EDA 2012 Annual Report – $297M for 674 Projects

The Fiscal Year 2012 annual report published by the U.S. Economic Development Administration (EDA) shows that the agency awarded about $297 million to support 674 economic development and disaster relief funding projects.

EDA FY 2012 annual report

EDA FY 2012 annual report (photo –

Highlights from the EDA’s FY 2012 annual report:-

Construction – Out of the total, $194 million worth of EDA funding went to construction projects. These projects together generated $4.6 billion in private investments and resulted in the creation and retention of 40,000 jobs.

Planning Studies – EDA awarded $29 million for 327 studies to help develop regional planning strategies.

Rural Jobs and Innovation Accelerator Challenge – EDA worked with 12 federal agency partners and awarded $9 million under this new program to 13 organizations to leverage local assets for supporting industry clusters and partnerships.

Advanced Manufacturing Jobs and Innovation Accelerator Challenge – EDA and five other federal agencies awarded $20 million for 10 public-private partnerships supporting local job creation efforts.

Apart from the usual report sent to Congress, EDA’s annual report has also been published this year as a web-based resource with an interactive online map that allows users to examine state-by-state investments.

Texas was the biggest beneficiary of EDA funding in FY 2012 in terms of the number of projects funded, receiving 47 grants that add up to around $21.2 million.

The University of Texas at San Antonio’s Eagle Ford Shale Community Development Program alone got $1 million from the EDA, meant to assist South Texas communities position themselves to take advantage of opportunities created by Eagle Ford Shale.

As per grantee estimates, the 47 EDA grants to Texas will help recipient projects retain or create 6,144 jobs.

Tennessee topped the charts in terms of the number of jobs created, with 24 grants totaling $21 million in EDA funding helping retain or create 6,812 jobs.

California got 25 grants totaling $18 million that will help retain or create 4,090 jobs.

The Los Angeles Kretz Innovation Campus was awarded $2.1 million to be used for installing a solar power photo voltaic canopy, and for other needs such as laboratory equipment and a training and prototyping workshop at the incubator in the campus. This EDA-supported project will help create 171 jobs.

FY 2012 EDA report – Download (pdf) or see the online map.

ICON Aircraft Looking at Vacaville, CA for Manufacturing Facility

Los Angeles, California-based ICON Aircraft has filed a letter of intent with the City of Vacaville, CA for setting up a facility next to Nut Tree Airport for manufacturing its light sport aircraft (LSA).

ICON Aircraft A5 LSA

ICON Aircraft A5 LSA (photo –

ICON was launched in 2005 by Kirk Hawkins after the FAA created a new LSA category in 2004 that had significantly reduced regulatory burdens for both LSA manufacturers and users.

ICON’s introductory LSA model – the long-awaited amphibious ICON A5, has retractable landing gear, uses automotive fuel, can land and take-off on water as well as on runways, and can fly at a maximum speed of 120 mph.

From the cockpit, it looks more like a car for two, and has been designed and priced to make it easier for new people to take up flying in their own plane. Pilots need to log only 20 hours of flight time to get the LSA license, which is half the time needed for other aircraft.

ICON’s A5 has been under development longer than expected, but the company still has a long and loyal list of almost 1,000 customers who have paid deposits and are eagerly waiting to get their own sport aircraft.

Until now, ICON has based its operations entirely in Southern California. Apart from the administrative headquarters in Los Angeles, Icon also has development, testing and manufacturing teams in a facility in Tehachapi, CA.

The proposed move to the existing 137,940-square-foot building at 2141 Beechcraft Road in Vacaville would take them a long way over to Northern California, in between San Francisco and Sacramento.

ICON’s latest outreach to Vacaville officials for support and incentives was preceded by the company raising $60 million in May 2013 as part of its fourth and final equity funding round.

The company said it would use the new funding to complete preparations for production, regulatory compliance and boost R&D for adding new aircraft models.

If they go ahead with the proposal, Vacaville stands to gain millions of these dollars in investments and new sales, property and personal taxes, and up to 500 new general aviation manufacturing and sales jobs. Not to mention spending by ICON’s customers who will stay in the city when they come for buying a plane and getting training.

ICON first started looking at sites for relocation in 2010. Vacaville has been pursuing this project since 2011 in partnership with Nut Tree Airport management and other local organizations including Solano Community College, the Solano Economic Development Corporation and Solano County officials.

The Vacaville City Council will be meeting on Tuesday, July 9, 2013 where it will consider a resolution authorizing city manager Laura C. Kuhn to execute the non-binding letter of intent (pdf file) with ICON Aircraft Inc.

