We had a really hard time this year narrowing down the worthy candidates for our annual Economic Development Awards. It seems that the best practices which have emerged from forward-thinking locations rapidly are being adopted across the country—a welcome development for everyone. Incentives are being targeted with increased precision, workforce training programs are reaching down into high schools and tailoring tomorrow’s workforce to meet the needs of 21st-century businesses, and innovation hubs are popping up everywhere. We hope you agree that our annual awards are keeping pace. Without further ado, here are the winners of our 2015 Economic Development Awards.
ACHIEVEMENT IN TARGETED INCENTIVES
Today’s state incentives programs are much more than your father’s simple tax credits. Incentives increasingly are being targeted like drones to hit the sweet spot in emerging growth sectors. They’re also being customized to support a wide variety of critical business needs, from workforce training to relocation services and everything in between.
So it’s getting tougher and tougher to narrow down the worthy contenders for our annual Achievement in Targeted Incentives awards. This year, we’ve expanded our showcase to highlight 10 locations with exceptionally effective programs. The winners are:
Arizona Commerce Authority for AZ’s Computer Data Center (CDC) Tax Exemptions. The CDC Program provides tax relief, consisting of exemptions from the transaction privilege tax and use tax at the state, county and local levels, in connection with purchases of qualifying equipment by owners, operators and co-location tenants of computer data centers certified by the AZ Commerce Authority. Exemptions are available on purchases of CDC equipment for up to 20 years for qualifying CDCs. Investment requirements at a new or expanding CDC are $50 million in new investment if the CDC is located in Maricopa or Pima county; or $25 million in new investment if the CDC is located in any other county.
California Governor’s Office of Business and Economic Development (GO-Biz) for the California Compete Tax Credit. The California Competes Tax Credit is a competitive award for businesses that want to expand and add jobs in the state. Over the next five years, GO-Biz will awards over $750 million in targeted tax credits to companies, large and small, that are creating jobs in California. As required by statute, 25 percent of the awards are made to small businesses. So far, GO-Biz has awarded 85 companies approximately $60 million to create a projected 10,000 jobs and generate nearly $3 billion in investment across the state. The California Competes Tax Credit is part of the Governor’s Economic Development Initiative (GEDI) which Gov. Brown signed legislation to enact in 2013 (AB 93 and SB 90). Gov. Brown brought together business leaders, labor interests and legislators from both sides of the aisle to create a more flexible, more competitive set of economic development tools designed to incentivize companies to locate or expand in California. Businesses interested in the California Competes Tax Credit can apply during several open application periods throughout the year. GO-Biz evaluates the most competitive applications based on the factors required by statute, including total jobs created, total investment, average wage, economic impact, strategic importance and more. GO-Biz developed a first of its kind web application for businesses to apply on-line or using their iOS or Android device. The application process is free to all applicants and can be completed in a matter of hours.
Enterprise Florida for FL’s Governor’s Quick Action Closing Fund. The fund is a discretionary grant incentive that can be accessed by Florida’s governor, after consultation with the president of the Senate and the speaker of the House of Representatives, to respond to unique requirements of wealth-creating projects. When Florida is vying for intensely competitive projects, closing funds may be utilized to overcome a distinct, quantifiable disadvantage after other available resources have been exhausted.
Georgia Department of Economic Development for GA’s Port Tax Credit Bonus. The port tax credit bonus rewards new or expanding Georgia companies that increase imports or exports through a Georgia port by at least 10 percent over the previous or base year. To be eligible for the port tax credit bonus, companies must first meet the requirements of either the job tax credit or investment tax credit programs; base-year port traffic must be at least 75 net tons, or five containers, or 10 TEUs (20 foot Equivalent Units). If base year traffic is lower, then these minimums automatically become the base upon which traffic increases are calculated. The port tax credit bonus is calculated as follows when used with GA’s Job Tax Credit: an addition of $1,250 (per job) to the job tax credit, which can be taken for five years to reduce or eliminate the Georgia corporate income tax liability. The port tax credit bonus may offset up to 50 percent of the company’s corporate income tax liability. Unused credits may be carried forward for 10 years, but the increase in port traffic must remain above the qualifying threshold and the company must continue to meet the requirements for either the Job Tax Credit or the Investment Tax Credit.
Indiana Economic Development Corp. for IN’s Headquarters Relocation Tax Credit. When a business relocates its corporate headquarters, divisional headquarters or R&D facility to Indiana, it is entitled to a credit against its state tax liability equal to half of the costs incurred in relocating the headquarters. The company must also have worldwide annual revenue of at least $50 million to qualify and—after relocation—the corporation must have 75 employees in Indiana. The tax credit is applied against income tax liability and may be carried forward nine years.
