Economic Development Blog

Economic Development

Cherokee Nation to Undertake $100M Health Care Overhaul

Mar 29

Tahlequah, Oklahoma-based Cherokee Nation, the government of the Cherokee people, announced that it will be investing $100 million to overhaul the largest health care system in the U.S. operated by a tribe.

Cherokee Nation Principal Chief Bill John Baker announcing $100M health care investment (photo – cherokee.org)

The overhaul includes construction of a new 100-bed hospital and renovation or replacement of four other health centers in Oklahoma over the next 2-3 years.

The $53.1 million hospital project will replace the existing W.W. Hastings Hospital that serves tribe members in Tahlequah. The new hospital will additionally become an outpatient center.

These investments are fueled by Cherokee Nation Businesses LLC profits accrued in the Cherokee Nation general fund, which gets 35 percent of CNB profits as per the tribe’s law. Last year, this 35 percent worked out to $57 million.

CNB, whose biggest profits come from gaming and hospitality, generates revenues of $750 million each year. The general fund which gets 35 percent of the profits is supposed to be used for providing services such as education, housing and health care.

This $100 million project is the first major investment made by CNB towards the tribe’s infrastructure. CNB is paying for the development, and will then lease the facilities to the tribe.

Even the construction work is being done in-house by Cherokee Nation Construction Resources (CNCR), which is a CNB subsidiary. Cheryl Cohenour, executive general manager of CNCR, said that this project was much more meaningful because it was not just about job creation or profits adding to the general fund.

“For the first time, our work will directly affect citizens in ways the 35 percent dividend or job creation cannot. There is so much pride in knowing that as a Cherokee Nation, tribally owned business, we have something tangible to show our businesses’ commitment to making change for the Cherokee people,” added Cohenour.

Shawn Slaton, CEO of CNB, said it was a great opportunity to show why the casinos were there. He reiterated their commitment to creating jobs, growing businesses and providing funding for services utilized by the Cherokee people.

Cherokee Nation has 300,000 citizens and 8,000 employees. Their tribal businesses have diversified beyond gaming to include everything from government contracts to manufacturing and telecom companies. Cherokee Nation has a $1.5 billion economic impact on Oklahoma’s economy.

BankcorpSouth Creates $500M Grow Mississippi Fund

Mar 28

BancorpSouth, Inc. (NYSE: BXS) announced that they are creating a $500 million loan pool called “Grow Mississippi” to help the state solicit business expansions and support job creation projects.

BancorpSouth Mississippi (photo – BancorpSouth/wikipedia)

The announcement was made at a joint event by BancorpSouth CEO Dan Rollins and Mississippi Governor Phil Bryant.

Rollins said the $500 million was allocated specifically to create a fund that will provide loans to entrepreneurs and businesses that select Mississippi as their location, and for existing businesses in the state to fund their expansion plans.

He said they could allocate more money for the loan fund if required, depending on the success of the initial allocation in identifying suitable candidates.

Gov. Bryant applauded BancorpSouth’s leadership in providing businesses with access to capital, which the Governor said was “a critical element in positioning Mississippi as the top spot for economic development.”

BancorpSouth will be working with the Mississippi Development Authority (MDA) and the bank’s network of local community lenders to select small businesses, entrepreneurs and corporations for funding from the Grow Mississippi loan pool.

Brent Christensen, executive director of MDA, said in a statement that the MDA will be offering full support for the initiative, and will provide whatever resources are required to ensure its success.

Aubrey Patterson, chairman of the BancorpSouth, Inc. Board said the objective of the Grow Mississippi loan pool was not just about funding startups and expansions, but also to “show the confidence BancorpSouth has in Mississippi as an ideal market place for businesses to grow and prosper.”

Patterson is a former chairman of the Mississippi Partnership for Economic Development and the Mississippi Economic Council, and is an ardent supporter of the state’s economic development programs.

The bank will structure loans in such a way as to be compliant with their normal loan policies, while allowing applicants to leverage it to take advantage of local and state economic development project funding programs and incentives, along with SBA and other federal loan programs.

Gov. Bryant added that attracting good jobs to Mississippi called for teamwork. “We look forward to working with additional partners who want to show the world that ‘Mississippi Works’ and is open for business,” added Gov. Bryant.

