June, 2010 Archives
Oklahoma City Council Members today approved amendments to a 2008 joint agreement between developer Horizon Group Properties LP (HGP), the Oklahoma City Economic Development Trust and The City of Oklahoma City for the developer to build an outlet mall in Oklahoma City. An agreement was first signed in May 2008 between city entities and the developer. The project was set to open in November 2009, but dramatic changes in the retail market and the developer’s difficulty to obtain financing took a toll on the project. The original agreement required a minimum investment of $50 million by HGP. The project was expected to generate approximately $106 million in annual retail sales at the center and an estimated $4.1 million in sales tax revenues each year for the city. Further, HGP requested incentives with the agreement to include a regional marketing reimbursement of $5.5 million over a ten-year period (approximately 12.5 percent of sales taxes received). Details within the amended agreement include a change in size of the center from 340,000 square feet to 320,000 square feet, and an increase from $2,395,000 to $3,937,690 in public improvements to the site from the city, which includes $1 million for Drive 2, a private road. The project is expected to generate 700 construction jobs and 1,000 permanent jobs, with $19 million in direct payroll. It is anticipated that the property will bring 90 retailers into the outlet center with a possible 75,000-square-foot expansion on several out-parcels based on the success of the mall. By August 31, 2010, the developer must meet certain requirements before the city proceeds with public improvements. By end of August, the developer needs to close on land acquisition, execute its construction contract and provide evidence of financing for the project.
Caves Valley Partners has been selected to receive up to $16 million in tax-exempt federal aid to rehab the Investment Building in downtown Towson, which it plans to gut and redevelop into the new headquarters for Mile One Automotive. Baltimore County’s economic development office announced its award Monday of $16 million in Recovery Zone Facility Bonds to Caves Valley. The development team, which includes real estate veterans Anthony W. Deering and Arthur H. Adler, plans to spend $27 million to redevelop the 12-story building. The county is not on the hook for the federal bond funds, earmarked in the federal stimulus bill to help convince banks to lend money to commercial redevelopments. Caves Valley will use the bond funds to borrow more money to finance its project, Baltimore County Economic Development Director David S. Iannucci said in Monday. Caves Valley development director Arsh S. Mirmiran told the Baltimore Business Journal in May his firm hopes the rehabilitated building, to be called Towson City Center, will eventually employ 500 people and become the centerpiece of Towson’s ongoing transformation. Construction could begin this fall. The county also set aside $10 million in Recovery Zone funds for Home Run Lodging LLC to build a Hampton Inn on Red Run Boulevard in Owings Mills. Home Run wants to build a 105-room, five-story hotel, expected to cost $11.3 million. The county has been earmarked to receive $48.8 million in Recovery Zone bond funds. Iannucci said the county received about a dozen requests for the aid and his office plans to announce additional project recipients in the future.
The U.S. Department of Commerce’s Economic Development Administration has awarded a $1.5 million grant to the Ottumwa Regional Airport in Iowa. The funds will be used to update water infrastructure, provide infrastructure support to the new job training facility, encourage future private investment and create jobs. “It’s a significant grant. It provides support for the infrastructure that services water to the new Job Corps and all the industries over by the airport,” said Ottumwa City Administrator Joe Helfenberger. Plans include water main additions, sewer improvements and updates to Fifth Street, among others. Helfenberger said the improvements will also be helpful in fire services near the airport. “It makes it possible for some businesses to do future expansions and to keep existing jobs because there was a need for additional water supply to the area,” Helfenberger said, adding that about 205 jobs would be saved and others would be created. Ottumwa Water and Hydro is covering the local match for the grant, which totals $1,649. The total project is estimated to cost $3.1 million. The funding is estimated to allow for $15 million in private investment to be leveraged. The airport is a 1,440-acre complex and includes a General Aviation airport with two runways, rental hangars and full aviation services. The Industrial Park houses manufacturing, trucking and industrial businesses.
