Financial Restructuring Board Proposed for Distressed NY Local Governments

New York Governor Andrew M. Cuomo outlined a proposal for creating a Financial Restructuring Board to assist distressed local governments in managing their finances.

Gov. Cuomo proposes Financial Restructuring Board

Gov. Cuomo proposes Financial Restructuring Board (photo – NY Governor’s Office)

In his presentation, the Governor said that more money was not the solution.

He said the state’s AIM (Aid and Incentives for Municipalities) program neither reflects performance nor the needs of local governments, even though it accounts for a huge share of the big city budgets (excluding NYC).

For example, Buffalo’s $161.285 million in AIM funds makes up 33.21 percent of their $485.621 million FY 2013 budget. The percentages for Yonkers (24.46), Syracuse (24.07) and Rochester (18.06) are similarly high.

Gov. Cuomo said that it was time to stop talking about it, and start doing something. He added that Albany was different from Syracuse, which was different from Buffalo and Jamestown and so on.

The Governor said there was no one size fits all solution, and they needed to bring each one in and work with them to come up with an individual restructuring plan for each locality.

Jamestown Mayor Samuel Teresi noted that this was the first attempt ever at understanding the structural economic problems that cities and local governments in the Upstate region have faced for generations.

The plan involves the creation of a Financial Restructuring Board comprised of one restructuring professional from the private sector, accompanied by state officials including the Sec. of State, Budget Director, AG and Comptroller.

Their first task would be to come up with the standards for defining fiscally distressed local governments in New York. The eligible candidates could then request assistance from the board and work together to develop a restructuring plan.

The board would have $80 million to work with, allocated in the FY 2013-14 Budget for reorganization plans. If a local government accepts funding, the recommendations made by the board would be binding on the recipient.

Apart from drawing up detailed financial plans for several years, other measures the board is expected to push for include use of shared services, functional consolidation and mergers, and reduction in the number of public officials.

FedEx Ground Breaks Ground on Distribution Center in Sauget, IL

Illinois Gov. Pat Quinn was on hand for the groundbreaking of the new FedEx Ground distribution center in Sauget, IL.

FedEx Ground groundbreaking in Sauget, IL

FedEx Ground groundbreaking in Sauget, IL (photo – FedEx/Zach Bowman)

Construction of the 181,000-square-foot distribution center in Sauget Industrial Parkway will require FedEx to invest $23.5 million, and will create 25 full time and 150 part-time jobs.

Scott Burns, regional vice president of Fedex Ground, said they were thrilled to be a part of the Sauget community, and added that the site was selected primarily because of its location, which provides easy access to major highways and is close to the distribution centers of their customers.

That, and the fact that the Illinois Department of Commerce and Economic Opportunity (DCEO) has offered FedEx performance-based tax credits worth $459,000. The company will get these tax credits over a 10-year period, and only if it meets committed job creation and investment targets.

The company will also be getting workforce training grants to help the company hire trained employees that will boost its workforce quality. Once fully operational, the facility will be capable of processing 10,000 packages per hour. FedEx plans to have the distribution facility operational by Aug 2014.

Gov. Quinn said that companies like FedEx were growing in the state, and their expansion would help the Illinois economy recover from the worst recession the state had faced since the Great Depression.

FedEx Ground already has 16 facilities in Illinois, and the new center is part of the company’s strategic expansion plan for its nationwide network. FedEx Ground has added 11 major hubs across the country since 2005, along with expansions or relocations of 500 facilities.

The 175 new jobs being created in Sauget will add to approximately 50,000 existing FedEx Ground employees and 9,000 independent businesses which together pick up and drop off a total of more than 5.6 million packages every day in the U.S. and Canada.

Last year, the Moon Township, Pennsylvania-based FedEx Ground generated $9.5 billion in revenues. FedEx Ground is a subsidiary of the Memphis, Tennessee-based FedEx Corporation (NYSE: FDX).

UC Berkeley Report – California Green Jobs and Workforce Impact of Proposition 39

The Donald Vial Center on Employment in the Green Economy at the University of California, Berkeley has released a report which provides a detailed analysis of the jobs and workforce impact of Proposition 39, which California voters approved in Nov 2012.

UC Berkeley report on Proposition 39 green jobs

Proposition 39 green jobs report (photo – berkeley.edu)

Proposition 39, aka the California Clean Energy Jobs Act, allows the state to impose income tax on multistate corporations based on a percentage of their sales in California.

