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By Joe Boomgaard | MiBiz
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WEST MICHIGAN — When lawmakers enacted the Next Michigan Development Act in December of 2010, their goal was to create new collaborative regional groups that would be able to offer their own incentives to businesses reliant on multimodal forms of transportation.

The West Michigan Economic Partnership, a collaboration between groups in Kent and Muskegon counties started through their economic development organizations, The Right Place Inc. and Muskegon Area First, respectively — hopes to be among the first in the state to pilot the new program to market certain types of public or private real estate.

The act called for the state to authorize the creation of five regional development corporations, each focused on development activities in core urban areas. Each of the so-called “Next Michigan Development Corporations” can establish up to 12 Renaissance Zones, up to 200 acres in size, based on the number of participants in an interlocal agreement. The legislation, signed by former Gov. Jennifer Granholm, was spurred by the “Aerotropolis” concept for clustered business development around the Detroit Metro and Willow Run airports in Southeast Michigan. Many West Michigan-based State Representatives — including Republicans Dave Agema, Justin Amash, Arlan Meekhof, Bob Genetski and Brian Calley — voted against the bill when it appeared in the State House last December. The State Senate at the time voted overwhelmingly in favor of the bill.

To qualify under the act, a property of at least 35 acres in size must be located in an urban services area that has water and sewer services available on site. The site must be served by at least two modes of transportation — road, rail, air or port — and be located not more than one mile away from a Michigan or federal highway interchange.

In West Michigan, The Right Place and Muskegon Area First have their eye on a handful of properties that officials believe would meet the qualifications. The two groups started talking in early February to see what the program could mean for West Michigan.

“This is the first time that we’ve collaborated specifically together around the development and implementation of a joint economic development program. We have our conversations and we talk, but around a specific program — this is a first,” said Rick Chapla, VP of business development at The Right Place. “To begin with, (the collaboration will take shape between) the two organizations in conjunction with the local units of government in Muskegon and Kent County. Not every unit of government has properties that meet these criteria. It’s not a general economic development tool.”

For example, Muskegon may have four or five different pieces of property that would fit with the specifications of the law, said Ed Garner, president of Muskegon Area First.

“The driver of this project is that … more and more companies need water and rail and road or all three,” Garner said. “Because this is limited in scope, it shows the importance of intermodal forms of transportation. This all fits together with what we’re doing here. We’re leading the charge. This puts some extra teeth into the (opportunities with) specific properties.”

To date, Chapla and Garner have been spearheading the creation of the WMEP and have approached the two county governments about the plan. In early August, they started additional conversations with other local governments about potential properties that could fit with the program.

Ultimately, they hope to submit plans for WMEP to the Michigan Strategic Fund by the end of the year. Chapla said if it is approved, the WMEP organization will likely be governed by a board of directors representing the various local governments that are a part of the group. He expects the board to develop its own budget for identifying and marketing the specific properties subject to the act. A market analysis would also have to be performed on the identified properties.

Garner and Chapla said they’d expect the Michigan Economic Development Corp. to help market and give priority to the properties identified by the partnership and share them with prospects looking to locate or expand in Michigan.

“We’d like to have them be on the short list of properties (the MEDC) can turn to where the due diligence is done,” Garner said.

The allure of the Next Michigan Development Corporations is that they’ll be able to use incentives that aren’t available in other areas. Local corporations will be able to “mix and match” the incentives to fit the desires of the communities and the companies interested in the sites. Garner said it allows for more of a targeted approach versus a shotgun in terms of economic development tools. Having these very specific, in-demand properties identified and vetted ahead of time will help the state speed the site selection process and arm economic developers and businesses with valuable and readily available information.

“This is an acknowledgment of the increasing role of the points of contact that are more local,” Chapla said. “It’s a bit of an experiment on the state’s part. It leaves a fair amount of the creativity up to us in how we structure ourselves and how we operate. … This is a different approach to economic development than what we’ve tried in the past.”

In particular, Chapla said that Renaissance Zones were much broader because they provided incentives to any type of business. The new act is more focused on properties with available infrastructure. The package of incentives will be “tailored to the needs of the logistics-sensitive business,” he said.

“There’s been a lot of talk about the state decentralizing and taking things from the bottom up. It’s not a one-size-fits-all (approach). They realize the different communities are different, and who knows them better than the economic development people there. They said, ‘We want it to be you — the local and regional communities — (to do the deals) and we’ll find a way to support you at the state level. … They key is that the businesses have to be logistics sensitive. We feel we have properties that meet the criteria of these companies.”

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TAGS:

• aerotropolis
• arlan meekhof
• bob genetski
• brian calley
• dave agema
• ed garner
• jennifer granholm
• justin amash
• muskegon
• rick chapla