Economic Development

Brooklyn Tech Triangle to Get New 400,000 Square Foot Commercial Building

JEMB Realty, New York City Economic Development Corporation and NYC Deputy Mayor for Housing and Economic Development Alicia Glen announced a new commercial development that will bring 400,000 square feet of new office and retail space to the Brooklyn Tech Triangle.

Brooklyn Tech Triangle

Photo – brooklyntechtriangle.com

The project, located at 420 Albee Square, will be the first ground-up construction of commercial space in Downtown Brooklyn since the re-zoning of the area in 2004.

This development is a part of the Downtown Brooklyn Redevelopment Plan, a revitalization strategy under which the City has made $300 million in public investments in open space and infrastructure commitments.

The development is expected to create approximately 722 permanent jobs and 566 new construction jobs. The project announcement follows the release of a pair of reports that focus on the urgent need for commercial space to support continued growth.

One is a new analysis released by the NYC Economic Development Corp. which shows that market demand for new commercial space could reach up to 60 million square feet over the next ten years.

This report was released as part of a speech at the Crain’s Businesses Breakfast Forum, in which NYCEDC President Maria Torres-Springer outlined new and ongoing efforts by NYCEDC to create the space needed for continued economic growth and the creation of good jobs for New Yorkers.

The second report, an economic impact analysis released by the Brooklyn Tech Triangle Coalition, calls for the creation of 3.1 million square feet of office space to meet the needs of the rapidly expanding workforce and business community located in the Tech Triangle.

The Brooklyn Tech Triangle, which consists of Downtown Brooklyn, DUMBO, and the Brooklyn Navy Yard, has turned into New York City’s largest cluster of tech activity outside of Manhattan.

The Brooklyn Navy Yard is a 300-acre industrial park on the Brooklyn waterfront that was once the site of storied naval shipbuilding facilities, and is now home to hundreds of industrial businesses employing thousands of people.

The Downtown Brooklyn Partnership, working together with its three business improvement districts, manages over a million square feet of public space and undertakes diverse activities including attracting new investment and improving the environment for existing companies.

The DUMBO Improvement District advocates on behalf of DUMBO’s businesses, nonprofits, cultural organizations, property owners and residents, and provides community services and programming that amplify DUMBO’s creative and innovative vibe.

This Tech Triangle Coalition projects that they could generate $15.5 billion in economic impact by 2025, and the report highlights the need to support the future growth of the area through a series of recommendations.

The new JEMB Realty development, by adding at least 400,000 square feet of space, will help address this need for additional office space.

JEMB Chairman Morris Bailey said in a release that “We’re proud to be working with Mayor de Blasio and NYCEDC on this exciting project and investing in the continued growth of Brooklyn’s economy.”

NYC Deputy Mayor for Housing and Economic Development Alicia Glen added that “This is a fantastic project that will stoke Brooklyn’s economic engine and deliver the kind of high quality jobs and careers we want to secure our place in the 21st Century economy.”

NYCEDC President Maria Torres-Springer likewise noted that “Brooklyn’s Tech Triangle has seen incredible growth over the last decade, and with this new development, the City continues to invest in the neighborhood’s future and position the area as a center for innovation and job creation.”

DOT Grant For Baltimore-DC Maglev Train an Economic Development Opportunity For Maryland

The U.S. Department of Transportation’s Federal Railroad Administration (FRA) has awarded a $27.8 million grant to the State of Maryland for the potential development of a magnetic levitation train between Washington, D.C. and Baltimore, MD.

Northeast Maglev

Northeast Maglev (rendering- northeastmaglev.com)

This grant funding is part of the Department of Transportation’s commitment to supporting innovative efforts to strengthen intercity connections and create jobs. In 2005, Congress had authorized $90 million for maglev transportation projects that would be capable of safely transporting passengers faster than 240 miles per hour.

The Baltimore-Washington corridor was one of three corridors in the United States eligible to apply for these funds for Maglev projects. The funding that has been awarded to Maryland may be applied to preconstruction planning, engineering analysis, and other capital costs for fixed guideway infrastructure.