Apart from exemptions of a percentage of sales tax based on job creation and average wage commitments by ICON, the letter of intent also seeks about $250,000 as a loan for the permitting process, to be paid back from future sales associated with the project.

ICON is also asking for renaming of streets in the area and fast-tracking of all the permits required for site improvements and construction.

Solano Community College may enter into a partnership with ICON wherein it provides training for ICON employees under its Aeronautics Program, and may even expand its curriculum to match ICON’s needs.

The letter of intent states that the City and ICON will attempt to come to an agreement within 60 days, and hope to submit an actual agreement for the City Council’s approval on Aug 13, 2013.

Site Selection Rankings for Top Sustainable States and Metros

The latest issue of Site Selection magazine includes their annual rankings for the top sustainable states and metros.

Solar array at state prison in California

Solar array at state prison in California (photo – CaliDGS/

California topped the state rankings, and has all three of its largest metro areas in the aforementioned top 10 list of sustainable metros.

Texas is the only other state which has more than one metro area in the rankings. The Washington, D.C. metro area is listed as the top sustainable metro.

These rankings are based on an index which takes into account the number of LEED-certified buildings, the number of corporate facilities that are involved in the process of producing green products, renewable energy usage and the policy framework being implemented for promoting its use.

The top ten states, in order of their ranking, are – California, Oregon, Washington, New York, North Carolina, Texas, Massachusetts, Iowa, Colorado and Pennsylvania.

The list of the top 10 sustainable metros, in the order of their ranking, is as follows:-

  1. Washington-Arlington-Alexandria, DC-VA
  2. Chicago-Naperville-Joliet, IL-In-WI
  3. New York-Newark-Edison, NY-NJ-PA
  4. Boston-Cambridge-Quincy, MA-NH
  5. Houston-Baytown-Sugarland, TX
  6. San Francisco-Oakland-Fremont, CA
  7. Los Angeles-Long Beach-Santa Ana, CA
  8. Phoenix-Mesa-Glendale, AZ
  9. Dallas-Fort Worth-Arlington, TX
  10. San Diego-Carlsbad-San Marcos, CA

Among the many trends that Site Selection magazine explores in these rankings, the most interesting one is that the top sustainable territories seem to be moving towards smarter planning coupled with transit-oriented development.

The magazine also listed the top ten most sustainable foreign countries. This list was topped by Canada, where gaining green cachet is important to global companies in the energy industry and is reflected in their site selection process.

The magazine cites the example of Precision Drilling Corp., which moved into a building in Calgary, Alberta that has been awarded LEED Platinum certification. The company’s CEO said that sustainability was one of the factors influencing their decision-making process.

Canada was followed in the top 10 international rankings by Chile, Brazil, Spain, Germany, Sweden, Ireland, Mexico, South Korea and Turkey, listed in the order of their ranking.

Read more about these sustainability trends and the rankings at

Merced, CA Gets Call Center for Implementing Health Care Reforms

Merced County, California is setting up a regional call center to deal with the implementation of Covered California, which is the Golden State’s new health insurance exchange as required under the federal Affordable Care Act.

Covered California

Covered California (photo –

Starting from Oct 1, 2013, previously uninsured small businesses and individuals will be able to use this state-wide marketplace to enroll in affordable health plans. Coverage under these plans is set to begin on Jan 1, 2014.

Merced was chosen as the call center site for fielding calls and processing cases from nine counties, including Merced itself.

The center will create up to 45 new county jobs offering annual wages of up to $43,000, plus benefits and retirement.

The $5.6 million cost for the call center and the wages for the new county employees is being funded entirely through Medi-Cal, so the county is getting the call center and new jobs at zero cost to itself.

On the other hand, if the call center had gone to one of the other counties, Merced would have been obligated to that county for the cost of the calls, while still having to bear responsibility for the accuracy and on-time disposal of cases.

Since Merced currently has higher accuracy rates and efficiency, having their cases processed by another county would have meant a hike in penalties and sanctions. By securing the call center project in Merced itself, the county managed to eliminate these risks and additional costs.

The Merced County Board of Supervisors approved the County Human Services Agency (HSA) application for the call center and new hires in March, and some of the new positions have already been filled.

The call center will be fully operational by Oct 1, 2013. Because of the tight deadline, HSA decided to locate the center in their existing leased space on 16th St which was already wired into the C-IV network used for eligibility determination and processing across 39 counties in California.

This saved the additional time and cost that would have been required to configure a new site.

There’s also the cost savings associated with moving uninsured citizens into Medi-Cal. The medical care costs of these people are currently being borne by the county.

