Economic Development

Virginia Governor Vetoes Bill Citing Economic Development Project Confidentiality

Virginia Governor Terry McAuliffe has vetoed legislation that would have imposed a $50 limit on gifts and donations being made to him by anyone seeking state economic development incentives through the Governor’s Development Opportunity Fund.

HB 1212 veto

HB 1212 veto

The bill (HB 1212), if it had become law, would have prohibited the “Governor, his campaign committee, and any political action committee established on his behalf” from knowingly soliciting or accepting contributions, gifts or any item valued at more than $50 from entities and persons who are seeking loans or grants from the Governor’s Development Opportunity Fund.

Any violation would have resulted in a penalty of $500 or twice the amount of the gift or contribution, whichever was higher.

The Governor has the authority to award incentives at his discretion from the Governor’s Opportunity Fund (GOF) in order to secure business expansion or relocation projects for Virginia.

The legislation to amend the Code of Virginia related to this Fund was approved unanimously with bipartisan support by the Virginia Legislature. The House of Delegates passed HB 1212 on Feb 11, 2014 and the Senate approved the companion bill on March 3.

The bill, as passed by both the House and Senate, was then sent to the Governor for his signature. But Gov. McAuliffe sent it back to the House on April 7 with recommendations.

The changes required would have imposed the $50 limit not just on the Governor, but also on legislators. Another recommendation was that the bill be re-enacted by the 2015 Session of the General Assembly.

In his statement announcing the veto, Gov. McAuliffe said that the recommendations he had asked for “would avoid unintended consequences and protect confidentiality for ongoing economic development projects.”

In the fiscal impact statement for HB 1212, it is mentioned that the bill will have no fiscal impact on the Virginia Economic Development Partnership, the lead state organization providing business expansion and site selection services in Virginia.

However, neither the bill nor the impact statement makes any mention of how the legislation would affect economic development projects that are already in the works.

The House rejected the recommendations on April 23, 2014, and the bill was sent back to the Governor as is. Gov. McAuliffe announced his veto of the bill on May 23, 2014.

Study – Economic and Fiscal Impact of Facebook Data Center in Prineville, Oregon

When it comes to data center projects, people tend to be disappointed by the relatively low number of jobs created, in contrast to the high capital investments for facility construction and equipment purchase.

Facebook Prineville, OR Data Center

Facebook Prineville, OR Data Center (photo – facebook.com/PrinevilleDataCenter)

But Facebook now wants to dispel this notion, and commissioned an economic and fiscal impact study of their Prineville, Oregon data center on a regional and statewide level.

The study, prepared by economic consulting firm ECONorthwest, provides detailed information about the jobs created, capital spending and economic output generated in Central Oregon and across the state during the five-year construction period as well as for ongoing non-construction data center operations thereafter.

A few highlights from the report:-

Five-year Construction Period Impact – According to the study, the construction of the Facebook Prineville Data Center project is credited with creating a total of 3,592 jobs in Oregon, including 651 jobs in Central Oregon.

The project generated $573 million in capital spending statewide, and enough personal income from construction activities in the 2009-2013 period to result in the State getting additional income taxes to the tune of more than $6.5 million.

Data Center Operations Impact – The operation of the Facebook data center in Prineville in 2013 alone is linked to 207 jobs and $45 million in output in Central Oregon. The impact on the entire state increases to 266 jobs and $64.7 million in output.

The data center’s 2013 operations have resulted in property tax revenue worth nearly $500,000, and more than $750,000 in state income taxes.

Facebook released a statement in which it says – “We’re pleased to continue to have a positive impact on the economies of Prineville, Crook County, and Central Oregon… Our Prineville data center is part of the fabric that powers Facebook, and we are grateful to be a part of this community for the long term.”

Apart from the economic and fiscal impact of the data center construction and operations, Facebook has also had a significant impact in other areas such as STEM education and community development in Prineville, Crook County and the rest of Central Oregon.

Through their community action grants program and other local donations, Facebook has awarded $965,000 so far to Crook County schools and qualified non-profits in the region.

Read the full Facebook Prineville, OR Data Center Impact Study – Download (pdf)

 

Vermont Economic Development Authority Gets $4.4M in SSBCI Funding

The Vermont Economic Development Authority has received another $4.4 million from the U.S. Treasury Department to help the state enhance lending to small businesses in Vermont.