Maryland Governor Larry Hogan said in a release that the ability to travel between Baltimore and Washington, D.C. in only 15 minutes will be absolutely transformative, not just for these two cities, but for the entire state.

“This grant will go a long way in helping us determine our next steps in this transportation and economic development opportunity,” added Gov. Hogan.

The FRA grant has been awarded with the understanding that the Japanese government will be a source of significant financial backing for the project, along with private-sector support from Baltimore-Washington Rapid Rail LLC.

The Baltimore-Washington SCMaglev project is a privately sponsored initiative led by the Baltimore-Washington Rapid Rail. The train will provide a 15-minute ride between downtown Baltimore and downtown Washington, D.C., with an interim stop at Baltimore/Washington International Thurgood Marshall Airport.

It’s also an environment-friendly high-speed solution that will reduce rail noise and CO2 emissions in the northeast corridor. SCMAGLEV trains levitate inches off of the ground, so there is no noise or vibration caused by steel wheels rolling on rails.

Also, the trains are propelled by electricity from substations, so there is no diesel engine spewing smoke and pollution. CO2 emissions of the SCMAGLEV trains in Japan are estimated to be just one-third of a Boeing 777 airplane.

Japanese Ambassador Kenichiro Sasae said in the release that “Working with the United States Government, the State of Maryland and Baltimore-Washington Rapid Rail, we will prove that this cutting-edge Japanese technology will be a great asset to the busy Northeast Corridor.”

Wayne Rogers, chairman and chief executive officer for Baltimore-Washington Rapid Rail, noted that the SCMaglev project has the opportunity to transform not only Baltimore but the entire Northeast corridor.

The grant application was required to come through a public agency. So the Maryland Department of Transportation and the Maryland Economic Development Corporation applied as co-applicants for the grant on behalf of Baltimore-Washington Rapid Rail. With the federal funding now awarded, Baltimore-Washington Rapid Rail will be able to move forward to initiate planning and engineering analysis and review compliance and permitting.

NYC Unveils Action Plan to Grow 21st Century Industrial and Manufacturing Jobs

NYC Mayor Bill de Blasio and City Council Speaker Melissa Mark-Viverito have unveiled a 10-point action plan to modernize the City’s industrial policy.

Futureworks NYC

Futureworks NYC (photo -futureworks.nyc)

Backed by more than $115 million in newly announced City funding, the plan includes the launch of an Advanced Manufacturing Center by the NYC Economic Development Corporation, as part of an advanced manufacturing network called Futureworks NYC.

The plan also creates a new fund to spur industrial development, and provides training for New Yorkers for 21st century manufacturing jobs.

The new and current investments are expected to generate more than 20,000 new jobs and support the city’s existing 530,000 manufacturing and industrial jobs.

Mayor de Blasio said in a release that manufacturing isn’t just past of New York City’s past, but is a thriving part of the city’s 21st century economy. “These investments are going to generate tens of thousands of good jobs for New York City families,” added Mayor de Blasio.

Speaker Melissa Mark-Viverito said that “The Industrial Action Plan will strengthen and invest in our city’s core industrial areas and provide essential protections against non-industrial uses and development.”

NYCEDC President Maria Torres-Springer added that “By creating a new fund to spur industrial development, and launching the Futureworks NYC network of advanced manufacturing spaces, we are helping to grow an industrial economy for the 21st century.”

Here’s a brief outline of the 10-point Industrial Action Plan:

1. Invest in City-Owned Industrial Assets – The City will invest a total of $442 million in City-owned industrial properties, including the Brooklyn Navy Yard, Brooklyn Army Terminal, Sunset Park, and Hunts Point.

2. Limit New Hotels and Personal Storage in Core Industrial Areas – Create a new special permit that will be required for any hotel developments in M1 districts within IBZs, and implement restrictions on personal mini-storage and household goods storage facilities in IBZs through appropriate land use controls.

3. Create New Models for Flexible Workspace and Innovation Districts – Begin developing the framework for re-imagined Mixed Used districts with the North Brooklyn IBZ study currently underway.

