create a combined total of more than 2,500 jobs.

The list of 16 projects includes four recipients in California. The Cities of Mt. Shasta and Imperial are getting $3 million each, while Delano and Yuba are getting $1.8 million each.

The City of Imperial is getting $3 million to help it support the development of the Alliance and Innovative Regional Center, which is an EB-5 investment initiative. This center is expected to create more than 640 jobs by helping provide green cards to foreigners who invest in qualified projects and help create jobs.

Mt. Shasta is getting $3 million for making water infrastructure improvements that will allow the city to provide support for a new water bottling plant. This project is expected to generate $20 million in private investments and will create 60 new jobs.

Yuba is likewise getting $1.8 million for water system improvements that will enable an expansion of Yuba County Airport Industrial Park and support continued manufacturing growth. This project will help create 150 jobs.

Delano is also getting $1.8 million for building a rail spur connecting the city to an industrial park, which is expected to boost commercial activity at the park and provide more employment opportunities.

Dothan, Alabama is getting $1 million from the EDA to help build up aerospace sector activity at Dothan-Houston County Airport Authority. The grant will be used for roadway and water system improvements, which is expected to be helpful for an MRO (maintenance, repair and overhaul) project at the airport that is expected to generate $7.5 million in private investment and create 300 new jobs.

In Miami, Florida, the Southeast Overtown/Park West Community Redevelopment Agency is getting $600,000 for a historic rehabilitation project. The City of Miami Hospitality and Culinary Institute will be housed in the rehabilitated church. This project is expected to create 139 jobs while expanding training opportunities for hospitality workers.

The Rochester Institute of Technology in Rochester, New York, is getting a $1.5 million grant that will help establish the Center for Urban Entrepreneurship in a renovated downtown property that housed a bank.

The city of Florence, South Carolina is getting $1 million to make water system improvements that will facilitate a $27 million expansion at the Honda plant. This project will help retain 600 jobs and create 65 new jobs.

The rest of the grants are as follows:-

Avoyelles Parish Port Commission of Simmesport, Louisiana – $1.2 million

LaSalle Parish Police Jury of Jena, Louisiana – $500,000

City of Jonesburg, Missouri – $1.9 million

Eastern Oklahoma County Technology Center of Choctaw, Oklahoma – $300,000

City of Moore, Oklahoma – $300,000

Redevelopment Authority of Easton Pennsylvania – $1.5 million

South Plains Community College of Levelland, Texas – $475,000

Cedar City, Corporation of Cedar City, Utah – $935,900

LED Gets $1M From US EDA For International Commerce Strategy Development

Louisiana Economic Development (LED) of Baton Rouge, Louisiana has been awarded a $1 million grant by the U.S. Economic Development Administration (EDA) to help Louisiana develop an international commerce strategy.

Louisiana Economic Development (LED)

LED (photo – louisianaeconomicdevelopment.com)

According to the announcement made by U.S. Secretary of Commerce Penny Pritzker, the grant will be used to develop a master plan for international commerce that will help Louisiana attract FDI and provide Louisiana businesses with access to export markets.

Specifically, LED will establish an Office of International Commerce as a conduit for providing technical and marketing assistance to help businesses and communities in Louisiana attract FDI and increase exports.

U.S. Senator for Louisiana Mary L. Landrieu, who chairs the U.S. Senate Committee on Small Business and Entrepreneurship, said this was another great example of Louisiana setting the pace for states that are looking to promote business opportunities at the international level.

Louisiana’s 2012 exports were pegged at $63.2 billion, which is a record for the state. It’s also 15 percent higher as compared to the exports for 2011.

Almost half of this comes from the New Orleans and Baton Rouge metropolitan areas. According to a joint study by the Brookings Institution and JPMorgan Chase, both metro areas are in top 50 U.S. metro areas with the highest exports.

Some of the credit for Louisiana’s fast growth in exports goes to the U.S. SBA’s State Trade and Export Promotion (STEP) program. The program was created three years ago as a part of the Small Business Jobs Act of 2010, and aims to help small businesses become exporters and increase the value of their exports.

As a part of the legislation, the SBA was authorized to establish an Office of International Trade to oversee the STEP program and other SBA efforts aimed at promoting exports by small businesses.

STEP provided $850,000 of funding for Louisiana in its first year of operations, which allowed LED to help 81 businesses in the state with their export plans. By the end of this month, these businesses will have generated $8.87 million in export sales, so the program is delivering returns at a rate of $10 for every dollar spent.

Louisiana now looks to be expanding on these efforts by following the same model for LED’s own Office of International Commerce.