SSBCI

SSBCI (photo – treasury.gov)

The $4.4 million in federal funding was provided to VEDA by the Treasury under the State Small Business Credit Initiative (SSBCI).

This is the third and final installment of SSBCI funding being awarded to Vermont, which had been allocated a total of $13.2 million under the program in May 2011.

Vermont Governor Peter Shumlin said this is great news for the state’s small business owners and their employees. Gov. Shumlin said VEDA is receiving the third installment after having successfully lent the prior $8.7 million it has previously received in SSBCI funding.

The Governor noted that to-date, this federal funding under SSBCCI has allowed Vermont businesses to generate an additional $116.7 million in private sector financing.

The State Small Business Credit Initiative was created the Small Business Jobs Act of 2010, funded with funded with $1.5 billion that would be allocated to state economic development agencies in support of state lending programs to small businesses and small manufacturers.

Participating states are expected to use the federal funding for enhancing programs that leverage private lending for small businesses and manufacturers who want to expand and create jobs, but are not able to get the loans and investment they need from traditional funding sources.

VEDA CEO Jo Bradley said the allocation increases the availability of low-interest financing for small businesses in Vermont.

Bradley added that the Vermont Economic Development Authority is pleased to be able to continue the program, and added that with the help of the state’s financial institutions, they should be able to leverage private capital and continue moving Vermont’s economy forward.

The SSBCI funding helps leverage $10 in private capital for every federal dollar allocated, and is expected to spur a total of up to $15 billion in lending to small businesses by the program’s end.

According to the latest quarterly report, the U.S. Treasury has already allocated more than $1 billion out of the total $1.5 billion in SSBCI funding, and participating states have in turn expended, obligated, transferred, or recycled $750 million.

 

Detroit Economic Development Gets $100M Boost From JP Morgan Chase

JP Morgan Chase is expanding their commitment to Detroit with a new $100 million investment over the next five years to help speed up the economic recovery and community revitalization that is already underway.

JP Morgan Chase investment in Detroit

JP Morgan Chase investment in Detroit

The announcement is scheduled to be made jointly by JP Morgan Chase CEO Jamie Dimon, Detroit Mayor Mike Duggan and Michigan Governor Rick Snyder.

The $100 million will be invested in highly specific areas that will aid existing and planned Detroit economic development efforts and programs.

Here’s the breakup:-

Community Development ($50 million) – JP Morgan Chase will provide $50 million in the form of grants and long-term investments to two Community Development Financial Institutions. With the help of these two CDFIs, JP Morgan Chase will create two new funds that will in turn provide financing for critical projects that lack access to traditional funding sources.

Blight ($25 million) – JP Morgan Chase will team up with organizations such as the Detroit Blight Removal Task Force and the Detroit Land Bank Authority, helping them expand their reach and accelerate efforts to end blight, and stabilize and revitalize neighborhoods across the city.

Workforce Readiness ($12.5 million) РThis new $12.5 million investment will support workforce rediness efforts in Detroit under JP Morgan Chase’s $250 million global five-year New Skills at Work initiative.

Growing Small Businesses ($7 million) – This $7 million will be used to support innovative programs and organizations such as Detroit Eastern Market and startup accelerator Bizdom that are helping small business owners and entrepreneurs in Detroit launch and grow their business.

Seeding Future Economic Growth ($5.5 million) – A part of this investment will go to the M-1 Rail streetcar project which holds potential for economic development and urban renewal in downtown Detroit. Apart from a $1.5 million philanthropic grant to the non-profit M-1 RAIL, JP Morgan Chase is also providing another $1 million to Midtown Detroit Inc. to assist with a program to mitigate the temporary impact of the M-1 Rail construction on local businesses.

They will also bring the Global Cities Initiative (GCI) to Detroit. This is a joint initiative established by JP Morgan Chase and the Brookings Institution, which helps bring together policymakers with business leaders and other interested stakeholders in participating cities to collaborate on strategies for improving the city’s global competitiveness.

JP Morgan Chase will also provide experienced skills to Detroit’s non-profits by sending volunteers through the JPMorgan Chase Detroit Service Corps to help these non-profits solve challenging problems being faced by communities.

Read more about JP Morgan’s Detroit economic development investment plans in each of these categories here.