4. Strengthen Core Industrial Areas – Going forward, no private applications for residential uses in IBZs will be supported by the Council or Administration.

5. Create an Industrial and Manufacturing Fund – The fund will provide $64 million in City loans and grants, which will in turn leverage an additional $86 million dollars in private investment. This fund is expected to fuel the creation of approximately 400,000 square feet of space and approximately 1,200 new jobs.

6. Launch Futureworks NYC Advanced Manufacturing Network – The NYC Economic Development Corp will leverage up to $10 million in both public and private resources for the creation of an Advanced Manufacturing Center. The Center will provide as much as 40,000 square feet of shared workspaces and equipment, such as 3D printers and robotics, for both new entrepreneurs and established manufacturers.

The Center will also serve as the cornerstone of a new $3 million Advanced Manufacturing Network called Futureworks NYC. This network and the Advanced Manufacturing Center will directly support over 3,000 jobs.

7. Expand Brownfields Jumpstart Program – A $500,000 expansion of the City’s Brownfield Jumpstart Program will provide grants to industrial and manufacturing businesses for site investigation and cleanup efforts.

8. Re-launch Industrial Business Solutions Providers Network – Baselined funding of $1.5 million per year to relaunch the City’s Industrial Business Solutions Providers (IBSPs) network to provide critical support services to 400 unique businesses in 21 IBZs citywide.

9. Create Industry Partnerships to Bolster Workforce Development – The City will provide $750,000 in funding to launch a Career Pathways initiative for the industrial and manufacturing sector. This partnership initiative will be led by the Office of Workforce Development, SBS and NYCEDC.

10. Establish Career Centers in IBZs – SBS will create up to five additional satellite centers in select IBZs with high job density. Each center will have the ability to serve 500 local businesses and 1,000 residents every year.

US Economic Development Administration Grant For NUL Baltimore Entrepreneurship Center Program

The U.S. Economic Development Administration has awarded a $300,000 grant to the National Urban League for the development of a new Entrepreneurship Center Program in Baltimore, MD.

NUL Entrepreneurship Center Program

Photo – nul.iamempowered.com

The program will provide training and technical assistance to micro-business owners as well as entrepreneurs who have been financially affected by the recent unrest in the region.

Services including workshops, seminars, one-on-one counseling and mentoring provided by the NUL Entrepreneurship Center Program (ECP) in Baltimore will save or create an estimated 36 jobs in the first 12 months, and generate $1 million in contracting and bonding opportunities.

U.S. Assistant Secretary of Commerce for Economic Development Jay Williams joined Baltimore Mayor Stephanie Rawlings-Blake and National Urban League CEO Marc Morial for the announcement.

Assistant Secretary Williams said in a release that this EDA investment will not only help Baltimore’s economy rebound, but it will provide new opportunities that will ultimately make it stronger and more resilient in the future.

“I applaud the Urban League for its efforts to support local businesses and build a brighter future for the people of Baltimore,” added Assistant Secretary Williams.

Mayor Rawlings-Blake likewise said that the Center will provide badly needed resources to dozens of entrepreneurs, and will contribute to Baltimore economic development. “These entrepreneurs will not only increase their own incomes and their own ability to provide for their families, but they will also be able to leverage their success to create jobs and opportunities for friends, neighbors and relatives who might otherwise remain unemployed or under-employed,” said Mayor Rawlings-Blake.

The Baltimore ECP joins other existing NUL ECP Centers that operate in in Urban League affiliate offices in Atlanta, Cincinnati, Chicago, Cleveland, Jacksonville, Kansas City, Los Angeles and Philadelphia.

Apart from seminars for startups and small/micro-enterprises as well as a series of weekly on-site workshops, the ECP will also provide individualized consultation for entrepreneurs enrolled in the program through staff and consultants as well as access to workspace, infrastructure, and equipment to support their ventures.

ECP centers help minority entrepreneurs take advantage of new business opportunities and qualify for financing that puts them on the path towards high-level business growth through the application of proper management skills.