Tupelo, Mississippi-based BancorpSouth, Inc. has $13.4 billion in assets and more than 4,400 employees.

IBM to Set up Technology Center in Baton Rouge, Louisiana

Mar 27

IBM Senior Vice President Colleen Arnold and Louisiana Governor Bobby Jindal were on hand for an announcement that the company will set up a technology center in downtown Baton Rouge as part of a public-private riverfront development.

Gov. Jindal at IBM Baton Rouge announcement (photo – Baton Rouge Area Chamber)

The IBM technology center will create 800 direct new jobs and another 542 indirect jobs, and will provide software development and maintenance services to the company’s clients in the U.S.

IBM will partner with Louisiana State University (LSU) and Louisiana Economic Development (LED) to expand higher education programs and employ college graduates and professionals in the computer science and STEM fields.

The State of Louisiana will shell out $14 million over 10 years to help LSU double its faculty for computer science, and triple the number of graduates it produces in the next five years.

IBM will be working with LSU to create coursework more in tune with their needs in terms of technology, software development and application development.

LED has offered IBM a $29.5 million in performance-based grants over 12 years as an incentive package. Baton Rouge chipped in with $1.5 million for workforce training, recruitment and relocation expenses.

The best part is that construction of the building is being financed with state and local funding. The core of the $55 million riverfront development project will be an office building that will house the IBM Services Center, along with a separate residential building.

The IBM office building will require an investment of $30.5 million, with the state providing $14.8 million. Another $3 million will come from the City of Baton Rouge and the Parish of East Baton Rouge. The remaining $12.7 million is being funded through a federal CDBG grant.

The office and residential complex will create another 600 construction jobs.

LSU College of Engineering Dean Richard Koubek said the partnership between LSU, IBM and LED was a “powerful example of the triangulation between industry, government and academia that elevates the state’s role as a national leader in economic development.”

Gov. Jindal said the project was a game-changer that would have a generational impact on Baton Rouge and Louisiana. Baton Rouge Mayor Kip Holden it would have a ripple effect on private investment, and send a message to the next generation about Baton Rouge being a great place to study and work.

U.S. Approves $91M Flu Vaccine Manufacturing Facility in Texas

Mar 26

The Texas A&M University System and GlaxoSmithKline plc (GSK) announced that the U.S. Department of Health and Human Services (HHS) has approved a $91 million influenza manufacturing facility in Bryan-College Station, Texas.

Dr. Brett Giroir, TX Gov. Rick Perry at Texas A&M announcement

Dr. Brett Giroir and TX Gov. Rick Perry at Texas A&M announcement (photo – Governor’s Office)

The new facility will be the anchor for the Texas A&M Center for Innovation in Advanced Development and Manufacturing (CIADM).

The announcement was made by Texas Gov. Rick Perry at the State Capitol, flanked by executives and officials from Texas A&M, GSK and HHS.

Governor Perry said the announcement was a big win for the Lone Star State and for the nation.

As per an economic impact study, CIADM is expected to attract $41 billion in spending over a 25-year period, and will lead to the creation of 6,873 jobs. Local governments will earn $339.93 million in revenue, while the state will get $849.12 million.

SK Vaccines already makes 30 vaccines around the world, including facilities in Germany and Quebec, Canada which manufacture the influenza vaccine. In 2012, the company was required to provide 20 million flu shots in the U.S.

Once the TAMUS-GSK facility is fully operational, CIADM will be capable of manufacturing and supplying 50 million influenza vaccine doses within four months of a pandemic outbreak. A GSK operational hub in Marietta, Pennsylvania will be getting a lot more work too, since they will be packaging and distributing the flu shots.

Dr. Brett Giroir, head of CIADM and also the vice chancellor for strategic initiatives at TAMUS, said that GSK’s selection of Texas for vaccine manufacturing was “a testament to the investments that the A&M System and the State of Texas have made in the people, infrastructure and technologies, much of which came from critical state programs such as the Emerging Technology Fund.”

CIADM was established in 2012 as a public-private partnership to enhance emergency preparedness against pandemic influenza and other threats. The initial funding level for CIADM was set at $285.6 million, with the U.S. government providing $176.6 million.