New Jersey Economic Opportunity Act of 2013 Signed Into Law

On Sept 18, 2013, New Jersey Gov. Chris Christie signed into law the Economic Opportunity Act of 2013, a sweeping legislative attempt to streamline the state’s incentive programs aimed at retaining and attracting business.

The Jersey Comeback

NJ comeback (photo – state.nj.us)

The law consolidates New Jersey’s five major incentive programs into two programs:-

- Grow New Jersey (GrowNJ), which is now the state’s main job creation incentive program; and

- Economic Redevelopment and Growth Program (ERG), which is now the state’s only incentive program for developers.

The bill has been going back and forth between the NJ Assembly and Senate for the better part of the year after being introduced on Jan 14, 2013.

It was finally sent to the Governor for his signature last month, who then sent it back to the legislature earlier this month with recommendations for further changes. The legislature promptly approved the amended version and sent it back to the Governor last week for his signature.

The law reduces the eligibility threshold for tax breaks from 100 full-time jobs to 10 full-time jobs for technology startups, and 25 new jobs for companies in sectors such as manufacturing, energy, defense, logistics, life sciences, finance and health.

The largest bonus credits are for “mega projects” which have been refined in the bill to include large automotive companies which are headquartered in New Jersey.

This highest level of bonus credits also includes projects in nine Urban Transit hubs; eight South Jersey counties; and the four cities (Camden, Trenton, Passaic City, and Paterson) with low median family income that comprise the Garden State Growth Zone.

The bill also allocates $600 million in tax credits under ERG for residential projects aimed at stimulating investments in the urban transit hubs and the eight South Jersey counties.

Governor Christie said the bill will encourage more businesses to create jobs throughout the state, and it would give a boost to some of the biggest cities in New Jersey.

Tracye McDaniel, president and CEO of Choose New Jersey, Inc., said the new legislation will improve the efficiency of evaluating and awarding incentives for creating jobs and stimulating investments in New Jersey.

To underline the importance of the bill for attracting and retaining business, Gov. Christie signed it on Sept 18, after attending the grand opening of the new Panasonic headquarters in Newark on Sept 17, and addressing Zoetis Inc. employees at their new world headquarters in Florham Park, NJ on Sept 16.

DC Mayor Gray Vetoes Walmart Bill to Save 4000 Jobs

District of Columbia Mayor Vincent C. Gray has vetoed the Large Retailer Accountability Act of 2013 (LRAA), citing possible harm to economic development and job growth.

Walmart in Washington D.C

Walmart in Washington D.C. (photo – walmartcommunity.com)

The issue at the core of the matter is whether or not the District should allow Bentonville, Arkansas-based Walmart to build six stores in Washington D.C.

Opponents in the DC Council who want to keep Walmart out came up with the LRAA, which sought to set the minimum wage that big box retailers should pay employees to $12.50. The prevailing minimum wage in the city is only $8.25.

As a result, Walmart brought the whole project to a grinding halt. Three of the stores were already under construction, and Walmart said it would look into the legal and financial implications of the bill on these three projects that were underway. They entirely dropped the idea for the other three stores.

If the bill had become law, it would affect not just Walmart’s plans, but also those of other large retailers such as Home Depot, Target, Lowe’s, Wegmans, Harris Teeter, Walgreens Macy’s and AutoZone. D.C. would lose hundreds of millions in investments and more than 4,000 jobs in the first year alone.

Even so, the DC Council approved Bill 20-62 (LRAA) in July and sent it to the Mayor for his signature. The Mayor has been sitting on the bill until now, and today sent a letter to Phil Mendelson, chairman of the DC Council, explaining why he was vetoing the bill.

He said the bill wasn’t really a living-wage bill because it raised the minimum wage only for a small fraction of the workforce. He also said that the bill was a “job-killer” because every large retailer considering opening a store in the District has indicated they won’t be coming or expanding if the bill becomes law.

He also said the bill doesn’t help underserved areas in the District that have no quality retail options and very little chance of gaining any if LRAA goes into effect. He added that it not would just delay economic development in these neighborhoods, but would “kill economic development in these communities for a generation.”

On the other hand, the Mayor also called for a modest increase in the District’s minimum wage that would affect employers and workers in an equitable manner.

In reaction to the veto, Walmart put out a statement which said that they looked forward to finishing the work they began three years ago – a plan to bring more shopping options, jobs and fresh food choices for Washington D.C. residents.

The DC Council can still overcome the veto, if they manage to get a two-thirds majority in favor of LRAA within the next 30 days. The earlier vote approving the bill was 8-5 in favor.

 

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