Citi and Veterans Institute Team Up to Launch Seed Funding Competition

Citigroup Inc (NYSE: C) announced that they have teamed up with the Institute for Veterans and Military Families (IVMF) to launch a seed funding competition for veterans to launch or grow their business.

Citi-IVMF business competition

Citi-IVMF business competition (photo – citigroup.com)

IVMF was launched as a nationally focused institute in June 2011 by New York’s Syracuse University to leverage educational resources in support of veterans and their families.

The Citi-IVMF collaboration, called the “Citi Salutes: Realizing Your Dream Business Competition,” requires participants to submit their business plan by Nov 8, 2013 in order to be eligible for a grant of up to $25,000 to implement this idea.

The competition will be awarding a dozen grants worth a total of $130,000, funded by the Citi Foundation.

Mike Haynie, executive director and founder of IVMF, said that access to capital was the biggest obstacle entrepreneurs face, and their partnership with Citi would help many veterans overcome this challenge.

Business plans must be submitted by graduates of the V-WISE or Boots to Business entrepreneurship training programs. Applicants are additionally required to have at least a 51 percent stake in a small business.

Both V-WISE (Veterans as Women Igniting the Spirit of Entrepreneurship) and Boots to Business are IVMF initiatives launched as a partnership between IVMF and the U.S. Small Business Administration.

V-WISE offers a 15-day online course for the basics of entrepreneurship, followed by a three-day conference where students get in-person training from expert entrepreneurship educators.

Since the program is funded by the SBA and managed by Syracuse University’s Whitman School of Management, costs to participants are minimal and limited to a $75 registration fee and travel expenses to the conference (hotel stay and meals are free).

Boots to Business offers a three-phase training program that helps transitioning military members and their spouses to become small business owners.

Ten finalists from each program will get to present their business plans to a judging panel at the V-Wise conference in Jan 2014, and a grand prize of $25,000 will be awarded to the best plan.

The second and third award winners get smaller amounts. There will also be special awards in three categories including an “Impacting Veterans Prize” and prizes for the best social and technology venture plans.

Jerome Byers, Head of Citi Small Business, officially launched the program at the V-Wise conference which took place May 3-5, 2013 in Chicago, Illinois. Byers said they are pleased to support a program encouraging entrepreneurship as a pathway for post-service success for veterans.

Find out more about IVMF programs and the Realizing Your Dream competition at vets.syr.edu.      

Boston Fed Launches Working Cities Challenge to Help Smaller MA Cities

Federal Reserve Bank of Boston President Eric Rosengren was joined by representatives from more than 20 communities in Massachusetts for the launch of the Working Cities Challenge, along with leaders from other agencies and organizations involved in the effort.

Working Cities Challenge

Working Cities Challenge (photo – bostonfed.org)

The program, titled “Working Cities Challenge: An Initiative for Massachusetts Smaller Cities,” aims to improve public-private cooperation and collaboration in smaller cities, and will support economic development projects to help improve the lives of low-income families.

The winning cities will get more than a million dollars in grant funding, although all of the participating cities will get a lot of help in many different ways.

All participants will benefit from peer-city advice, technical assistance and access to new sources for flexible debt and grant programs. They will have access to a large network of leaders from the public and private sectors, along with those working in the non-profit and philanthropy areas.

Communities whose manufacturing plants have moved away or shut down will be pushed to look at other sectors and come up with a “transformative project” to bring deep and everlasting change. Massachusetts is the first state to adopt this model at a regional level.

The Boston Fed developed the Working Cities Challenge as a regional model of Living Cities’ The Integration Initiative (TII). Living Cities is a New York-based collaboration of 22 of the world’s largest financial institutions and foundations.

Ben Hecht, president and CEO of Living Cities, said their primary aim with TII was to improve the lives of low-income families at scale. He said boosting prosperity at the population level needs systemic solutions, rather than programmatic ones.

Living Cities is chipping in with $600,000 committed by its members, half of which comes from Bank of America alone. Other entities working in partnership with the Boston Fed for this initiative include the Commonwealth of Massachusetts and the Mass Competitive Partnership.

Working Cities will provide between six to eight awards. There will be three to five seed awards ranging from $50,000 to $80,000. There will be three main multi-year implementation awards. One will be in between $150,000 to $300,000, the second one between $300,000 to $500,000, and the third one between $500,000 to $700,000. Winners will be chosen by a panel of experts.

