Economic Development Blog

Economic Development

Curt Schilling – RIEDC Tried to Bully, Intimidate 38 Studios

Jul 07

The saga of the now bankrupt 38 Studios and the Rhode Island Economic Development Corporation (RIEDC) keeps getting new tinder to burn up the wires every other week.

Photo – 38 Studios

The latest turn of events is that Curt Schilling and his wife have taken to Facebook to accuse the RIEDC of “trying to bully and intimidate us on multiple fronts.”

This was in response to an AP report which accused 38 Studios of stonewalling state auditors for days even after the company board had approved plans to file bankrupt.

Emails obtained by the AP show that an RIEDC lawyer made multiple attempts to gain access for state auditors to the company’s general ledger, email and file servers. RI Gov. Lincoln Chafee accused 38 Studios of stonewalling, and said that nothing was forthcoming.

Curt Schilling’s wife Shonda Schilling then took to Facebook to blast Gov. Chafee for undermining efforts to save 38 Studios from going under.

“I was there for those three weeks of hope and hell…My husband so distraught he couldn’t function. NOT because he had lost it all but because that team worked SO hard and believed in what they were doing…Which is backed up by the fact the media could not find anyone to say that Curt was a bad boss…They loved their job and they loved Rhode Island. BUT everyday Gov Chaffee at exactly 4 oclock would have a press conference.” – Shonda Schilling, Facebook

Curt Schilling followed suit with his own Facebook post to defend against the AP report that accused them of stonewalling state auditors.

“We backed up every ounce of data and email exchanged between the EDC and 38 to INSURE when this BS started to come out, people seriously interested in the truth, will know it…We didn’t stonewall anyone, the EDC was trying to bully us and intimidate us on multiple fronts.” – Curt Schilling, Facebook

Meanwhile, AP broke another story about a senior RIEDEC official who sought employment at 38 Studios less than 2 months after the RIEDC gave the company a $75 million loan guarantee.

Emails obtained by AP show that J. Michael Saul, former RIEDC managing director of financial services, communicated with Rick Wester, 38 Studios CFO, asking for a job because Gov. Chafee had asked all RIEDC officials to reapply for their jobs. The Rhode Island EDC issued a statement saying it does not condone such behavior and is now investigating the matter.

Companywide Layoff at 38 Studios, Second RI EDA Official Resigns

38 Studios Sinking Fast, RI EDC Gets New Board Members

38 Studios Files for Bankruptcy, Leaves RI With $115.9M Debt

Gaming Funds Promotes Economic Development in Allegheny, Pennsylvania

Jul 06

www.alleghenycounty.us/

Gaming funds will ultimately help to promote economic development in the county of Allegheny, Pennsylvania.

Redevelopment projects, developing three particular hangers and demolishing a particular “dilapidated” building is expected to create hundreds of jobs as they get a boost from the Commonwealth Financing Authority.

The economic development Secretary whose name is Alan Walker states that the projects will lead to an overall improvement in public safety and will be a positive asset to the community in the Allegheny County. The revenues from the gaming fund will help to provide infrastructure improvements which will assist with economic development in the future.

Nearly 5 different projects will receive nearly $500,000 dollars as the total will sum up to nearly $2.5 million dollars and will come from the Tourism Fund Program.

The GEDTF (Gaming Economic Development and Tourism Fund) provides particular grants for projects which promote economic development which includes:

Infrastructure development
Community Improvement
Public interest
Job training

The county airport authority received approximately $500,000 dollars which would ultimately be utilized for improving the infrastructure in the northern region of the Pittsburgh Airport. The grant is being used to ultimately fund the development of 3 particular aircraft hangers. As soon as the project is completed in the county airport, $24 million dollars will be generated in capital investment while 390 jobs will also be created.

The redevelopment authority will receive $500,000 dollars so that a parking lot can be replaced in close proximity to the First Baptist Church. The project will cost about $30 million dollars and will involve constructing an office building. The LDC (Landmark Development Corporation) received nearly $500,000 dollars which will be used for environmental costs for the Center Development project. The six story apartments will be torn down and cleared for new development.

Overall, the development funds are going to benefit the community of the Allegheny County.

LEAP Takes Over Economic Development Department in Lansing, Michigan

Jul 05

www.lansingarts.org/

The region of Lansing, Michigan and the economic development department has been taken over by LEAP (Lansing economic development agency).