Merced County estimates there may be up to 39,600 new people eligible for Medi-Cal once the Affordable Care Act is implemented, and anywhere between 9,000 to 29,000 of them may enroll through Covered California.

Los Angeles Kicks Off Nation’s Largest Rooftop Solar FIT Program

Los Angeles, California has launched the largest rooftop solar Feed-in Tariff (FiT) program in the nation, under which the Los Angeles Department of Water and Power (LADWP) will purchase solar power from hundreds of building owners with rooftop solar installations.

LA Mayor Antonio Villaraigosa flips on Clean LA Solar FIT project

LA Mayor Antonio Villaraigosa flips on Clean LA Solar FIT project (photo – Mayor’s Office)

The LADWP FIT aims to generate 150 MW of renewable and clean solar energy – enough to power more than 43,000 homes and reduce Co2 emissions by 147 metric tons. This is the equivalent of taking 28,300 cars off the road.

This FIT program was initially proposed by the CLEAN LA Solar Coalition and the Los Angeles Business Council.

LADWP ran a 10 MW project FIT program last year as a pilot to determine market pricing and how the program needs to be structured.

LADWP got 26 applications, of which 14 were deemed to be eligible projects that the LADWP could sign a power purchase contract for.

The first FIT project completed under this demonstration program was the rooftop solar installation of Oxnard Plaza Apartments in North Hollywood.

Los Angeles Mayor Antonio Villaraigosa flipped a switch, and the building started sending to the LADWP what will amount to 142,000 kilowatt-hours of solar energy per year.

LADWP is now accepting applications for a second round of 20 MW allocation under the program starting July 8, 2013. A lottery process will select from among eligible project applications submitted in between July 8-12, 2013.

The first 20 MW round was put out earlier this year in February, and received 104 applications from within the City of Los Angeles. Of these, 60 have been selected and LADWP will sign contracts with them this summer.

LADWP General Manager Ronald O. Nichols said this was just the beginning of what they expect to be a long and beneficial public-private partnership. He said Angelenos can expect to see thousands of solar panels on rooftops throughout the city over the next few years.

Los Angeles has already started realizing the economic development benefits of this program. Solar Provider Group, which was responsible for the Oxnard Plaza installation, decided to set up their U.S. headquarters in Los Angeles. As the program develops, the company plans to create jobs for everything from solar installations to project management, finance and business development.

A University of California, Los Angeles study commissioned by the LA Business Council Institute estimated that the Clean LA Solar program would create 4,500 installation, construction, administration, design engineering and maintenance jobs in the first five years.

The UCLA study also said the program would be able to leverage $300 million in federal tax credits for businesses in Los Angeles and generate more than $500 million in private investments.

California Approves Economic Development Reforms Bill

On June 27, 2013, the California State Assembly approved an economic development reform bill (AB-93) which moves $750 million worth of business incentives from California’s Enterprise Zones to statewide incentive programs.

CA Enterprise Zone reform

CA Enterprise Zone reform (photo –

AB-93 was amended and approved by the California State Senate on a 30-9 vote a couple of days ago, so it went straight to the Governor’s desk for his signature after the amended version was passed by the Assembly on a 54-16 vote.

After the bill’s passage, CA Governor Edmund G. Brown Jr. issued a statement in which he said it was a big and bipartisan win for working people and businesses in California. He said AB 93 would create good manufacturing jobs and help grow the economy.

Kish Rajan, director of GO-Biz, the Governor’s Office of Business and Economic Development, said that the California economy had been coming back strong during the past year. He said the AB 93 vote adds to that momentum and would put their foot on the accelerator for economic development in California.

The bill had backing from labor groups, while others, such as the League of California Cities, opposed the bill, claiming it would decrease local tax revenues and place additional burdens on struggling communities.

AB 93 moves Enterprise Zone incentives to three new programs, as outlined below:-

The existing sales tax credit for Enterprise Zone businesses is now a statewide sales and use tax (SUT) exemption on manufacturing and bio-tech equipment purchase for manufacturing companies and those engaged in biotech R&D.

A Hiring Credit of 35 percent of wages that fall in between 1.5-3.5 times the minimum wage will be available for five years in specific geographic areas to companies hiring long-time unemployed workers, veterans, ex-offenders and those receiving federal earned income tax credit.

The California Competes Credit, to be administered by GO-Biz, will help the Golden State attract new business activity and retain existing ones by offering tax credits as an incentive based on the number and quality of jobs created.

Read more about the reforms approved under AB 93 in this updated briefing put out by Go-Biz. 