This initiative was launched as a result of research conducted on small cities by the Boston Fed, which found that eight out of 26 cities in a peer group had managed to recover their economic stability with the help of collaborative leadership, infrastructure investments and the assistance of anchor institutions.

The Boston Fed found that their study findings closely matched Living Cities’ TII, which has been tested on the inner-city populations of five larger cities.

They are now hoping the Working Cities Challenge will offer insights into what might work that can then be scaled up for larger cities, and the initiative may even be expanded outside Massachusetts to include other regions in New England.

Illinois Highlights Successful Year for 1871 Digital Startup Hub

Chicago Mayor Rahm Emanuel and Illinois Governor Pat Quinn made a joint announcement about the results of a survey undertaken to find out what the 1871 digital startup hub has been doing since it was launched a year ago.

1871 - Digital Startup Hub in Chicago

1871 – Digital Startup Hub in Chicago (photo – 1871.com)

The survey of founders of 1871’s member startups shows that they have together created 800 new jobs, and are forecasted to create another 1,342 jobs in the next year.

Together, they have attracted $30 million from investors, and added nearly $13 million in additional revenues into the Chicago economy.

Governor Quinn said that 1871 was fostering innovation and fresh ideas, and the creative forces at work in the 1871 community were benefiting the state.

Mayor Emanuel said that Chicago was just as good as any other U.S. city in terms of providing the momentum required for developing startup ecosystems.

The 1871 community currently consists of 225 startups working alongside each other. This number does not include alumni that have outgrown the shared space and moved out to set up their own separate facilities and offices.

Everpurse Founder Liz Salcedo, whose fashion-tech company is a recent 1871 alum, said the startup hub was their launch pad and offered the density of talent, connections and ideas that put the company on its path to success.

Another striking example of 1871’s success is the digital startup hub’s¬†own former chief executive¬†Kevin Willer, who recently quit his position to take over a venture capital fund named the¬†i2A Fund. The kicker is that the i2A Fund¬†just happens to be located inside 1871.

The non-profit Chicagoland Entrepreneurial Center (CEC) operates 1871, which was launched with the help of $2.3 million in public funding provided last year by Illinois.  CEC’s mission is to promote and grow Chicago’s startup community, with 1871 as its flagship project.

Jim O’Connor, co-chairman of the board of directors of CEC, said that it had been an incredible first year with 1871 exceeding their expectations.

The startup hub was named 1871 as a twist on the Great Chicago Fire of 1871. They say the real story was not the fire, but about the way inventors, engineers and architects came together to rebuild a completely new city afterwards. The innovations they came up with 140 years ago shaped not only Chicago but also the modern world.

The 1871 community of today similarly invites digital designers, entrepreneurs and engineers to share ideas, build their businesses and change the world.

East Penn Manufacturing Expansion Will Create 400 Jobs in PA

Lyon Station, Pennsylvania-based battery maker East Penn Manufacturing Co., Inc. is planning for a major expansion of its operations in Berks County.

East Penn Manufacturing complex in Lyon Station, PA

East Penn Manufacturing complex in Lyon Station, PA (photo – dekabatteries.com)

As part of the expansion, East Penn will be building a new 458,000-square-foot battery manufacturing plant to support growth.

East Penn Manufacturing operates one of the world’s largest single-site lead-acid battery manufacturing facilities, which already has more than two million square feet of roofed space in the 520-acre complex in Lyon Station (also known as Lyons), a borough in Berks County.

The new building’s construction alone is expected to cost more than $50 million, and the expansion will create 400 new jobs, in addition to the 6,000 employees the company already has in Pennsylvania.

East Penn will also be making additional investments for equipment purchase and workforce training.

Dan Langdon, president of East Penn, specifically mentioned the cooperation they had received from the commonwealth, and the positive impact the expansion would have on the community and the company’s suppliers.

East Penn has been offered a very attractive package of incentives for the expansion project, which was secured by the Greater Berks Development Fund (GBDF) in partnership with the Governor’s Action Team (GAT).

On behalf of East Penn, GBDF is getting a $6 million loan from Pennsylvania Industrial Development Authority (PIDA), to be repaid with a low 1.5 percent interest rate over a 15-year period. The company is also getting a $5 million loan from Machinery and Equipment Loan Fund (MELF), to be repaid over 10 years at 1.5 percent.