NYC Launches Tech “LINK” for Low-Income New Yorkers

Mar 26

The New York City Economic Development Corporation (NYCEDC) and NYC Mayor Michael R. Bloomberg announced the official launch of LINK (Leveraging Innovations and our Neighborhoods in the Knowledge Economy) – an effort to get low-income New Yorkers more involved in the booming knowledge economy.

NYC Mayor Bloomberg at LINK announcement (photo – Spencer T Tucker/ Mayor’s Office)

LINK currently has eight programs that will together impart skills to make low-income New Yorkers more employable, while supporting entrepreneurial activities in distressed communities to create more jobs that require little formal training.

“The goal here is to make stronger ties for low income New Yorkers to our growing tech economy – ties that would not otherwise emerge naturally but may flourish with the right attention and incentives,” said NYC Deputy Mayor for Health and Human Services Linda I. Gibbs.

Gibbs added that LINK reflected the commitment of the economic development and employment sectors to make sure that the “fruits of our economic resurgence” benefited all New Yorkers.

Agencies partnering on this initiative with NYCEDC include the Center for Economic Opportunity, Small Business Services, and the Human Resources Administration.

These agencies will be helping NYCEDC implement pilots of each of the eight LINK programs described below.

LEAP (Learn as you Earn Advancement Program) – This program offers soft-skills classroom training and connects certificate and Associate’s Degree holders to paid internships in five sectors.

LEAP Classes will be conducted by partners, including NADAP for healthcare IT in Manhattan, Year Up and EDSI in Brooklyn for entry-level IT and web-based work/business support respectively, and by the YMCA in Queens for early childhood education teaching assistant positions.

Immigrant Bridge Program – This one aims to help immigrants that have advanced degrees to pursue a higher-paying tech job. The program will support them with soft-skills training and provide personal loans for education and expenses during the job search process.

DigitalWork NYC – This program targets unemployed youth by showing them online entry-level opportunities for digital work such as transcription and image tagging. The program will focus on getting some work history into resumes with the aim of opening up a pathway for a career in the knowledge economy.

Jobs and Economic Mobility Track in NYC BigApps – This program is focused on creating mobile apps that can aid in finding jobs and supporting workers. The apps mentioned include one which helps locate hospitality jobs within a 30-minute subway ride, and another which locates daycare facilities.

The other four programs are a business innovation challenge, a vacant lot activation program, business incubators for low-income entrepreneurs, and Progress Networks – a program that will help small to medium-sized businesses in New York City form consortiums that can leverage scale to reduce costs and channel these savings into creating more jobs, training employees and providing better benefits.

You can read more about these LINK programs at nycedc.com.

Google Launches Global Impact Awards Competition in UK

Mar 25

Last year, Google launched its inaugural Global Impact Awards to support non-profits engaged in tackling global problems with technology and innovation.

Google Global Impact Awards (photo – globalimpactchallenge.withgoogle.com)

They awarded $23 million to seven non-profits for projects as varied as DNA barcoding to stop poachers and real-time monitoring of clean water.

This year, they seem to be breaking it up into regions, with the first Global Impact Challenge announced for the United Kingdom.

No plans to hold similar competitions in other countries have been announced, but the blog post announcement by Jacquelline Fuller, director of Google Giving, did say this – “Today we’re starting the hunt in the U.K., but we also know that nonprofits all over the world are using techy approaches to develop new solutions in their sector. Who knows, the Global Impact Challenge might head your way next.”

Google has invited non-profits in the U.K. to send in their applications explaining how they are using technology to change lives. Ten finalists will be announced on May 22, 2013. People can then vote for these finalists to select the fan favorite.

Three other winners will be chosen by a judging panel on June 3 after they listen to presentations by all the finalists. Each of the four winners will get £500,000 (more than $760,000), along with tech help from Google staff and equipment such as Chromebooks.

Registered non-profits can apply here. On its Global Impact Challenge page, Google says applicants must have a “technology-based project that has the potential to change society on a large scale.”

The projects will be reviewed and the finalists chosen based on three criteria:-

1. How is the innovation and technology improving lives?

2. If the non-profit wins the award, how will they implement it?

3. Track record, collaborations, and a plan to successfully execute the project immediately.

Last year’s seven winners included the World Wildlife Fund, which got $5 million for innovations in wildlife tagging technology. The Consortium for the Barcode of Life, which is part of the Smithsonian Institution, got $3 million to create and implement DNA barcoding to stop wildlife trafficking.