It increases the state’s revenue by a billion dollars annually, and half of the new revenue collected over the next five years will be allocated for energy efficiency projects in California’s public schools, community colleges and universities.

The stated aim for the use of funds is that it should create good-paying clean energy and energy efficiency green jobs in the state. As such, some of the funds will be used for workforce training and helping youth and veterans gain employment doing these jobs.

Based on the assumption that $550 million will be provided by California in grants for energy efficiency retrofits, it will result in the creation of 3,410 direct person-year jobs and 7,843 total person-year jobs annually.

A person-year job is a full-time job for one year. Out of the total number of direct jobs, around 2,273 will be skilled construction jobs.

If a revolving loan fund is created to pool $50 million of the Proposition 39 funding each year for the next five years, it could be leveraged into a total of $700 million in investments, leading to the creation of 4,340 direct jobs. If a $100 million revolving loan fund is set up, it would result in an investment of $850 million and would create 5,270 direct jobs.

The idea for creating a revolving loan fund using a part of Proposition 39 funds was explored in a study released last month by the UCLA Luskin Center for Innovation and commissioned by the Los Angeles Business Council Institute (LABC).

LABC President Mary Leslie said that Proposition 39 had opened up an opportunity to fulfill two of the state’s priorities at the same time – increasing commitment to environmental sustainability while adding thousands of green jobs.

Leslie added that the revolving loan fund would support innovative projects in public-private partnerships and maximize the benefits of Proposition 39 funds for the environment and the economy, and for California workers.

Read the full UCLA and the UC Berkeley reports on Proposition 39.

Natron Wood Products to Create 200 Jobs in Louisville, MS

Jasper, Oregon-based Natron Wood Products announced plans to open a new facility for manufacturing specialty plywood products in Louisville, Mississippi.

Natron Wood Products announcement

Natron Wood Products announcement (photo – Louisville Mayor’s Office)

The project will require Natron to invest $10 million and will lead to the creation of more than 200 new jobs.

Natron’s new operations will be housed in the 265,000-square-foot former Georgia Pacific plywood manufacturing facility, which is in a publicly owned building.

Natron’s 200 jobs are more than thrice the 60 jobs that were lost when the Atlanta, GA-based Georgia-Pacific LLC shut down its operations in Louisville in 2009.

The plywood panels Natron will make in their new Louisville facility are primarily used in the construction sector, although they will also be making sanded and marine plywood products.

Mississippi Gov. Phil Bryant, Louisville Mayor Will Hill and other state and local officials were on hand for the announcement, along with Richard McDougal, owner of Natron Wood Products.

McDougal said they were excited to be in a business-friendly state such as Mississippi, and that they are enjoying building relationships with Mayor Hill and others in Louisville. McDougal added that they were looking forward to expanding their operations in Louisville, and were committed towards being a positive partner in the community for years to come.

Gov. Bryant said he appreciated Natron for selecting Louisville for its new facility and creating so many jobs for workers in the area.

The Mississippi Development Authority (MDA) is providing assistance to Natron using Community Development Block Grant (CDBG) funds. The company is also getting assistance for building renovations from the Appalachian Regional Commission.

Brent Christensen, executive director of the MDA, said that they were grateful to Natron for revitalizing the Georgia Pacific facility. He also thanked Winston County and the City of Louisville for their support in helping the MDA secure the project.

Natron has been doing business in Oregon for more than two decades under the name of Jasper Wood Products.

Energy Dept Launches H2USA Public-Private Partnership

The U.S. Department of Energy announced the launch of a new public-private partnership called H2USA aimed at advancing the infrastructure required for fuel cell electric vehicles (FCEVs).

Hydrogen refueling station

Hydrogen refueling station (photo – ornl.gov)

The H2USA partnership includes automakers, government agencies, utilities that supply gas, and private industry members involved in the hydrogen and fuel cell sectors.

In addition to the Association of Global Automakers, current members named as part of the partnership include Hyundai Motor America, Mercedes-Benz USA, Nissan North America R&D, and Toyota Motor North America.

Other members who are part of the partnership include the California Fuel Cell Partnership, Massachusetts Hydrogen Coalition, American Gas Association, Electric Drive Transportation Association, Proton OnSite, and the Fuel Cell and Hydrogen Energy Association (FCHEA).