All of the development efforts would be shifted towards the regional sector of the agency. The contract has been undergoing changes for the past month and is a major shift in the regions brand new focus upon attracting new development, creating more jobs and increasing the amount of business investments. The CEO of LEAP whose name is Bob Trezise states that it is a brand new era for the region as they focus upon economic development. Many of the leaders have talked about making the change for almost 10 years but it is a big step forward for Lansing.

The contract will ultimately require the Lansing Area Economic Development Corporation to pay nearly $350,000 dollars so that the money can be used for economic development purposes. LEAP is also planning on hiring one more employee so that they can use a 10 member staff to market the area of Lansing in a more efficient manner. The CEO of LEAP states that the situation is a win-win for both agencies. The Chief of Staff whose name is Randy Hannan states that the transition will ultimately save Lansing approximately $250,000 dollars for the entire year.

The effect of the budget was not the most important factor as economic development needed to take on a new focus towards the regional sector. Randy Hannan elaborates on how the change is a milestone for the region as they are backing up LEAP as Lansing is “putting the economic development chips” into the hands of the agency. LEAP is actually considered to be a government agency which markets to a variety of investors. The majority of the funding also comes from the private sector.

Overall, the new change will help local businesses and individuals in the region of Lansing.

Economic Development Department in Missouri Receives Poor Rating

Jul 05

http://ded.mo.gov/home.aspx

The state of Missouri and its economic development department has unfortunately received a poor rating from the auditors.

According to the auditors, the economic development department overstated the overall benefits of the job incentive program. The department also inadequately verified with businesses to check to see if they were doing what they proposed. The auditor who conducted the investigation was Tom Schweich and the poor rating was finalized for the administration of the job incentive program. The economic development department did not agree with the assessment that the auditor made and rejected any recommendations and conclusions that were suggested.

The audit is now another problem for the state of Missouri as they are currently struggling with the tax credit policies. Some individuals are proposing that existing initiatives be withdrawn while others say that initiatives need to be expanded in particular industries. Spurring job creation is also an important issue that the state of Missouri is also dealing with as the legislature and governor’s office are constantly debating. The quality jobs program focused upon giving grants and breaks to businesses that created a certain number of jobs ranging from 10 to 100. The jobs that were created also paid out average wages and covered health insurance premiums.

The job program was initially created in 2005 as it was signed into law by Governor Matt Blunt and Jay Nixon. All the way up to 2011, the jobs program and the economic development department created nearly 45,646 jobs across the state of Missouri. According to the audit, nearly 40 percent of those supposed jobs created failed to meet minimum thresholds. The auditor states that only 7,176 jobs were actually created under the specific guidelines. Also, the project applications show that nearly 4.9 billion in investment was to be reported but only 1.1 billion was actually documented.

Overall, the economic development department needs to properly organize the way information is reported.

NYCEDC To Be Split After Settlement With NY Attorney General

Jul 04

The New York City Economic Development Corporation (NYCEDC) has agreed to be split in two under the terms of an agreement reached with NY State Attorney General Eric T. Schneiderman.

NY Attorney General Eric T. Schneiderman

Eric T. Schneiderman (Photo – NY AG’s Office)

The settlement with AG Schneiderman was regarding illegal lobbying activities by NYCEDC and two other local development corporations – Flushing-Willets Point-Corona Local Development Corporation (FWPC) and the Coney Island Development Corporation (CIDC). NY state laws bar LDCs from lobbying.

The NYCEDC was singled out for special attention because it allegedly played a behind-the-scenes role in the lobbying activities of the other LDCs. NYCEDC instructed FWPC to use its fax machine to transmit a letter prepared by EDC to the City Council. They were apparently ghost-writing letters and op-eds and preparing testimony for unaffiliated community members.

CIDC was operating out of NYCEDC’s office in Manhattan and all its staff were NYCEDC employees. Under the settlement with the AG, NYCEDC has now agreed to public disclosure of any funding provided to other LDCs or personnel overlap with other LDCs.

The AG’s office announced that all three non-profits had illegally lobbied New York City officials in connection with development projects in the Willets Point section of Queens and the Coney Island area in Brooklyn.