DonorsChoose.org got $5 million to help public schools in the U.S. create more AP science and math courses. Equal Opportunity Schools got $1.8 million to use data analytics for identifying 6,000 talented but underrepresented students and moving them to advanced classes.

All told, Google’s giving to organizations changing the world last year added up to $100 million in grants, a billion dollars worth of technology, and 50,000 hours volunteered by Googlers.

Former GM Plant in Kansas City to Become Industrial Park With 2000 Jobs

Mar 23

The Unified Government Board of Commissioners of Wyandotte County and Kansas City, Kansas, has approved a development agreement with NorthPoint Development to create the Central Industrial Park on the site of a former General Motors plant.

Central Industrial Park, Kansas City (photo – beyondthecontract.com)

The conversion of the 80-acre auto assembly plant site in the Faixfax Industrial District will require a capital investment of $40 million, and the project will create 2,000 new jobs.

The property is currently owned by the RACER (Revitalizing Auto Communities Environmental Response) Trust, which was set up expressly after the GM bankruptcy to get 89 former GM sites in 14 states cleaned up and sold for redevelopment in a way that would benefit the communities the sites were in.

RACER had recently finalized a purchase agreement for the Fairfax site with NorthPoint, subject to Northpoint getting approval for development by the board of commissioners.

RACER Trustee Elliott P. Laws said that the plan for an industrial park was a strong commitment to the community by Northpoint

“I congratulate NorthPoint, the Unified Government and the people of the Kansas City metropolitan area who ultimately will benefit from the jobs and other economic opportunities created by this investment,” added Laws.

Kansas City Mayor/CEO Joe Reardon said the huge number of jobs created by the RACER project, which is close to GM’s current plant in the city, is a testament to “what can be achieved through private and public partnerships that help grow our local economy.”

The proximity to GM’s current plant makes the industrial park ideal for GM’s automotive suppliers.

The complete development will take between six years to a decade, and the park will support at least three and at most eight manufacturing facilities. The projected 2,000 jobs at full capacity stand true regardless of how many tenants take up space.

Northpoint COO Chad Meyer said they were thrilled to be part of a project where a brownfield site was being redeveloped into an industrial park. Meyer said Northpoint will get started with the construction on the site later this year, and expects the first tenants to move in and begin operations next year in the fall.

They will be eligible for local tax incentives including industrial revenue bonds only after making the necessary infrastructure improvement investments for roads, water supply and utility lines to service the industrial park, in addition to reaching a threshold on above-ground construction.

Deutsche Bank Gets $1.94M Incentives for Jacksonville, FL Expansion

Mar 21

The City of Jacksonville, Florida has put together a $1.94 million state and local incentives package to secure an expansion project by Deutsche Bank.

Jacksonville, FL (photo – coj.net)

As per the economic development agreement, Deutsche Bank will invest $10 million and create 300 new jobs by 2016. Deutsche Bank already has 1,349 employees in Jacksonville.

The new jobs will have average annual wages of $62,063, which is 150 percent more than the state’s average annual wage for the private sector.

The agreement, executed between the City and DB Services New Jersey Inc., DB Services Americas, Inc., and Deutsche Bank Securities, Inc. calls for the expansion project to be approved as a QTI (qualified target industry) business. These are the American subsidiaries of the parent company – Germany-based Deutsche Bank.

As QTI business, Deutsche Bank will be approved for with QTI tax refunds to the tune of $360,000. The State of Florida will chip in with $1,440,000 in matching funds. The total QTI Refunds worth $1.8 million for 300 jobs means that Deutsche Bank is getting a $6,000 grant for creating each new job.

The City of Jacksonville is additionally offering Deutsche Bank a $140,000 REV (recapture enhanced value) grant that will be paid out in annual installments over a five year period. This puts the city’s local incentives package offering at $500,000.

This latest expansion by Deutsche Bank comes right on the heels of the completion of a previous $10 million expansion of their Southside campus in Dec 2012 which added 30,000 square feet and 260 new jobs at average annual wages of $52,722, which works out to an additional payroll of $18 million.

For this previous expansion, Jacksonville provided Deutsche Bank with a similar incentives package worth $5,000 per job. This included a $145,000 REV grant and another $260,000 as 20 percent of the QTI Refunds, with the remaining 80 percent provided by the state as matching funds.