Morry Markowitz, president and executive director of FCHEA said that the fact that so many entities have come together for this partnership is a positive sign.

The Energy Dept says that shale gas developments are helping reduce the cost of hydrogen production and use of fuel cells. H2USA will bring together experts to find solutions for infrastructure challenges including leveraging cheap natural gas.

Assistant Secretary for Energy Efficiency and Renewable Energy David Danielson said that the H2USA partnership will help in advancing affordable fuel cell vehicles that save money and give driver’s more choices.

A couple of months back, the Energy Dept’s Fuel Cell Technologies Office issued an RFI (request for information) in which it sought feedback from stakeholders on which fuel cells and hydrogen technologies were ready for technology validation.

Among the areas of interest mentioned in the RFI are ideas that could be applicable for an incubator program. The purpose of the RFI was to collect information in advance of a DOE Funding Opportunity Announcement (FOA) for technologies that could be supported to stimulate commercialization of fuel cell and hydrogen technologies.

The H2USA partnership may be helpful in this regard, since one of their tasks will be to evaluate alternative fueling infrastructure that can provide economies of scale and cost reductions.

R&D programs undertaken by the Energy Department’s national laboratories have helped private industry reduce fuel cell costs by 35 percent since 2008. The costs relative to 2002 are now 80 percent lower, and so is the amount of platinum required in fuel cells.

Nevada Gov. Seeks $5M for UAS Test Site Application

Nevada Governor Brian Sandoval announced that he is proposing a budget amendment to appropriate $5 million in support of the state’s application to the FAA to be chosen as one of the six unmanned aircraft systems (UAS) test sites where drones will be tested for integration into the National Airspace System (NAS).

Predator drone at Air Force base in Nevada

Predator drone at Air Force base in Nevada (photo – defense.gov)

The final date for submitting complete proposals to the FAA was May 6, 2013. Before that, 50 applicants from 37 states had filed initial responses expressing an interest in being chosen as one of the pilot sites.

One of these applications was submitted by a 28-member consortium from Nevada, led by the Nevada Economic Development Office as the applicant.

Included in this team are public, private and academic entities such as Navigator Development Group, Drone America, Bowhead Systems, the Nevada National Guard and the Nevada System of Higher Education.

The team is being led by Steve Hill, head of the Economic Development Office, and by Bill Burks, adjutant-general of the Nevada National Guard.

The $5 million the Governor is asking for would come partially from the state’s Catalyst Fund and the remaining from higher revenues expected over the next couple of years, as per forecasts by the Economic Forum . The money would be used to collect more data supporting Nevada’s application and convince the FAA of Nevada’s readiness to handle the project.

The project is estimated to have the potential to create 15,000 new jobs in the state. The Governor’s statement said that thousands of direct UAS employees would earn average annual wages of $62,000.

Being selected as a UAS test site by the FAA would mean an economic impact of $2.5 billion for Nevada, with estimated additional annual local and state tax revenues of $125 million.

Nevada has certain built-in advantages over other applicants, including the fact that the military already tests its drones in the state and this has created a well-trained talent pool of veterans who know how to operate drones and fulfill other job functions for UAS manufacturers and research companies.

Not to mention that Nevada contains the largest expanse of restricted airspace in the continental United States. The state’s proposal includes a plan for drone testing in contiguous restricted and commercial airspace, which makes it ideal as a pilot site for testing UAS-NAS integration.

The state is offering four sites where commercial drones can be located, including the Fallon Naval Air Station, Boulder City, Desert Rock and Stead.

Gov. Sandoval said that with the airspace and climate in Southern Nevada, the state was uniquely equipped to assist with the development of UAVs. He added that the economic benefits of being chosen as a test site were exponential, and that he believes the state would see a great return on this $5 million investment.

Washington Launches Aerospace Industry Strategy To Secure Boeing 777X Project

Washington Gov. Jay Inslee announced the launch of a statewide effort to make sure the Boeing 777X is built in Washington, a project which the Governor said would preserve and grow thousands of aerospace jobs in the state for the next generation.

Boeing's Everett delivery center

Boeing’s Everett delivery center (photo – boeing.com)

Making the announcement at the Future of Flight Aviation Center, Gov. Inslee also unveiled an “Aerospace Industry Strategy” to grow the state’s aerospace cluster and improve the business climate for aerospace companies.

The plan calls for certain actions to be taken over the next few months to demonstrate why Washington is the best choice for the 777X.