The Pennsylvania Department of Community and Economic Development (DCED) has approved East Penn for a $500,000 grant under the Pennsylvania First Program, along with job creation tax credits worth $800,000 and another $180,000 for workforce training.

Edward J. Swoyer Jr., president of GBDF, said that he could not think of a better investment than this East Penn expansion project that has similarly aligned the county and state’s goals on their economic development programs.

PA Gov. Tom Corbett said his administration was committed to enacting policies that encouraged employers such as East Penn Manufacturing to grow and create more jobs in Pennsylvania.

Site Selection’s U.S. Best to Invest Winners

The latest issue of Site Selection magazine includes their listing of the “Best to Invest” winners for 2012. This is their annual list of the top-performing economic development organizations across the nation.

Greater Houston

Greater Houston (photo – houston.org)

The evaluations were based on four main criteria – jobs, jobs per capita, capital investment, and investment per capita.

They also looked at other aspects such as creativity in the organization’s economic development strategy, and their ability to generate breakthrough deals.

This year’s list includes the following organizations:-

Austin Chamber of Commerce, Austin, Texas;

Baton Rouge Area Chamber, Baton Rouge, Louisiana;

Economic Futures Group, Spartanburg Area Chamber of Commerce, and the Upstate Alliance, Greenville-Spartanburg, South Carolina;

Greater Houston Partnership, Houston, Texas;

Metro Atlanta Chamber of Commerce, Atlanta, Georgia;

Mobile Chamber of Commerce, Mobile, Alabama;

Pittsburgh Regional Alliance, Pittsburgh, Pennsylvania;

Salt Lake County Economic Development, Salt Lake City, Utah;

The Siouxland Initiative, Sioux City, Iowa;

Southwest Louisiana Economic Development Alliance, Lake Charles, Louisiana; and

Wayne County Economic Development Growth Engine, Detroit, Michigan.

Greater Houston leads the pack in terms of sheer numbers, having raked in $14.2 billion in capital investments and 17,500 jobs in 2012. The magazine notes it’s not just because of the energy boom, because the Greater Houston Partnership secured big projects in diverse fields including chemicals manufacturing, aerospace and the medical industry.

In their previous issue, Site Selection magazine had named the Houston MSA as the top metro for relocations and expansion, having racked up 325 projects in 2012.

Economic development projects in Austin accounted for $1.8 billion in capital investment and 7,512 jobs.

The Mobile Chamber of Commerce was named largely based on the $600 million Airbus assembly plant announcement. The significance of this one deal can be judged from the fact that the chamber had been working on it for eight years, and because it makes up such as huge part of the $731 million in capital investment scored by Mobile, Alabama in 2012.

Site Selection has also named the EADS Airbus deal with Mobile as one of its top 10 U.S. deals for 2012.

Engineered Floors to Create 2000 Jobs With $450M Investment in Georgia

Calhoun, Georgia-based carpetmaker Engineered Floors, LLC announced that it plans to invest $450 million in northwest Georgia over the next five years.

Engineered Floors, LLC

Engineered Floors, LLC (photo – engineeredfloorsllc.com)

The investment will be used by the company to build new manufacturing facilities and distribution centers in Murray and Whitfield Counties, and is expected to create 2,000 new jobs.

Engineered Floors already employs 1,400 people in the area. Georgia Governor Nathan Deal said that this was a story of a locally grown company’s continued commitment and investment to its home in northwest Georgia.

Apart from its headquarters, the company already has two manufacturing plants, a tufting facility and one distribution center in the region. They are now planning to build two new manufacturing plants in the aforementioned counties, and will be siting a distribution center in Whitfield County.

The Georgia Department of Economic Development (GDEcD) worked with the Dalton-Whitfield Chamber of Commerce and the Dalton-Whitfield County Joint Development Authority to secure the expansion project and make sure it stayed in the region.

Robert E. Shaw, chairman and CEO of Engineered Floors, LLC, specifically mentioned the sales tax exemption on manufacturing power consumption that the state approved last year as one of the reasons they were able to make the decision to expand.

The company will be getting sales tax exemptions on energy use and construction materials. As a qualified mega-project, the expansion makes the company eligible for tax credits totaling $69.7 million for the new mills. They will be getting workforce training assistance from Georgia Quick Start.