Pennymac Adds 200 Mortgage Jobs in Sacramento

PennyMac Mortgage Investment Trust (NYSE: PMT) is adding 200 jobs at a new office space it has leased in a business park in Sacramento County, California.

PennyMac Mortgage Investment Trust

Photo –

The announcement was made by the Sacramento Area Commerce and Trade Organization (SACTO), which says the company has leased 26,384 square feet at PS Business Park.

The Moorpark, CA-based company has already hired 40 employees and plans to increase the workforce at this facility to 200 jobs.

PennyMac deals mostly with residential mortgage loans and mortgage related assets. They try to raise the value of distressed mortgage loans by acquiring them through loan modification programs. With the value of real estate on its way up, many home owners are now more interested in saving their homes through programs such as the U.S. HUD’s HAMP and HARP programs.

The PennyMac expansion will add mortgage professionals to help the company originate and process loans from all over the country associated with HARP (Home Affordable Refinance Program), which helps homeowners whose mortgages are underwater.

Sacramento was chosen because it will help the Southern California-based company expand into Northern California, while at the same time being able to tap into the skilled workforce and training resources in the region.

PennyMac Managing Director Patrick Benton said they see tremendous opportunity in the Sacramento market, and added that they were looking forward to a long and successful tenure.

As far as Sacramento is concerned, the regional economic impact of the project is estimated to exceed $133 million. Since the company already has an office in Natomas under an Enterprise Zone, PennyMac is eligible for state income tax credits that are provided for creating new jobs.

SACTO named Sacramento County and the California Governor’s Office of Business and Economic Development (GO-Biz) for their help in securing the project, in addition to the California Employment Training Panel and the Sacramento Employment and Training Agency.

SACTO Board of Directors Chairman David Parkes said they were pleased to welcome PennyMac, and added that the company’s decision to select Sacramento was another sign of the long-anticipated housing market recovery and the overall economic health of the region.

Volvo Announces DME-Powered Heavy-Duty Truck Production Project

Executives from Volvo Trucks, Oberon Fuels and grocery store chain Safeway Inc. came together at the steps of the State Capitol in Sacramento, California to talk about an alternative fuel powered heavy-duty truck the three companies have managed to commercialize.

DME-powered Volvo Trucks event

DME-powered Volvo Trucks event (photo –

The blue truck in the backdrop represents the latest addition to Volvo’s “Blue Power” alternative fuel strategy.

This is the first heavy-duty commercial vehicle model powered by dimethyl ether (DME) that will be actually produced for sale in North America.

DME has all the positive performance qualities associated with diesel, and has the additional advantage of being a clean fuel that produces no soot when it burns.

The elimination of the diesel particulate filter (DPF) further reduces the weight and complexity of DME tanks, which are already lighter than LNG and CNG tanks.

The kicker is that DME can be made from both biogas and natural gas, so there’s no shortage of natural resources required to produce the fuel at scale. When produced from biogas, use of DME in vehicles reduces CO2 emissions by 95 percent as compared to diesel.

Oberon Fuels CEO Neil Senturia said their production process enables previously wasted resources (food, agricultural and animal waste) to be converted into clean-burning DME.

Volvo plans to start limited production of these vehicles in 2015, adapting the Volvo D13 engine to run on DME. Volvo will make the trucks, Oberon Fuels will supply the DME, and Safeway will be the first customer using two of these trucks for their commercial operations in the San Joaquin Valley region.

The project has already secured $500,000 in funding from the San Joaquin Valley Air Pollution Control District (SJVAPCD).

Seyed Sadredin, executive director of the SJVAPCD, said they chose to fund this project because air quality was a major challenge in the San Joaquin Valley, and new technologies such as DME-powered commercial vehicles are badly needed.

Kish Rajan, director of the California Governor’s Office of Business and Economic Development, was also present at the event and said that GO-Biz looks forward to helping Volvo and Oberon in maximizing the benefits of DME used as a commercial transportation fuel.

Tom Nartker, vice president of transportation at Safeway, said they decided to participate in the project because the company already has Volvo trucks in its fleet and the DME technology would be a natural fit for their sustainability strategy.

Göran Nyberg, president of Volvo Trucks North American Sales and Marketing, said it was clear that DME technology had great potential for North America, and would allow the company to further its commitment towards both the environment and its customers.

Gothenburg, Sweden-based Volvo Group has 115,000 employees with production facilities in 19 countries. Last year, the company generated sales worth $45 billion in 190 markets. Volvo trucks sold in the U.S. are currently made at the 300-acre Volvo manufacturing plant in Dublin, Virginia.