This includes a survey of industry leaders to find out what the state can do to improve its competitiveness, and an economic impact analysis to demonstrate the benefits that incentives provided to win the project would create.

Changes will be made to improve the state’s business climate, including a review of existing aerospace incentives.  In 2003, the state approved $3 billion in tax breaks for Boeing (NYSE:BA) over two decades to secure the first 787 assembly line. That 20-year period expires in 2024, but 777X production would continue well beyond that. The state may therefore approve an extension of these incentives as part of a new and broader incentives package.

A special emphasis is being placed on securing the new assembly plant that will be required for the 777X’s carbon fiber wings, which have a massive wingspan of 233 feet – bigger than any plane Boeing currently has in production or plans to build. The proposed design also calls for the wingtips to fold in order to reduce space required at airports.

The location of this hi-tech carbon fiber wing assembly plant would have to be close to the main 777X assembly plant. This means that any site which looks most suited to design and assemble the wing assembly will get the entire plane too.

One of Washington’s main competitors for this project would be South Carolina, which successfully wrested Boeing’s second 787 assembly line from Washington. South Carolina last month approved $120 million in incentives for a $1 billion expansion at Boeing’s North Charleston facility that would create 2,000 new jobs, of which more than 1,000 are engineering and production jobs.

Apart from growing the aerospace cluster and making regulatory changes to make it easier for aerospace companies to do business, Washington’s newly unveiled Aerospace Industry Strategy also focuses on infrastructure improvements and workforce training.

Bob Drewel, president of the Washington Aerospace Partnership which will be working with the state to implement all this, said that the 777X was hugely important to the aerospace industry in Washington.

Drewel said it would preserve the thousands of jobs of people currently working on assembly of the 777 in Everett and with suppliers spread all over the state, and ensure that machinists and engineers in Washington will be working on cutting-edge aviation technology for many decades to come.

Read Washington’s full Aerospace Industry Strategy – Download (pdf)

Canada to Build Industrial CO2 Emissions Recycling Facility

The National Research Council of Canada (NRC) announced that it is making an investment into a project to build a facility in Alberta that will be capable of recycling industrial CO2 emissions into valuable biofuels.

Rendering of algal biorefinery

Rendering of algal biorefinery (photo – nrc-cnrc.gc.ca)

The $19 million Algal Carbon Conversion (ACC) Project will be a pilot program which NRC will be undertaking in partnership with Pond Biofuels and Canadian Natural Resources Limited.

The Honorable Gary T. Goodyear, Minister of State for Science and Technology, said that the Canadian government is pleased to partner with the private sector for this initiative that combines sustainability and profitability, and will ultimately be beneficial for both the environment and the economy.

The pilot project’s main aim is to test whether this concept of converting industrial CO2 emissions into biofuels is feasible and viable. If so, it can then be used as a model for setting up Co2 recycling plants all over Canada.

The technology seeks to imitate nature by incorporating the CO2 into algal biomass through photosynthesis, following which the algal biomass can be converted into oil, animal feed and soil amendment products, among other things.

Another advantage of this process is that it will put industrial byproducts such as wastewater and heat to good use for cultivating algae in photobioreactors. The use of enclosed photobioreactors also ensures that arable land does not have to set aside for algae farms.

It’s fitting that this pilot algal biorefinery will divert CO2 emissions from the Canadian oil sands, and make the environment cleaner while producing more oil. The pilot project will be located at Canadian Natural’s Primrose South oil sands site, which is near Bonnyville, Alberta.

Steve Laut, President of Canadian Natural, said they were pleased to partner with the NRC and Pond Biofuels in this project that will reduce their carbon footprint.

Apart from Canadian Natural, the ACC program has roped in many participants including companies classified as large final emitters (LFEs). The initiative is estimated to ultimately lead to the setup of enough algal biorefineries to divert and convert 20 percent of the CO2 emissions of all Canadian LFEs by 2060.

Steven Martin, CEO of Pond Biofuels, said they were very excited about the partnership with NRC and Canadian Natural, and noted that it would establish Canada’s status as a leader in the carbon capture and recycling field.

NRC is the Government of Canada’s foremost R&D agency, and provides private industry with access to strategic R&D, technical assistance and specialized scientific infrastructure.