Dalton and its surrounding area are known as the “carpet capital of the world.” As per the GDEcD, the state supplies 90 percent of all carpets made in the U.S., and accounts for 54 percent of the U.S. export market for carpets. The carpet and rug mill manufacturing jobs in Georgia account for 71.5 percent of the nationwide total.

Chris Cummiskey, commissioner of GDEcD, said that Georgia had a long history of existing companies going in for expansions, and they were pleased to see Engineered Floors has also chosen to continue their growth in Georgia.

Newoak Capital to Establish Subsidiary in Danbury, CT With 100 Jobs

New York City-based financial services firm Newoak Capital announced that they are establishing a subsidiary in Danbury, Connecticut.

Matrix Corporate Center in Danbury, CT

Matrix Corporate Center in Danbury, CT(photo – matrixcorpcenter.com)

The subsidiary, NewOak Credit Services, LLC, will be spending $16 million for the project, which is expected to create 50 jobs in the next one year and up to a total of 100 new jobs over a period of three years.

The company’s Danbury operations will be housed in 10,000 square feet of leased space in the Matrix Corporate Center.

The company will be investing $13 million of its own money, with the remaining $3 million coming from the Connecticut Department of Economic and Community Development (DECD).

This $3 million is being given by DECD as a 10-year loan with a 2 percent interest rate, to be used for leasehold improvements, furnishings, equipment and as working capital. It is a forgivable loan contingent on the company fulfilling its job creation commitments.

Danbury and Connecticut successfully competed for this project against other sites in Arizona, Florida and North Carolina.

James Frischling, president and co-founder of NewOak, said the state government’s commitment to attracting new businesses combined with a strong pool finance and mortgage professionals made Connecticut the ideal choice for the launch of their credit services platform.

Employees working and living in Danbury would not be subjected to the long commutes required to get to and from Manhattan, while still being close enough to catch a train into the City whenever needed.  Not to mention the advantages of cheaper electricity and lower real estate taxes for the company in the Matrix Corporate Center.

DECD Commissioner Catherine Smith said they had put a lot of emphasis on the insurance and financial services sectors in their economic development strategy, because it was an important economic driver in Connecticut.

Smith added that their success in attracting companies such as Newoak would strengthen the state’s global reputation in the financial services industry.

NewOak Capital Markets LLC is a five-year old company founded in 2008, and has advised on assets exceeding $3 trillion for more than 100 clients.

Report – Business Climate Rankings Have No Policy Value

A new report published by Good Jobs First claims that business climate rankings published by several organizations are based on flawed data, have no predictive value, and must not be used while formulating public policies.

Grading Places report

Grading Places report (photo – goodjobsfirst.org)

The report, titled “Grading Places: What Do the Business Climate Rankings Really Tell Us?,” is a revised second edition of a book on the same subject written by Dr. Peter Fisher, research director of the Iowa Policy Project.

The book was first published in 2005 by the Washington D.C.-based Economic Policy Institute (EPI).

Fisher examined several rankings for the study, including the Boston, Massachusetts-based Beacon Hill Institute’s State Competitiveness Report, the Small Business and Entrepreneurship Council’s U.S. Business Policy Index, and the Tax Foundation’s Location Matters, among others.

For the record, all three of the aforementioned ranking organizations and their ranking methodologies were included for analysis in the original EPI book in 2005.

Fisher says in the report that Beacon Hill’s ranking combines 45 variables related to fiscal policy, human resources, technology and business incubation. he claims that many of the variables among these 45 are “dubious choices.”

This is all pretty much similar to what was in the book, updated to reflect changes in the ranking methodology. But in this latest report, Fisher additionally claims that whatever value there may be in this data is further undermined because 21 percent of the numbers are fabricated.

He says the examination of the methodologies of several top business climate rankings uncovered major errors, with effects being presented as causes and scores that do not take into account the differences in state taxation systems.

Given all these alleged flaws, Fisher says it’s no surprise that many such rankings produce contradictory results and are unable to predict which states’ economies are poised to thrive.

Greg LeRoy, executive director of Good Jobs First, said they are not trying to correct the rankings or present an alternate ranking system.  He says the report’s main point is that the needs of businesses and their individual facilities vary so much, along with the conditions in each metro area, that it makes the whole concept of state business climates nonsensical.