“These local development corporations flouted the law by lobbying elected officials, both directly and through third parties, to win approval of their favored projects. As a result of today’s agreement, these organizations will reform their practices to comply with the law and end lobbying through proxies in the communities they serve,” said Attorney General Schneiderman.

As part of the agreement, FWPC and CIDC agreed to stop lobbying for approval of development projects. NYCEDC is essentially splitting itself into two arms – one to continue lobbying legally and another one as an LDC.

The LDC wing will not employ lobbyists or government relations consultants, participate in the development of third-party communications with the City Council, or use others LDCs to lobby, or otherwise lobby indirectly.

Economic Development Bill Undergoes Debate in the State of Massachusetts

Jul 04

www.patriotledger.com/

The Massachusetts Senate has begun to debate the economic development bill.

While the state budget is on the Governor’s desk, the Senate is beginning to focus upon the economic development bill which was originally written in the House of Representatives. The ranging proposal will be reviewed in regards to the economic development bill. The Chairman of the Senate Committee whose name is Brian Joyce elaborated on how the economic development bill needs to be properly dissected. The committee will ultimately review the bill for approximately a couple of weeks and there will be about one or two modifications and improvements to the economic bill. The components of the bill are also very noteworthy according to Brian Joyce.

One of the main worries of the economic development bill is that the House and Senate will have different versions which will result in a loss of time as many people need an economic boost in the state of Massachusetts. The development legislation was ultimately created by a Representative named Joseph Wagner as it efficiently passed through the House in early May. Speaker Robert DeLeo states that the economy is actually improving but he wants to ultimately improve the lives of many people that are currently struggling.

The Senate took a look at the economic development bill for the first time and it had positive support from many of the businesses around the region. One of the main worries of the bill was that there would not be enough oversight as many of the municipalities would borrow funds from the land and it would be utilized as leverage. Ultimately, securing loans with property values would make certain regions experience an economic downturn as many of the calculations would be over hyped.

Overall, the economic development bill needs some pivotal revisions but it will be beneficial to many of the residents in the state of Massachusetts.

New Office of Economic Development Replaces Old Development Commission in Jacksonville, Florida

Jul 01

www.coj.net/mayor

The Mayor of Jacksonville, Florida has officially signed an ordinance to end the Jacksonville Economic Development Commission.

The Office of Economic Development will in turn take place of the old Economic Development Commission. The city council ultimately approved the brand new legislation as the Mayor wanted to streamline the city government.

Mayor Alvin Brown states that the ordinance is more than a policy as it aims to further improve the structure. The new Office of Economic Development will assist many business leaders as nearly 38,000 people are out of work and are looking for companies to open up doors.

A brand new Chief Economic Development Officer will ultimately be appointed to the Office of Economic Development but the Mayor will still need to improve the new post.

Some of the duties of the new Chief Economic Development Officer include:

Day to day duties
Enterprise zone management
Incentive Negotiation
Attracting special events and entertainment

A Council Member whose name is Lori Boyer met with the President of the Council whose name is Bill Bishop to discuss the reorganization plan. The plan will ultimately create the Downtown Investment Authority. The Investment Authority will serve as the redevelopment agency for the downtown region and sole development.

Council Member Lori Boyer made sure to make changes to the ordinance in regards to “Powers and Duties” of the authority that is in control. Boyer wanted to also change the way in which the authorities borrowed money. Boyer pinpoints that the city has debt ceiling complications and that they should not have an unrestricted authority to borrow money. It can become potentially disastrous to the local region of Jacksonville if the city is allowed unrestricted power to money. The borrowing ability should ultimately be limited to the trust fund.

Overall, the new Office of Economic Development is going to be a positive asset to Jacksonville.

Economic Development Board in Michigan Approves New Bridge Project in Detroit

Jun 29

www.midlandtomorrow.org/

The economic development board in Michigan approved the Governor Rick Snyder deal with the region of Canada as a new bridge will be constructed near the Detroit River.

The board members will utilize a strategic fund to ultimately buy land in Detroit so that the bridge can be constructed. A particular lawyer whose name is William Danhof helped draft the resolution and states that the region of Canada will ultimately pay the costs of Michigan. The authorities will be set up similar to a bank and will be funded with Canadian dollars so that the Strategic Fund can draw from.