NUL CEO Marc Morial noted that small businesses have always played a critical role as job creators and wealth generators, particularly in communities of color. “The Entrepreneurship Center Program opens up new business opportunities for minority entrepreneurs to qualify for financing and receive individual and group training,” added Morial.

Chattanooga, Tennessee Get Strong Expansion Commitment From Volkswagen

Timed to coincide with a Tennessee Senate hearing called to look into economic development incentives awarded to Volkswagen, the company reaffirmed its commitment to the ongoing expansion of its Chattanooga facility.

Volkswagen Chattanooga

Volkswagen Chattanooga (press photo – vw.com)

Volkswagen Group issued a release reaffirming its expansion plans with an investment of approximately $900 million for the production of a newly developed, seven-passenger SUV. In the state of Tennessee alone, Volkswagen Group anticipates a $600 million investment and creation of 2,000 additional jobs.

Volkswagen Group of America President and CEO Michael Horn said in the release that “The United States continues to be one of the most important markets for Volkswagen, and our commitment to Chattanooga and the state of Tennessee is clear proof of that.”

Volkswagen Chattanooga President and CEO Christian Koch added that they reaffirm their support of the Chattanooga plant, their employees and the broader community. “We know we have a lot of hard work ahead of us, but this is a crucial moment in our efforts to deepen our commitment to America,” added Koch.

Koch was one of those who present for the TN Senate Finance, Ways and Means Committee hearing, along with Tennessee Department of Economic and Community Development Commissioner Randy Boyd. The hearing was called to look into the safety and sustainability of the large state investments in Volkswagen’s Chattanooga operations.

The company was approved to receive around $577 million in Tennessee economic development incentives to secure the original project and help build the plant.

Volkswagen has already invested more than $1 billion in its factory in Chattanooga, which now has more than 2,400 existing employees. The company is now getting additional incentives for the ongoing expansion to enable production of the new SUV at the plant. Volkswagen stands to get $165 million in state incentives this year alone.

Lawmakers and officials attending the hearing were mostly supportive of the company, which is still struggling to get a handle on the worldwide impact of the emissions cheating scandal. Sales of diesel Passat sedans, which make up around one fourth of the vehicles produced by Volkswagen in Chattanooga, have been halted because of the scandal.

Following the hearing, TNECD Commissioner Randy Boyd went down personally to a dealership and placed an order for the first new SUV that will roll off the Volkswagen Chattanooga line in early 2017.

“We must all keep in mind that we have over 2,000 proud, hardworking Tennesseans working for VW and while none of them did anything wrong, they are feeling the pain,” said Commissioner Boyd in a Facebook update posted by TNECD. “These are challenging times for them. These are our neighbors, our friends, our fellow Tennesseans. They need our moral support. Tennesseans always stand together in times of need and we need to let them know we stand with them.”

Los Angeles Economic Development Prospects Brighten With Northrop Grumman USAF Bomber Contract

The U.S. Air Force has awarded a contract worth tens of billions of dollars to Northrop Grumman Corp. for engineering and manufacturing development and early production for the Long Range Strike Bomber (LRS-B).

Plant 42 in Palmdale, CA

Plant 42 in Palmdale, CA (photo – Malfita/wikipedia)

The contract for Northrop Grumman considerably brightens prospects for the City of Palmdale and Los Angeles County, which are likely to get a significant part of the work related to the contract, resulting in the creation of thousands of jobs.

The LRS-B contract is composed of two parts. The Engineering and Manufacturing Development (EMD) phase is a cost-reimbursable type contract estimated at $21.4 billion in 2010 dollars.

The second part of the contract is composed of options for the first five production lots, comprising 21 aircraft out of the total fleet of 100. Based on approved requirements, the Average Procurement Unit Cost (APUC) per aircraft is required to be equal to or less than $550 million per aircraft in 2010 dollars.

Wes Bush, chairman, chief executive officer and president, Northrop Grumman, said in a release that “As the company that developed and delivered the B-2 Spirit stealth bomber, we look forward to providing the Air Force with a highly-capable and affordable next-generation Long-Range Strike Bomber.”