Iowa Councils of Governments Get U.S. Economic Development Administration Funding

The U.S. Economic Development Administration has awarded three Iowa Councils of Governments a total of $183,000.

Region XII Council of Governments in Carroll, IA

Region XII Council of Governments in Carroll, IA (photo – region12cog.org)

The three recipients getting $61,000 each from the EDA are the Region XII Council of Governments, Area 15 Regional Planning Commission, and the North Iowa Area Council of Governments.

These Councils of Governments will use the EDA funding to create economic development strategies for their regions.

Each project will bring together the public and private sector in the region to help create an economic development roadmap that diversifies and strengthens the region’s economy.

It is expected that the EDA funding will ultimately lead to the development of a process and strategy that supports increased private capital investment and job creation.

The announcement was made by U.S. Senator for Iowa Tom Harkin, who said that establishing a sound economic development strategy that unites the public and private sectors is the key to promoting regional growth and creating job opportunities.

Sen. Harkin added that the EDA’s investment will assist these communities in charting long-term strategies for creating jobs and becoming more prosperous.

The Region XII Council of Governments located in Carroll, IA was formed in 1973 to assist local governments in western Iowa, and covers Audubon, Carroll, Crawford, Greene, Guthrie and Sac Counties. The COG was originally formed to assist with grant writing and planning, but its functions have grown to include multi-community collaboration and development focusing on areas such as local assistance, workforce development and transit.

The Area 15 Regional Planning Commission located in Ottumwa, IA began operations in 1974, and serves a six-county area is southern Iowa including Davis, Jefferson, Keokuk, Mahaska, Van Buren, and Wapello counties. Services provided by the Area 15 RPC to local governments cover broad categories such as economic development, community development and transportation planning.

The North Iowa Area Council of Governments located in Mason City, IA serves local governments in an eight-county area that includes Cerro Gordo, Floyd, Franklin, Hancock, Kossuth, Mitchell, Winnebago, and Worth counties.

NIACOG’s services in fields such as economic and community development, housing and transportation are divided into programs it administers, and those that are run by state and federal agencies including the U.S. EDA, U.S. Small Business Administration and the Iowa Department of Economic Development.

NYC Launches Tech Talent Pipeline Workforce Development Initiative

NYC Mayor Bill de Blasio announced the launch of a $10 million workforce development initiative to support the growth of NYC’s tech sector.

NYC Mayor Bill de Blasio's keynote address at Internet Week New York

NYC Mayor Bill de Blasio’s keynote address at Internet Week New York (photo – nyc.gov)

The announcement was made by Mayor de Blasio in his keynote address during the opening session of Internet Week New York 2014.

The initiative, called the Tech Talent Pipeline, will combine city, state, federal, and private sector funding to come up with a budget of $10 million spread across three years.

Employers will be engaged to help “build” the talent pipeline, with new curricula being designed to meet the needs of employers, so that New Yorkers can be recruited and trained to meet these needs.

The public-private initiative will include JP Morgan Chase as the inaugural funder, with the NYC Workforce Funders and NY Community Trust committing to step up with more funding in future.

The Tech Talent Pipeline will build on the existing relationships with CUNY, the New York City Department of Education, and the Department of Small Business Services.

This was one of several reforms and initiatives the Mayor said his administration is pursuing to make New York City the world’s most tech-friendly and innovation-driven city.

Another workforce development initiative being launched is the Jobs for New Yorkers Task Force, whose members will be industry leaders from the tech and education sectors, and advocates for low-income New Yorkers.

The mission of this task force will be to bring about a fundamental shift in the City’s workforce development programs, making workforce training more nimble and responsive. Mayor de Blasio and NYC Deputy Mayor for Housing and Economic Development Alicia Glen will be announcing the names of the task force members tomorrow.

Another important reform program being launched is a restructuring of the RFP process for tech firms doing business with the City, with an increased emphasis on local hiring and economic impact. The City is also streamlining the procurement process to make it easier for small firms to bid for city government contracts.

Mayor de Blasio also mentioned several initiates to expand broadband access and free public Wi-Fi.

“Technology is critical to New York’s place as a 21st Century city. Not just because tech brings lots of investment and jobs—but because successful cities have always thrived on the disruption new technology brings,” said Mayor Bill de Blasio.