Mississippi Development Authority for the Mississippi Aerospace Initiative Incentives Program. This is a 10-year income and franchise tax exemption and a sales and use tax exemption for the start-up of a new facility or expansion of an existing facility. It is available for businesses which manufacture or assemble products for use in the aerospace industry, or that provide research and development or training services to the aerospace industry. The business must invest a minimum of $30 million and create at least 100 new, full-time jobs in Mississippi.
New Mexico Economic Development Dept. for NM’s High Wage Jobs Tax Credit. A taxpayer who is an eligible employer may apply for and receive a tax credit for each new high-wage economic-base job. The credit amount equals 10 percent of the wages and benefits paid for each new economic-base job created. Qualified employers can take the credit for four years. The credit may only be claimed for up to one year after the end of the four qualifying periods. The credit can be applied to the state portion of the gross receipts tax, compensating tax and withholding tax. Any excess credit will be refunded to the taxpayer. The credit shall not exceed $12,000 per year, per job. Qualified employers must have made more than 50 percent of its sales to persons outside New Mexico during the most recent 12 months of the employer’s modified combined tax liability reporting periods ending prior to claiming this credit; they should be eligible for NM’s Job Training Incentive Program; and should be growing, with employment greater than the previous year. Qualified employees must be a resident of New Mexico and cannot be a relative of the employer or own more than 50 percent of the company. Qualified jobs must be occupied for at least 48 weeks by the employee and pay at least $28,000/year in a community with a population of less than 40,000 (for jobs created prior to June 30, 2015), or $40,000/year (for jobs created after July 1, 2015).
Pennsylvania Dept. of Community and Economic Development for PA’s Alternative & Clean Energy Program. Administered jointly by the DCED and the Dept. of Environmental Protection, under the direction of the Commonwealth Financing Authority (CFA), this program provides financial assistance in the form of grant and loan funds that will be used by eligible applicants for the utilization, development and construction of alternative and clean energy projects in the Commonwealth. Loans for manufacturers of alternative and/or clean energy generation equipment or components shall not exceed $40,000 for every new job created within three years after approval of the loan. Loans for any alternative energy production or clean energy project shall not exceed $5 million or 50 percent of the total project cost, whichever is less. Grants for manufacturers of alternative and/or clean energy generation equipment or components shall not exceed $10,000 for every job projected to be created by the business within three years after approval of the grant. Grants for any alternative energy production or clean energy project shall not exceed $2 million or 30 percent of the total project cost, whichever is less.
Commerce RI for Rhode Island’s Employer’s Apprenticeship Tax Credit. Employers of registered full-time apprentices in the metal and plastic industries are eligible for an annual corporate tax credit of 50 percent of the actual wages paid to the qualifying apprentice, or $4,800, whichever is less. The number of apprenticeships for which this tax credit is allowed must exceed the average number of apprenticeships begun during the five preceding income years. The following trades are eligible: machinist, toolmaker, model-maker, gage-maker, pattern-maker, plastics process technician, tool and machine setter, die sinker, mold-maker, tool and die maker, and machine tool repair.
West Virginia Economic Development Authority for WV’s Film Industry Investment Act. Up to 31 percent of direct production and post-production expenditures can be converted to transferable tax credits to offset state taxes. Also, purchases and rentals of tangible personal property and purchases of services (excluding gasoline or special fuel, food or beverages) directly used in the activity of manufacturing a motion picture, TV program, music video or commercial are exempt from the consumers sales and service tax, and the use tax.
ACHIEVEMENT IN SITE CERTIFICATION
In today’s highly competitive market for shovel-ready projects, pre-certification of sites for targeted industrial development can provide the winning edge in the site-selection competition. Development-ready certification allows for fast-track construction for major relocation or expansion projects; accelerated due-diligence and fewer unknowns create investment confidence. We’ve chosen two stand-out programs for our Achievement in Site Certification awards:
Alabama Department of Commerce for AL’s AdvantageSite program. AdvantageSite is a voluntary program that allows communities to demonstrate due diligence has been done. This does not imply that other properties in Alabama don’t meet the same criteria; it means designated sites have undergone a vetting process to show important information about a site is readily available. A site awarded AdvantageSite designation has met standards related to ownership, accessibility, infrastructure, planning and zoning, and environmental and geotechnical due diligence. The program’s searchable database currently showcases 31 properties that have met the criteria for AdvantageSite designation, including large parcels like the Coop District of Winston County, which currently has 818 acres available for development.