Citi-EIU Report – Benchmarking the Future Competitiveness of Cities

A report from the Economist Intelligence Unit (EIU) that was commissioned by Citi says that New York City remains the most competitive city in the world, and will continue to retain the title until at least 2025.

Hot spots 2025 infographic (click to expand)

Hot spots 2025 (infographic – Citigroup/

The report, titled “Hot Spots 2025: Benchmarking the Future Competitiveness of Cities,” ranks the competitiveness of 120 major cities around the world based on the ability to attract business, talent, capital and tourists.

Here’s the top ten list of the most competitive cities in 2025, in the order of their ranking – New York, London, Singapore, Hong Kong, Tokyo, Sydney, Paris, Stockholm, Chicago and Toronto.

Apart from New York and Chicago, the United States has four other cities in the top 20 list. Washington, D.C. secured 14th place, while California secured two spots for Los Angeles and San Francisco in the 17th and 18th places respectively. Boston is ranked 19th on the list.

Citi CEO Michael Corbat said that cities around the world are evolving as centers of innovation and economic growth engines. He said the EIU research Citi commissioned enhances an understanding of the factors that drive urban competitiveness and sheds light on how the top performers create their competitive advantage.

The report says New York’s top ranking is because of its financial maturity, institutional character and economic strength.

NYC Mayor Michael R. Bloomberg said that EIU’s recognition of the City’s place at the global economy’s forefront was a testament to the ingenuity of hard-working New Yorkers and efforts the administration has made to diversify New York’s economy.

The report also says a city’s size doesn’t have that much impact on how competitive it is. Environmental governance and sustainable policies do make an impact, with Tokyo scoring high for its ability to deal with natural disasters.

Among U.S. cities, Chicago, Illinois gets the highest score for environmental governance. Chicago Mayor Rahm Emanuel said that decisions made as a city over the next few years will help determine Chicago’s future for decades to come, and added that he was extremely optimistic about the City’s future.

As per the report, some of the biggest factors that impact competitiveness are the quality of the institutions and maritime access.

Nine of the top 10 fastest rising cities on the list are either seaports or have easy maritime access. The reverse also holds true, since most of the cities that are rapidly losing competitiveness are either landlocked or have allowed their seaports to become less accessible.

Read the full Hot Spots 2025 report – Download (pdf)

Go-Biz Explains California’s Proposed Revision of ED Incentives

Go-Biz, the California Governor’s Office of Business and Economic Development, has issued a briefing explaining the components of the state’s proposed revision of economic development incentives.

Go-Biz deputy director explains proposed California incentives

Go-Biz deputy director explains proposed California incentives

The proposal called “NEW TOOLS FOR A NEW ECONOMY” was a part of the May Budget, and redirects around $750 million from the Enterprise Zone program to statewide incentives.

It includes proposals such as a manufacturing equipment sales tax exemption, a hiring credit, and investment incentives called the California Competes Incentive Credit which gives Go-Biz more flexibility for negotiations.

Leslie McBride, deputy director for Business Investment Services for GO-Biz, pointed out that two of the three proposed incentives will be available statewide, which she said makes all of California an Enterprise Zone.

The existing sales tax credit offered by California is limited to basic manufacturing equipment for companies in an Enterprise Zone, and excludes R&D spending. The new sales tax exemption will be available to companies located anywhere in the state and includes R&D equipment purchases by manufacturing and biotech industries.

Starting Jan 2014, qualified companies will be exempted from state sales tax for their first $200 million worth of equipment purchases. California estimates that it will need to provide exemptions worth around $400 million annually under the new system.

Under the existing system, companies can only claim the sales tax exemption in their annual income tax return. Under the proposed system, they are not required to pay the tax when they purchase equipment.

The second proposed incentive is a Hiring Credit, available to businesses located in areas with the 25 percent highest share of poverty and unemployment in the state. This five year credit offers 35 percent of annual wages (five year total of 175 percent) between 1.5 to 3.5 times the minimum wage, and is available for hiring unemployed workers and veterans, and people who are eligible for the federal earned income tax credit.

The Hiring Credit is not available for replacing existing employees, and is only valid for new jobs created. Small businesses must get at least 25 percent of the allotted credits. The state expects to have to provide at least $100 million per year in hiring credits.

The third proposed incentive is the California Competes Credit, to be administered by Go-Biz and approved by an impartial committee in order to secure economic development projects involving job creation and new capital investments.

The California Competes Credit will be available for statewide projects, with 25 percent going to small businesses. The state expects to provide between $100 million to $200 million of these credits per year.

Read the full Go-Biz briefing on California’s proposed new business incentives – Download (pdf)

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