The Tennessee Valley Authority is re-opening the Generations Partners program. Distributors, such as Nashville Electric Service, had been among those shocked when told last week that the program would take no new participants. “TVA launched Generation Partners as a pilot project, with periodic adjustments expected along the way, to encourage customer interest in small to medium-sized renewable energy projects, such as rooftop solar panels,” John Trawick, a TVA senior vice president said in the announcement. “The response has exceeded all expectations, prompting us to expand and enhance the program to include additional projects and help support public interest in renewable energy.” Alternative energy projects, including solar and wind, of up to 200 kilowatts are eligible for the program, which includes a $1,000 payment for each participant to help with startup costs. Also, TVA buys all of the green power from participants, paying the retail rate, plus any fuel cost adjustment, plus a premium per kilowatt-hour, depending on the type of renewable energy produced. The program offers incentives for solar, wind and other types of alternative energy, but the solar program, which pumps electricity into the grid, has proven the most practical and popular for homeowners and small businesses. Generation Partners also spurred new solar installation businesses and brought jobs to others. Officials with the public power producer, which had set aside $50 million for the program, said they had many more requests for help with projects than they can fund. TVA also said it was: – Moving 33 additional customer proposals into the approval process; – Evaluating various longer-term solutions aimed at transforming Generation Partners from a pilot project to a firmly established TVA program. TVA began an effort earlier this year that gave approval in advance of a project to make it easier for customers to finance equipment. Large non-solar projects that can take big chunks of the available projects have been one issue of concern for the solar installers.
The site of the former Pfizer World Research Headquarters in New London, CT is being purchased by General Dynamics’ Electric Boat (EB) unit. The nuclear submarine builder will invest $99 million in a new research, development, engineering and design facility that will create 700 jobs. “Pfizer’s announcement in 2009 that it was vacating its global research headquarters in New London and consolidating operations in Groton created enormous uncertainty throughout an entire community,” Gov. M. Jodi Rell said. “The news caused understandable fears about individual career prospects and cast doubt on the economic promise of the Fort Trumbull redevelopment project. “Today, however, we open a new and important chapter in that same community – we look on a brighter prospect for the same community and see a far rosier future for the local economy,” Rell said. “EB’s decision to purchase the former Pfizer facility for its own R&D center will create 700 engineering jobs, establishing a center of excellence in the field of engineering that will help Connecticut develop and sustain a work force in this critical field. It also establishes a robust pipeline for future innovation.” Electric Boat, a subsidiary of Groton-based General Dynamics, is the world’s premier designer and builder of nuclear submarines. The company plans to purchase land and buildings at 50 Pequot Avenue that are currently owned by Pfizer and upgrade two EB-owned buildings in Groton. The project will create 700 positions, adding to EB’s 2,300 engineers and more than 8,000 total employees already in Connecticut. “We have been coordinating closely with Gov. Rell and the State of Connecticut, the City of New London, the U.S. Navy and Pfizer to determine if this site meets our needs and the initial results are very encouraging,” said John P. Casey, president of Electric Boat. “We appreciate the state’s support, which was instrumental in making this transaction.” The Department of Economic and Community Development will assist EB with a $15 million grant that will be phased over three years at $5 million per year. Funding may be used for construction, to buy equipment and for other eligible project-related activities. Because the New London facility is located in an enterprise zone, EB also may be eligible a five-year, 80 percent abatement on real and personal property taxes and a 25 percent corporate tax credit for 10 years. The former Pfizer site previously was enmeshed in a controversy that reached all the way to the U.S. Supreme Court, which upheld the state’s right to use eminent domain to seize nearby residential property […]