NYC Economic Development Corp Responds to Open Letter on Future of NYC’s Tech Community

There was a minor kerfuffle in a teacup last week in NYC when MediaRadar CEO Todd Krizelman wrote an open letter to Mayor de Blasio citing concerns about the future of NYC’s tech community.

Tech in NYC

Tech NYC (photo – nycedc.com)

The administration’s response to the letter was quickly provided by NYC Economic Development Corp President Kyle Kimball.

You can read both letters in their entirety here and here, but the gist of it is highlighted below.

Krizelman begins by pointing out that he was in the inaugural 2010 class of NYCEDC Tech Entrepreneurs, and a supporter of Mayor Bloomberg’s efforts aimed at recruiting and retaining technology companies.

But there is now growing concern in the tech industry, says Krizelman, that the new administration “doesn’t particularly care for high-tech in NYC.”

He then goes on to list the reasons the administration needs to embrace the technology sector. Krizelman cites statistics from the recently released New York City tech ecosystem study, including that NYC’s tech workers earn 49 percent more the average citywide hourly wage rate, and the tech sector is one of the fastest growing segments of the economy.

The tech eco-system employs 291,000 people (seven percent of the workforce), but brought in 12.3 percent ($5.6 billion) of the City’s 2013 tax revenue, nearly double its proportional share.

Krizelman also notes tech sector employees are socially conscientious, and tech companies benefit the outer boroughs too. He adds that 90 percent of MediaRadar’s staff in their Manhattan office live outside Manhattan and are pumping earnings back into local communities.

The letter ends with Krizelman saying he is looking forward to hearing more about the administration’s investments and outreach to continue making technology in NYC a global leader.

In response, NYCEDC President Kyle Kimball notes that he wanted to respond to the open letter so that Krizelman and the entire tech community knows that supporting and growing NYC’s tech ecosystem continues to be one of their core economic development priorities.

Kimball cites many of the ongoing programs and initiatives, including the Tech Talent Draft, NYC GenerationTech, the BigApps challenge, the recent launch of the .nyc domain, RFPs for the creation of a citywide network of Internet hotspots, the launch of Tech for UPK, and the Urban Future Lab in Downtown Brooklyn.

Mayor de Blasio himself will be speaking about his vision for the role of the technology sector in NYC and his administration’s plans to support and grow the city’s innovation economy, when he kicks off Internet Week New York today with a welcome address.

The list of speakers at the event includes, among others, Empire State Development Commissioner, President and CEO Kenneth Adams; and NYC Deputy Mayor for Housing and Economic Development Alicia Glen.

Washington State Awards Grants to Help Counties With Economic Development Planning

The Washington State Community Economic Revitalization Board (CERB) has awarded two counties economic development planning grants.

Washington CERB

Washington CERB (photo – commerce.wa.gov)

The $89,750 in CERB grants, along with matching local funds, will aid Chelan and Whitman Counties develop strategic decisions regarding potential future investments that promote economic development.

One of the grant recipients is the Port of Whitman County, which is getting $50,000 to assist in the evaluation of construction of an LEED-certified building. the plan is for spaces in the green building to be leased out to startups and companies that emerge from Washington State University.

The grant funding provided by the state for the evaluation stage of this project is being matched with $16,500 in local funds.

The second CERB grant recipient is the City of Wenatchee, WA. The City is getting $39,750 as a grant for conducting a market analysis associated with their plan to create a strategy for redevelopment and recruitment. A plan will be developed for South Wenatchee too, in conjunction with the market analysis.

The state funding for the market analysis in Wenatchee is being matched by $13,250 in local funds.

CERB Chair Allen Brecke said that the Community Economic Revitalization Board is dedicated to helping communities across Washington develop the infrastructure needed for attracting, retaining and growing businesses and jobs. Brecke added that the CERB’s investments will have a positive impact at a time when it is most needed.

The Community Economic Revitalization Board was established in 1982 to respond to Washington economic development needs at a local level by providing grants for infrastructure improvements that will support business growth and expansions.

Apart from port facilities and construction of public buildings, CERB also provides grants for telecommunications and water related projects, including domestic and industrial water, wastewater and stormwater projects.

They have a two-tier application process. Tier 1 is an online application where local governments applying for a grant provide basic threshold information. CERB reverts back to applicants within three days to let them if the project meets the minimum requirements. If so, the applicant is sent a shortened paper application with supplemental questions for Tier 2.