Bush added that their team has the resources in place to execute this important program, and they’re ready to get to work. The assembly of the LRS-B is expected to take place at U.S. Air Force Plant 42 in the City of Palmdale, CA. This is a USAF facility located about 60 miles from downtown Los Angeles.

Aerospace contractors, including Northrop Grumman, lease space from the Air Force at Plant 42, which has 3.2 million square feet of industrial space. Northrop Grumman completed its B-2 final assembly and modification at Plant 42, and this is where the LRS-B work is expected to be done too.

Plant 42 is already the Antelope Valley’s largest employer, and the Northrop Grumman contract is expected to provide another big boost to the aerospace supply chain and regional employment supported by this complex.

The Los Angeles County Economic Development Corp (LAEDC) issued a release thanking the County of Los Angeles, State of California and City of Palmdale, all of which enacted tax incentives to help attract these jobs to the region.

LAEDC CEO Bill Allen said in the release that this is a tremendous win for Northrop Grumman. “It is also a testament to the unparalleled quality and productivity of the aerospace workforce in L.A. County and our region’s ability to compete successfully to attract thousands of well paying jobs for our residents for many years to come,” added Allen.

LAEDC Chief Operating Officer David Flaks noted that “Through its SoCal jobs Defense Council, the LAEDC, along with a broad coalition of public, private, nonprofit and labor stakeholders, was instrumental in successfully advancing the state tax credit legislation for advanced strategic aircraft programs that will help keep this program here.”

The legislation in question (AB 2389 and SB 718) is helping create and retain aerospace industry jobs by providing local property tax rebates and a corporate income tax credit for 15 years to California companies bidding on the U.S. Air Force contract.

AB 2389 was passed first by the California Legislature, providing an aerospace tax credit to assist a joint bid for the LRS-B contract by Lockheed Martin and Boeing. Northrop Grumman objected to the bill as favoring one of the bidders trying to win the contract, so SB 718 was passed to extend a similar tax credit to Northrop Grumman.

Bayview Correctional Facility to Become Women’s Building With 300 NYC Jobs

The former Bayview Correctional Facility, a historic and iconic former prison in Manhattan’s Chelsea neighborhood, will become the first-ever “Women’s Building” in New York State.

Womens Building, NY

Womens Building, NY (photo – ny.gov)

The 100,000 square-foot space will be renovated by the NoVo Foundation and Goren Group to include dedicated working space for women-centric community service organizations, along with a restaurant, art gallery, and additional office space for technology and innovation tenants.

The Women’s Building is expected to create more than 300 new NYC jobs and generate an estimated $43 million in annual economic activity.

In a release announcing the project, Governor Cuomo said that “Today we are continuing our efforts to shatter the glass ceiling by taking down an institution of defeat and turning it into opportunity and social reform for women.”

The Bayview Correctional Facility building, which dates back to 1931, was originally designed as a YMCA for sailors. It was converted into a prison in the early 1970s, and evacuated just before Superstorm Sandy hit in October 2012. The storm damage caused by Sandy has led to the building being vacant since then.

NoVo Foundation plans to redevelop it into a space where organizations helping women and girls have the support and resources they need, including gallery space for public meetings, and organizational support services for women’s rights groups.

The NoVo Foundation is chaired by Peter and Jennifer Buffett, son and daughter-in-law of investor and philanthropist Warren Buffett.

Jennifer Buffett said in a release that “A physical home for the women’s rights movement, in a city that already serves as a global hub for advocates, activists, community leaders, service providers, and policymakers, could be a model for the world.”

Goren Group, a registered WBE woman-owned and operated real estate development and investment company, will be developing the property on behalf of NoVo Foundation. The developers will work closely with New York’s State Historic Preservation Office to preserve and restore historical elements of the building.

Lead New York economic development agency Empire State Development chose the NoVo Foundation and Goren Group plan for the Women’s Building through a competitive RFP process. ESD sought a plan that preserves the building’s historic facade while providing opportunities for community facility use, and stays within the general zoning character of the Special West Chelsea District.