The Memphis Coalition for Advanced Networkingrn(MCAN) inaugurated its ultra high speed fiber-optic communications network thisrnweek with an event at the University of Memphis FedEx Institute of Technology. MCAN is an independent, nonprofit corporationrnchartered to promote and operate leading-edge communications technologies thatrnsupport education, research, public service, and economic developmentrninitiatives. MCAN founding members include the University of Memphis,rnUniversity of Tennessee Health Sciences Center, St. Jude Children’s ResearchrnHospital, and the Memphis Bioworks Foundation. Key corporate partners includernXO Communications, Cisco Systems, and Pomeroy IT Solutions. In addition to facilitating scientificrnresearch, MCAN is designed to generate economic benefit from advancedrnnetworking applications. “The launch of this ultra high-speed researchrnlink creates intriguing potential for the Memphis business and entrepreneurialrncommunity,” said Russell Ingram, president and executive director of MCAN.”Connectivity at this speed will allow development of novel technologiesrnand applications that would otherwise not be possible. These new technologiesrnwill inevitably lead to new businesses and new jobs.” MCAN is the result of several years of work byrnthe Tennessee Department of Economic and Community Development, Oak RidgernNational Laboratory, and the Memphis community. In 2008, the State of Tennesseerngranted a contract to Oak Ridge to create a high-speed link between Oak Ridgernand Memphis. In 2009, Oak Ridge requested the participation of the Memphisrncommunity in designing and implementing that link. In response, representativesrnof the four major Memphis research institutions, along with an array of other Memphisrncommunity leaders, formed MCAN to build and administer a 10 gigabit per secondrndata network among the research institutions and between Memphis, Oak Ridge,rnand the national Internet2 research network. In early 2010, the TennesseernDepartment of Economic and Community Development funded the joint MCAN/OakrnRidge project with a grant of $3 million. “The MCAN infrastructure provides vastlyrnimproved data transfer capacity, allowing researchers to collaborate using datarnthat would otherwise present a significant challenge,” says Dr. ClaytonrnNaeve, St. Jude Children’s Research Hospital CIO and MCAN board chairman.”For example, the St. Jude Children’s Research Hospital/WashingtonrnUniversity Pediatric Cancer Genome Project will result in the sequencing of 1200rnhuman genomes, each of which requires the production of 90,000,000,000rncharacters of information. If printed out, this amount of data would fill 40rnmillion 4-drawer filing cabinets, enough to fill 26 Memphis Pyramids. MCANrnmakes it possible for researchers to transmit data on this scale.” MCAN is a state of the art, very high speedrnoptical broadband communications network deployed over more than 50 miles ofrnoptical fiber reserved solely for MCAN use through a long term lease with XOrnCommunications. MCAN connects with similar research networks in Tennessee tornform a statewide very high speed research backbone connecting the principalrnresearch institutions in east, middle […]
It’s a problem familiar to Hollywood screenwriters and film directors: an idea that seemed like a sure thing during an artistic late-night brainstorming session ends up on the cutting room floor when it sends test audiences howling for the exits. Now, some red-faced state economic development agencies know the feeling. During the past half-decade, 44 states have adopted incentives to encourage film production in their neighborhoods. At least 28 states are offering generous tax credits to the movie-making industry, which has been seen as a surefire and relatively simple medium for converting unused facilities into job-creating locations. New Mexico, Iowa, Michigan, Louisiana and New Jersey, among others, have put out the legislative welcome mat to Hollywood. Unfortunately, some of these initiatives have not produced a feel-good Hollywood ending. In Iowa, state officials are reeling from a Titanic-scale incentives disaster that has resulted in criminal charges filed by the state attorney general against the former head of the Iowa Film Office and a local film producer relating to the filming of a 2008 flick called The Scientist in Council Bluffs. The state probe, which is ongoing, found that Iowa tax credits allegedly had been used to purchase luxury vehicles and other personal items during the making of The Scientist. Additionally, the state has accused the film’s producers of inflating the cost of making the movie from $767,250 to almost $1.8 million in order to justify the receipt of $1.85 million in state tax credits. Last fall, as news of the attorney general’s investigation became public, Gov. Chet Culver ordered the entire film program shut down. In the months that ensued, several top state economic development officials in Iowa were axed, including Iowa Film Office manager Tom Wheeler. Meanwhile, Michigan’s economic development mavens have uncomfortably discovered that promoting film production in the Wolverine State also requires them to be film critics. Two years ago, film producer Andrew van den Houten became one of the first applicants for Michigan’s generous film subsidy, which pays for up to 42 percent of a movie’s cost. The result was The Offspring, a cannibalism-themed horror flick that apparently went direct to video, never gracing movie theater screens. The relatively low profile of Mr. van den Houten’s first flesh-eating epic probably let it slip under Michigan’s image-sensitive radar. But when the producer applied for funding for a sequel, state officials were ready. Even though the new film, The Woman, was said to be tamer than the original, Michigan Film Commissioner Janet Lockwood rejected the application. Lockwood invoked a provision […]