At that time, Jacksonville Mayor Alvin Brown said that the Deutsche Bank expansion was part of a hopeful trend towards better days. “Jacksonville is open for business. Unemployment is falling. We’re cutting ribbons. Jobs are coming back – but these aren’t just jobs. They are good-paying career opportunities. And they have the potential to make a serious impact,” added Mayor Brown.

Yahoo Planning Expansion in Western NY

Mar 20

Sunnyvale, CA-based Yahoo! Inc. (NASDAQ: YHOO) is planning an expansion of its east coast data center in the Town of Lockport, New York. The company may also be opening a new call center in the Buffalo-Niagara region.

Yahoo! (photo – nysenate.gov)

The expansion will create 15 new jobs, adding to the data center’s 77 existing jobs. The call center will reportedly create 100 new jobs.

The two projects together will involve millions of dollars in investments. Yahoo executives are set to meet with the Lockport IDA on Thursday morning at a special IDA board meeting called to discuss a tax abatement proposal.

The call center location will be close to the Niagara Power Project. The incentives package Yahoo is expecting includes hydropower from the New York Power Authority (NYPA) at a low cost. Empire State Development is additionally expected to approve tax credits worth $2 million.

The Lockport data center project was announced in 2009, and unveiled in Sept 2010. At that time, Yahoo touted it as the first of its “Yahoo! Computing Coop” (YCC) data center designs which made it one of the world’s most environment-friendly and energy efficient data centers.

The narrow YCC design that allows for natural airflow combined with the cool climate at the site location in Lockport vastly reduces the amount of power required to keep the data center cool.

At that time, Yahoo was awarded $9.9 million from the U.S. Dept. of Energy as a sustainability grant provided through New York State Electric & Gas (NYSEG). NYPA has so far approved 16 megawatts of low cost hydropower for the Lockport data center.

To secure the project in 2009, the Lockport IDA agreed to a 20-year PILOT (payment in lieu of taxes) arrangement for property taxes, with zero payment for the first ten years. Yahoo was also approved for mortgage tax abatement and a 20-year sales tax abatement.

All put together, the company was approved for incentives valued at around $268 million in return for a $171 million two-phase investment that would create 125 high-paying jobs with average annual wages of $65,000. They have completed phase one with a $150 million investment and created 77 jobs so far.

Report – Florida College System has $26.6B Economic Impact

Mar 19

A new report put out by the Council of Presidents of the Florida College System (FCS) says that the state’s 28 colleges have a combined economic impact of $26.6 billion on the state economy.

FCS (photo – fcscouncils.org)

The report was prepared by Economic Modeling Specialists Intl. (EMSI) for the FCS Foundation and the FCS Council of Presidents.

Highlights from the report, broken up into investment and economic growth analysis:-

1. Investment Analysis:-

For FY 2011-12, FCS received $1.2 billion in the form of state government funding. Taxpayers get a return on investment of 9.4 percent on investments made into FCS.

The average rate of return for students is 16.8 percent, with a cost-benefit ratio of 6.0. This means they will get $6 in higher income in the future for every $1 invested into education in FCS.

A student graduating with an associate’s degree can expect to earn on average $10,600 (35 percent) more than someone with a high school diploma. As per the study, students will recover all their spending on tuition, college fees and wages they might otherwise have earned in just over nine years.

FCS is also credited with reducing $158.6 million in annual social costs for the public in areas such as crime, welfare and unemployment.

2. Economic Growth:-

The income for faculty and staff combined with FCS operations and capital spending add up to a net impact of $1.3 billion on the state economy. Spending by out of state students adds another $24.9 million.

The report pegs student productivity impact – higher incomes after they join or rejoin the workforce that can be attributed to their FCS education – at $25.2 billion. This is for FY 2011-12, based on accumulated credits for the past three decades.

All this put together means that FCS and its current and former students are responsible for a $26.6 billion slice (four percent) of Florida’s economy.

The report authors conclude that FCS is a sound investment from many different perspectives. It benefits taxpayers, enriches students’ lives and income, and is a contributing factor for the continued vitality of both state and local economies.

Read the full “Economic Contribution of the Florida College System” report from FCS – Download (pdf)

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