Empire State Development President, CEO, and Commissioner Howard Zemsky added that “The Women’s Building will be a transformational resource for all non-profits working together toward the advancement of women, and the team has proposed a project that will preserve and rehabilitate a historic building while maximizing its economic impact and opportunities for community facility use.”

Microsoft Debuts NYC Flagship Store With $3M in Technology Grants

At 12 noon today, Microsoft Corp. will open the doors to its first Flagship Store in the heart of Manhattan at Fifth Avenue and 53rd Street.

Microsoft Flagship Store in NYC

Flagship Store in NYC (press photo – Microsoft Corp)

The five-floor, 22,369-square-foot store has been in the works for six years, and Microsoft is heralding the store’s launch with a series of launch events with fans, the local community and officials including NYC Deputy Mayor for Strategic Policy Richard Buery and NYC Chief Technology Officer Minerva Tantoco.

As part of the launch events for the opening of the Flagship Store, Microsoft has announced that it will award a total of $3 million in technology grants to 14 non-profits and NYC economic development and community organizations representing the five boroughs.

The grant recipients include the Women’s Housing Economic Development Corp. (WHEDco), Staten Island MakerSpace, We Connect the Dots, All Star Code, Network for Teaching Entrepreneurship, Directions for Our Youth, Per Scholas, and PowerMyLearning.

The National September 11 Memorial & Museum is one of the grant recipients, as are the New York Botanical Garden, New York Hall of Science, Brooklyn Academy of Music, Brooklyn Children’s Museum, and the Staten Island Children’s Museum.

Long Island-based nonprofit We Connect the Dots, for example, has been selected as Microsoft Flagship Store Community Partner and awarded an $115,000 technology grant because of the organization’s educational impact on communities in New York.

At a reception hosted by Microsoft earlier this month, student members of WCTD got hands on with some new Microsoft products and were granted a first look at the new store. WCTD CEO Laurie Carey said in a release that “The technology grant and the invite to the new location is an exciting opportunity for WCTD.”

With these grant awards, Microsoft hopes to extend its deep ties to New York and a commitment to providing opportunities to empower local youth and businesses through technology, training and experiences.

David Porter, corporate vice president, Worldwide Retail and Online Stores at Microsoft, said in a release that “Our store on Fifth Avenue – as well as every other one of our locations across the U.S., Puerto Rico and Canada – is here to showcase the best of Microsoft to the local community.”

Working with design firm Gensler, the company has ensured that the Microsoft Flagship Store embraces the existing heritage and character of the neighborhood in the heart of Manhattan through restoration. An exterior “culture wall” will display noncommercial, artistic images that will complement the architecture and facade of the building.

Another community benefit will be the Community Theater, where anyone can learn how to use Microsoft products for their everyday work and lives. The theater is offered free of cost for activities and events hosted by local community organizations. For example, the store can host sessions and workshops at which small businesses can take classes on how to be more productive.

The Microsoft Flagship Store in New York City is the company’s largest store to date. Microsoft opened its first store in Scottsdale, AZ in 2009. Since then, the number of Microsoft stores has grown to 110 retail locations across the U.S., Canada and Puerto Rico.

Detroit Breaks Ground on Transformative Orleans Landing Economic Development Project

Detroit Mayor Mike Duggan, joined by local business and community leaders, broke ground on the Orleans Landing project.

Orleans Landing

Orleans Landing (photo -hamilton-anderson.com)

This transformative $65 million Detroit economic development project will bring a new neighborhood and mixed-use community to the east riverfront with 278 apartments and 10,500 square feet of retail space.

The residential properties in the development will all be sustainably built to Enterprise Green Community criteria standards. Affordable housing rates will be offered on 20 percent of the available residential units.

The architect for the project was Hamilton Anderson Associates, Inc. working with Urban Design Associates as the master planner.

Mayor Mike Duggan said in a release that Orleans Landing will reactivate a major piece of Detroit’s riverfront and create a new, vibrant community there. “This investment is further proof that, increasingly, people are wanting to live in Detroit and be a part of its ongoing revitalization,” added Mayor Duggan.