Whirlpool is shutting its Evansville, IN refrigerator plant at the end of this week, eliminating 1,100 jobs at a factory that has been a mainstay in Indiana since 1956. According to a report in Sunday’s New York Times, the appliance maker plans to move its refrigerator manufacturing to Mexico. At the Evansville plant’s peak in 1973, the facility employed nearly 10,000, with hourly wages approaching $20. One 17-year veteran of the Whirlpool production line expressed the bitterness of many employees when the company announced it’s decision. “This country made Whirlpool what it is,” Connie Brasel, who made thermal liners for refrigerators, told the Times. “They didn’t get world-class quality because they had the best managers. They got world-class quality because of the U.S. and their workers. And now they want to pack up and move to Mexico. I find it offensive.” After the announcement, the International Union of Electrical Workers put up a billboard in Whirlpool’s headquarter’s city, Benton Harbor, MI, reading “Shame on Whirlpool for building a new plant in Mexico to take good-paying jobs our of the U.S. during our nation’s tough economic times.” Whirlpool officials defended the move, saying the factory was undercut by high costs and underused capacity. Jody Lau, a Whirlpool spokeswoman, said the plant was “uncompetitive from a cost standpoint” and that Whirlpool is “always looking for ways to improve its operating efficiencies to help it stay competitive.” Ms. Lau also noted that the company still will maintain 20,000 of its 67,000 global employees in the U.S., including 300 research and development jobs in Evansville. Ironically, Whirlpool is shutting the Evansville plant at the same time that competitor General Electric is expanding its appliance operations in Louisville, KY, about 100 miles to the northeast. GE is hiring 420 workers to build hybrid water heaters now made in China.
In a sign of confidence that the economic recovery has staying power, Toyota is announcing that it will complete construction of its long-delayed auto plant in Blue Springs, MS, and begin operations at the $1.3-billion facility by the fall of 2011. According to a report in The New York Times, the Japanese automaker expects to hire 2,000 workers to build Corollas at the plant. Toyota halted construction on the Mississippi assembly plant 18 months ago when the global economy collapsed. The auto assembly facility is 90 percent complete. General Motors, meanwhile, also gave its vote of confidence to the economic trends by announcing that it will skip the regular two-week summer shutdowns at nine of its 12 U.S. assembly plants. GM is reported a 17 percent rebound in auto sales for the first five months of this year.
A group of regional foundations and philanthropists voted this week to award more than $5 million in grants to promote economic development in Northeast Ohio. The Fund for Our Economic Future, a collaboration of donors and philanthropists that provides grants to increase the economic competitiveness of Northeast Ohio, met at the Davis Center in Fellows Riverside Gardens to award one-year grants to six Cleveland-based nonprofit organizations that aim to grow business and attract new companies to Northeast Ohio. The Fund elected to give maximum amounts of $1.3 million to JumpStart, an entreprenuerial assistance organization; $1.1 million to BioEnterprise, which helps grow bioscience and healthcare companies; $825,000 to Team Northeast Ohio, a business attraction organization; $750,000 to the Minority Business Accelerator 2.5+, which provides business growth services to minority-owned businesses with at least $2.5 million in sales; $633,000 to NorTech, which promotes the growth of technology-based industries in the region; and $434,000 to MAGNET, an advocacy group for regional manufacturing industries. The grants will be awarded in phases, said Chris Thompson, a spokesman for the Fund. Grant recipients will have to meet performance “milestones,” to qualify for the maximum amount of grant funds, Thompson said. The Fund also issued two smaller grants. A $200,000 grant was awarded to a group that is working to strengthen the region’s agriculture industry. The collaboration — which includes the Ohio Agricultural Research and Development Center, the Wayne Economic Development Council and the Ashtabula Growth Partnership — hopes to develop more fresh produce, biomass energy, horticulture and other types of specialty agriculture. In addition, a $25,000 grant was issued to help organize the region’s application for a federal planning grant under the Sustainable Communities Initiative being developed by the federal government. The grant would provide as much as $5 million for cooperative regional planning efforts that consider housing, transportation, environmental impact and economic development. “These grants will help Northeast Ohio sustain the progress made throughout the last six years to build new industries, support entrepreneurs and attract growing companies,” said David Abbott, chairman of the Fund. “These grants reflect philanthropy’s strong commitment to strengthening the region’s economic competitiveness.”