The flexible and rapid response CERB brings to bear in quickly assisting communities with potential growth opportunities has generated more than 34,000 jobs. CERB grants and the required local matching funds have resulted in communities being able to attract $5.3 billion in additional private investments.

Alabama Reports Solid Year of Economic Development Activity

Governor Robert Bentley and the Alabama Department of Commerce released a report detailing the state’s economic development activity last year.

Alabama economic development report

Alabama economic development report

The 2013 New and Expanding Industries Report says that Alabama economic development activity in 2013 included 445 projects in various sectors that resulted in 16,847 announced jobs across the state.

A break-up of the data shows that 62 companies announced new projects in Alabama last year. These new projects are bringing 5,179 jobs and $2 billion in capital investment.

Expansions were announced by 383 other companies, accounting for 5,179 jobs and capital investment worth nearly $2.4 billion.

The report also says Alabama received nearly $1.4 billion in 2013 through foreign direct investments by 70 companies from all around the world. These projects are creating a total of 3,120 jobs.

In the three year period since Gov. Bentley took office in 2011, the state has racked up announcements of 54,942 new jobs being created, along with $13.9 billion in new investment.

Alabama also has got off to a running start in 2014, courtesy of the Remington Outdoor Co. project announcement that brings a $110 million manufacturing plant and more than 2,000 jobs to Huntsville.

Gov. Bentley said more companies are choosing Alabama because the state has the right business climate, low taxes and the best trained workforce of any state in the country.

The Governor also credited Accelerate Alabama, the plan put in place three years ago, which he said is helping them target industries they know can be successful in Alabama.

Secretary of Commerce Greg Canfield said the projects announced in Alabama in 2013 reflect the impressive diversity of the state’s advanced manufacturing sector, and shows that Alabama’s capabilities in research and engineering continue to expand.

Sec. Canfield added that products are not just being made in Alabama, but also increasingly being designed and engineered in Alabama.

Read the full 2013 Made in Alabama New and Expanding Industries Report – Download (pdf)

U.S. Senate Confirms Jay Williams as Assistant Secretary for Economic Development at EDA

The U.S. Senate has voted to confirm Jay Williams as Assistant Secretary of Commerce for Economic Development at the U.S. Economic Development Administration.

Jay Williams

Jay Williams

As head of the EDA, Williams will be responsible for fulfilling the agency’s mission of leading the federal economic development agenda.

“Given Jay’s wealth of private and public sector experience, I am confident in his ability to lead economic development efforts at the Department of Commerce and help build the foundation and set the conditions for economic growth and success in communities across the country,” said U.S. Commerce Secretary Penny Pritzker.

Roy Kojo Jawara (‘Jay’) Williams was born (1971) and raised in Youngstown, Ohio and graduated with a B.S.B.A. in finance from Youngstown State University.

Williams had a distinguished career in the banking sector, including as vice president at First Place Bank and a stint at the Federal Reserve Bank of Cleveland. His transition to the public sector began as director of Community Development in Youngstown, OH, where he helped implement a citywide redevelopment plan called Youngstown 2010.

Jay Williams then sought elected office and served as Mayor of Youngstown from 2006 to 2011. During his tenure as Mayor, Williams led efforts that have had a direct impact on improving the quality of life of residents in Youngstown.

His efforts were acknowledged in 2007 when he received the John F. Kennedy New Frontier Award. This award is given annually by the JFK Library Foundation and the Harvard University Institute of Politics to two exceptional young Americans under the age of 40 whose contributions through advocacy, elective office and community service demonstrate the value and impact of public service in the spirit of President Kennedy.

In Aug 2011, Williams was tapped as the executive director of the Office of Recovery for Auto Communities and Workers. At ORACW, he worked directly with state and local stakeholders in areas affected by changes in the automotive industry to ensure that they get the federal support needed.

In June 2012, Williams was appointed deputy director for the White House Office of Intergovernmental Affairs. In this position, he has been leading efforts to engage mayors, county officials and city council members from all over the country.

Williams said he is now looking forward to learning from and working with the U.S. Economic Development Administration staff and the Commerce Department team to promote regional collaboration and American innovation, and help the EDA fulfill its vital mission of helping distressed communities throughout the United States realize their local plans for growing jobs and businesses.

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