Danhof told the board that they will need to provide enough funds so that property can be acquired in the Michigan region. The state of Michigan also does not need to pay any particular costs that are associated with international crossing. There was a debate within the board for a couple hours and there were many advocates for the project and a few opponents who were against it.

The supporters of the bridge project pinpointed many benefits such as:

The creation of 10,000 jobs in the construction sector
Easing the congestion so that businesses can ship goods efficiently which will give them competitive toll rates

The Lieutenant Governor whose name is Brian Calley states that there is no risk for the state of Michigan as there is no downside and only an upside. Many of the opponents of the project pinpoint that the construction process will ultimately lead to potentially harming the community. Another member was uncertain about the project because an “in depth analysis” was not imposed. Many people also did not like the idea that foreign money was going to be used to benefit a private company.

Overall, the creation of so many jobs is an important factor for moving the project forward in Detroit.

Union City, California Experiencing An Economic Boom

Jun 28

www.eastbaymodern.com/

A development report shows that the region of Union City, California is experiencing a boom as businesses are growing and brand new jobs are being created.

Even though there might be a recession, the region of Union City is expanding and growing. There were nearly 196 brand new business licenses that were requested which is an average of approximately 32 every month. 48 of the new businesses are considered to be contractors and subcontractors. The majority of the contractors do business in Union City but they are based in other towns. 55 other licenses were for professional services and the majority are home based. Nearly 36 percent of the businesses in Union City are based in the home.

There were 4 particular businesses that could boost revenue and increase the amount of jobs in Union City:

Rich Foods- Expected to create approximately 200 jobs in the Union City region. Investment of nearly $11 million dollars in a brand new facility.
Fresh Point- 190 brand new employees are expected to be established. Investment of nearly $308,000 dollars towards a facility.
Gexpro- Offers nearly 250,000 products from nearly 200 manufacturers. Has a staff of 30 and is in the top generators of sales.
Hampton Hotel- New project proposed to build an extended stay hotel which is near the property. 50 brand new jobs are also expected to be created as the planning commission implements the project.

There are also 5 businesses that will be expanding in the region of Union City and they include:

Global Contract Manufacturing
Southern Wine and Spirits
Abaxis
Synterys
Tri-Ced Community Recycling

There were also many proposed improvements towards businesses such as Central Plaza, Union Square Marketplace, Taco Bell and Pappas Investments. Overall, the economic boom in Union City is beneficial to many of the community members.

Airbus To Open First U.S. Manufacturing Facility in Mobile, Alabama

Jun 28

European aircraft manufacturer Airbus is laying down the gauntlet to Boeing with a direct investment of hundreds of millions of dollars to start making single-aisle Airbus planes at its first manufacturing facility in the U.S.in Mobile, Alabama.

Airbus in Mobile, Alabama (Photo – Airbus.com)

The U.S. is the world’s biggest market for single-aisle planes, and the market is currently controlled by Boeing. Airbus only has a 20 percent share in the American market, while both companies have an equal share of the global market.

Airbus has a better chance of selling planes in America if it can make the planes in the south with non-union labor. But what’s good for the Airbus and its parent company European Aeronautic Defense and Space (EADS) may not necessarily be good for European countries like France, Germany and Spain that have a stake in it.

Airbus already has a significant presence in Mobile, Alabama. The 30,000 sq ft facility houses Airbus Military North America’s maintenance, repair and overhaul delivery center at the Mobile Regional Airport. The Airbus Americas engineering facility was opened in Feb 2007 in Mobile. Their design and engineering offices in Wichita, Kansas were opened 10 years ago.

Alabama officials have been trying since 2005 to get Airbus to open up a manufacturing plant in Mobile. As per comments made by EADS officials last year, the south would be their first choice for a U.S. manufacturing facility for Airbus. They had Alabama, Texas and Mississippi on their shortlist.

Back in 2005, EADS was willing to invest $600 million for building its large A330 aircraft in the US if it got the much-maligned $35 billion USAF refueling tanker contract. After a long delay and Congressional investigations, the contract was finally given to Boeing last year.

Airbus apparently has plans to start producing at least 150 A-320 single-aisle jets per year in its new Mobile, Alabama plant. But it might take 3-4 years for the plant to become operational. More details and an official announcement will be made early next week.

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