Orleans Landing was made possible by a public-private partnership that includes the City of Detroit, the Economic Development Corporation of the City of Detroit, Invest Detroit, Community Capital Equity, LLC, Community Foundation for Southeastern Michigan, Gershman Mortgage, Goldman Sachs Social Impact Fund, L.P., The Kresge Foundation, Local Initiatives Support Corporation, and McCormack Baron Salazar, Inc.

The project also received state and federal support from the Michigan Strategic Fund, Michigan Department of Environmental Quality, U.S. Department of Housing and Urban Development, and through a Wayne County Brownfield Redevelopment Authority EPA Loan.

Michigan Economic Development Corporation Chief Executive Officer Steve Arwood said in the release that this is a transformational project that will create a sense of place and serve as a catalyst to attract additional private investment, jobs, and residents to the city of Detroit.

“Orleans Landing is an example of public-private partnership at its finest, and we’re excited to be a part of it,” added Arwood.

Invest Detroit President and CEO Dave Blaszkiewicz added that they’re proud to be a partner in helping the Orleans Landing development begin construction adding new housing and retail opportunities to nearly eight acres of riverfront property just footsteps from the heart of downtown.

Detroit RiverFront Conservancy President and CEO Mark Wallace noted that their goal from the very beginning was to not only create a beautiful destination for Detroiters and visitors along Detroit’s riverfront, but to also be a catalyst for economic development.

“Orleans Landing is a perfect example of how all of the pieces are coming together to build a more vibrant neighborhood on the east riverfront,” added Wallace.

Florida Considering Creation of Economic Development Enterprise Fund

Florida Governor Rick Scott has unveiled a legislative proposal that includes four major reforms to replace the Quick Action Closing Fund with a $250 million Florida Enterprise Fund.

Florida Enterprise Fund proposal

Photo – enterpriseflorida.com

Gov. Scott’s proposal asks the State Legislature to replace the nearly empty QAC Fund with an Enterprise Fund that will allow Florida to compete with other states and internationally for major job creation projects.

The Florida Enterprise Fund will be a new trust fund where incentive fund dollars will be able to grow untouched in the state treasury until companies under job creation contracts meet their job requirements. Currently, annual QAC fund allocations sit in a non-state escrow account earning little interest. Unused funds revert back to the state at the end of a fiscal year.

Apart from the interest the Enterprise Fund will earn, the new arrangement also provides certainty, allowing companies to factor in the availability of incentives in their decision-making timeline over multiple years.

The Governor apparently heard from several site selectors representing large companies looking to relocate their offices across the country or the world. The site selectors said they look at a state’s cash on hand before considering a state for a possible relocation or expansion project, and that they would not recommend a state where there was uncertainty about a company’s funding each year.

Any project seeking more than $1 million in Florida economic development incentives from the Enterprise Fund will need to get the approval of the Governor, and from the Florida Senate President and the House Speaker.

At the same time, the Enterprise Fund would not need to schedule special committee meetings for approving incentives for large projects. Projects receiving $1 million or less in Closing Fund incentives could be approved directly by the Governor without consulting the Legislature.

Another requirement for a 5-to-1 return on investment for Quick Action Closing Fund projects will be changed to the state getting its incentive money back within ten years, plus a ten percent annualized rate of return.

In remarks made at the Enterprise Florida Inc. Board meeting where this proposal was unveiled, Gov. Scott said that “EFI’s toolkit was significantly underfunded this year and we will run out of funding for new job commitments before the end of the fiscal year… If we fail to reform this year, businesses and jobs will not move to Florida.”

The Governor’s remarks focused on Texas as Florida’s main competitor, and sought to create a tool comparable to the Texas Enterprise Fund.

“Texas is our number one competitor for job wins, and to acknowledge that, I want to call our new competitive fund the Florida Enterprise Fund,” said Gov. Scott. “With the creation of a new Florida Enterprise Fund to compete with the Texas Enterprise Fund, we can start talking about economic development in different terms.”

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