South Carolina Approves Film Rebate Bill

The Beaufort Chamber, Carolina Film Alliance (CFA) and other interested stakeholders in South Carolina’s film and television industry breathed a collective sigh of relief after SC Gov. Nikki Haley signed the Film Rebate Bill (S.163).

CBS legal drama Reckless

Reckless (photo – CBS Reckless Extras)

The bill’s future had been in doubt more than once, as it stalled in the state senate and the Governor had indicated ambivalence towards signing it into law even if the legislature approved it.

What finally tipped the scales in favor of its fast-track passage through the legislature and quick signing by the Governor was “Reckless” – a CBS television show about lawyers that is in the works.

The pilot for the legal drama was filmed at Studio Charleston in Charleston, SC, but the producers said they might shift the filming of future episodes to Savannah, Georgia, and were planning to decide on the location by mid-May.

The show needs a historical southern background which can easily be found in both Charleston and Savannah. Filming of the show will generate spending worth $60-$70 million per year.

The bill, sponsored by Rep. Phyllis Henderson in the House and State Senator Paul Campbell in the SC Senate, hikes rebates on supplies purchased from vendors in South Carolina to 30 percent, which is double the earlier 15 percent.

Payroll tax refunds offered to the film companies have similarly been hiked up to 25 percent for South Carolina works, and 20 percent for out of state workers. These incentives are available only to production companies that spend at least a million dollars in the state.

CFA President Richard Futch said that the passage of the bill sends a message to film makers around the world that South Carolina values the millions spent by film companies on local businesses, the jobs they create and their showcasing of the state’s geographic beauty on the big screen for the whole world to see.

He added that the world has already seen the beauty of South Carolina in films such as Forrest Gump and the Patriot, and South Carolinians should now gear up to be excited by more such iconic movies with a Palmetto backdrop.

US Launches $200M Competition for Three Innovative Manufacturing Institutes

The United States government announced the launch of competitions to select locations for three manufacturing innovation institutes that will be created with $200 million in federal funding.

Clean Energy Manufacturing Innovation Institute

Clean Energy Manufacturing Innovation Institute (photo – energy.gov)

The federal government’s plan to create these three institutes comes after the National Additive Manufacturing Innovation Institute (NAMII) was opened in Youngstown, Ohio as a pilot project.

The FY2014 federal budget includes a billion dollars to create a network of 15 such institutes called the National Network for Manufacturing Innovation (NNMI).

The three institutes for which proposals are being solicited are being funded with $200 million from the budgets of five agencies, including the Departments of Energy, Defense and Commerce, and from the National Science Foundation (NSF) and NASA.

The three new institutes are:-

Digital Manufacturing and Design Innovation (DMDI);

Lightweight and Modern Metals Manufacturing (LM3I); and

Next Generation Power Electronics Manufacturing (CEMI – Clean Energy Manufacturing Innovation).

The first two will be lead by DoD, while the power electronics institute will be lead by the Energy Department.

DoD will put up $50 million each for DMDI and LM3I, with the other aforementioned agencies chipping in for a total of $70 million in funding for each institute.

This funding requires a minimum of 1:1 matching funds committed by the consortiums applying to be selected to host an institute, so each institute will kick off with an initial public-private funding commitment of at least $140 million in total.

These institutes have the power to radically transform the manufacturing sector and raise the global competitiveness of small and medium-sized businesses in the U.S.

For example, implementing the DMD environment would create savings to the tune of $30 billion over 15 years for the commercial aviation sector alone. This “digital thread” concept can similarly be implemented across all manufacturing industries, and is expected to decrease costs for the entire sector by 10 percent.

Similarly, LM3I will be helping to develop a supplier-base that can provide lightweight metals at scale. The demand for these metals is being driven partially because the automotive industry needs these metals to produce vehicles conforming to the required fuel efficiency standards of 35.5 mpg by 2016, and CAFE standards of 54.5 mpg by 2025. Raising the standard to 35.5 mpg is expected to save a total of 1.8 billion barrels of oil over the lifetime of all the vehicles covered.

The DOE’s CEMI will be pursuing the economic and technological transformational promise of wide bandgap (WBG) semiconductor materials, which are smaller and faster, and provide higher energy efficiency in power electronics and clean energy technologies. WBG is expected to get an $84 billion share of the global lighting market by 2020, and that’s just one application area.

Read more about the aims of DoD’s DMDI and LM3I institutes, and an overview of WBG from the DOE.

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