Read the full Good Jobs First report on Grading Places – Download (pdf)

Mercedes-Benz Kicks Off $70M Expansion in Tuscaloosa, AL

Mercedes-Benz U.S. International (MBUSI) executives were joined by Alabama Governor Robert Bentley and others for the groundbreaking of MBUSI’s $70 million logistics hub in Vance, Tuscaloosa County, AL.

Gov. Bentley and MBUSI execs at groundbreaking

Gov. Bentley and MBUSI execs at groundbreaking (photo – alabama.gov)

This expansion of the German automaker’s plant, which already employs 3,000 workers, will create an additional 600 new jobs.

The announcement of this $70 million expansion to build a 900,000-square-foot parts consolidation hub was originally made little more than a month ago in March 2013.

Back then, the company had said they would be adding 500 jobs. Some of these jobs will not be direct jobs at MBUSI, although they may be located within the premises.

The company only said in a statement that the Tuscaloosa plant and its contractors and service providers would together need to hire 600 new employees due to the expansion.

The company announced the expansion after the Tuscaloosa County Industrial Development Authority (TCIDA) board approved $3.87 million in tax abatements, including on use taxes applicable for the construction.

At that time, TCIDA said the new jobs would generate $310 million in additional payroll over a 20-year period.

The Tuscaloosa plant currently manufactures three SUV models, and is slated to receive two more models. A C-Class Sedan will be given to the plant next year, and production for the fifth model, a new SUV, is scheduled to begin in 2015.

Markus Schaefer, president and CEO of MBUSI, said that with the addition of these models and rising demand, their logistics operation was getting increasingly more complex.

The three Mercedes-Benz SUV models (Class-M, Class- GL and Class- R) are exclusively produced only in Vance, but are exported to markets in 134 countries. The parts used for these models vary based on the country they are being sent to, so it makes the logistics very complicated.

When the Class-C sedan is added next year, the plant will run out of space for its staging area. That’s why they’re pushing through with the expansion for the new logistics hub to be completed by the end of this year.

Governor Bentley said it was twenty years ago that Mercedes-Benz first established its presence in Tuscaloosa County, and Alabama’s partnership with the company is stronger than ever now.

MyHouse Maker Priton to Add 200 Jobs in Santa Rosa County, FL

Florida Governor Rick Scott announced that Priton, LLC will be creating 200 new jobs and making a $2.9 million investment on setting up a facility in Santa Rosa County, FL.

Santa Rosa EDO

Santa Rosa EDO (photo – santarosaedo.com)

The Conshohocken, Pennsylvania-based Priton currently produces the “MyHouse” prefabricated homes which are exported to customers in Mexico, the Caribbean and other parts of South and Central America.

They now plan to set up a manufacturing facility in Santa Rosa that will make wall panels thrice as strong as the minimum requirements specified by Miami-Dade county code regulations.

The panels will then be loaded up into containers along with everything else (roofs and floors, appliances, plumbing, wiring, windows and doors, etc.) required to assemble and occupy the home.

To this end, Priton has purchased the former 84 lumber plant and will be hiring 200 employees over the next three years. The average annual wage for these jobs is s $35,110. The county estimates the project will create another 380 indirect jobs.

Jeff Selph, director of operations and partner for Priton, said their site selection team was thankful to the Santa Rosa Economic Development Office staff for all their assistance and the resources provided.

The Santa Rosa EDO worked with Enterprise Florida and the Department of Economic Opportunity to secure the Priton project.

Late last year, Priton started looking for a manufacturing site based on close proximity to a container shipping port ideal for sending its products across the seas to its markets in South and Central America.

They settled down on the Santa Rosa Industrial Park because the location was ideal for their shipping requirements, and also because of the availability of skilled workers and veterans. Not to mention the fact that the state and local incentives offered to Priton add up to $3.45 million.

This includes a $2.35 million IRREF (Industry Recruitment, Retention and Expansion Fund) grant, and another $600,000 under the state’s QTI (qualified target industry) tax refund. Priton is additionally eligible for a $500,000 brownfield redevelopment bonus refund.

The IRREF program is administered by the Univ. of West Florida and provides grants to businesses relocating or expanding in one of the eight Northwest Florida counties most severely impacted by the BP oil spill. The grant approved for Priton is the first IRREF grant awarded within Santa Rosa County.

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