Wisconsin Economic Development Corp. for the Certified in Wisconsin program. WEDC worked with Deloitte Consulting to create consistent standards for certification of industrial sites with a minimum of 20 contiguous acres. A Certified In Wisconsin site has the key reviews, documentations and assessments most commonly required for industrial uses. Certification criteria have been developed based on representative needs of advanced manufacturing projects. WEDC’s thorough review process produces detailed documentation about a site’s price, availability, utilities, access and environmental standing, allowing investors to make informed decisions. LocateInWisconsin.com is WEDC’s one-stop site selection resource, listing available sites and buildings throughout the state along with demographic information for surrounding communities. Certified Sites are labeled as such and can be searched separately from all other sites listed on the website.
ACHIEVEMENT IN INNOVATION HUBS/ACHIEVEMENT IN ENTREPRENEURSHIP
Moving innovative technologies from the lab to the commercial market quickly is critical for success in today’s emerging high-tech economy. Grass-roots support for innovative new businesses and entrepreneurs also is imperative to plant the seeds for future growth. The states that are ahead of the curve have developed innovation hubs for targeted growth sectors and created an environment that makes their locations fertile ground for emerging businesses. This year, we’re focusing our spotlight on five programs that have exhibited consistent excellence in the development of innovation hubs and three successful initiatives targeting entrepreneurs.
The winners of our Achievement in Innovation Hubs awards are:
Kentucky Cabinet for Economic Development for the Kentucky Innovation Network. KY’s Innovation Network was one of the first state programs to create a network of business leaders and mentors to support new and existing businesses develop and execute successful growth strategies. To date, the program has assisted more than 1,300 companies, helped companies raise $785 million in funding and supported job-creation efforts that have spawned more than 6,500 jobs. The Network is managed in partnership with the Kentucky Cabinet for Economic Development and Kentucky Science and Technology Corporation, along with local partners. Each of the Network’s 13 offices across the state is staffed by experienced and educated business leaders, providing assistance with business development, growth strategies and funding sources. The Network’s syndicated Angel Network brings businesses together with local investors and organizes local Venture Club meetings. Regional Partners include: WKU (Bowling Green); Northern Kentucky EZone (Covington); Von Allmen Center for Entrepreneurship (Lexington); Kentucky Highlands (London); Greater Louisville Inc.’s EnterpriseCorp; Morehead State University; Murray State University; Greater Owensboro; West Kentucky Community & Technical College (Paducah), UPIKE (Pikeville); and Eastern Kentucky University in Richmond.
The Arkansas Economic Development Commission for the Arkansas Regional Innovation Hub. The Hub is a nonprofit organization dedicated to increasing innovative and entrepreneurial activity in AR by creating a collaborative ecosystem that mobilizes the resources, programs and educational opportunities necessary to develop, attract and retain talent and to build the state’s economy. The Hub’s Innovation Center has four components, each of which includes educational and mentoring programming: The Launch Pad, which is a maker space with cutting-edge equipment and technology; The STEAM Lab, a STEM classroom and laboratory; The Silver Mine, a co-working space for entrepreneurs and startup incubation; and The Art Connection, a work program for high school students that develops leadership and innovation through hands-on training in the visual arts industry. An innovator in The STEAM Lab can output a design to a 3-D printer in The Launch Pad as an initial prototype; a local engineer using The Launch Pad to perfect an invention can turn it into a business in The Silver Mine; or an entrepreneur in The Silver Mine can walk into The STEAM Room to find the coding talent needed to bring his or her idea to fruition. Hub partners include Arkansas Manufacturing Solutions; Arkansas Science and Technology Authority; the EAST Initiative; the Arkansas STEM Coalition; Delta Regional Authority; Arkansas Economic Development Commission; Winrock International; and the AR Department of Workforce Services.
Hudson Valley (NY) Economic Development Corp. for the Hudson Valley 3D Printing Initiative (HV3D). Hudson Valley is in the midst of redefining itself as the center for the next manufacturing revolution. HV3D, launched in 2013, brings together a community of 3DP experts, private and public investors, academics and entrepreneurs to unleash the full potential of this technology for the benefit of the entire region. At the heart of this initiative is the State University of New York (SUNY) New Paltz, an established national leader in 3DP technology and education, and the Hudson Valley Advanced Manufacturing Center (HVAMC) at SUNY New Paltz, which brings state-of-the-art 3D printing equipment to the region and a curriculum in Digital Design and Fabrication. HVAMC works with a large array of companies and inventors to develop and fabricate prototypes for next generation products. In 2014, SUNY New Paltz partnered with Brooklyn, NY—based MakerBot, the leading manufacturer of desktop 3D printers, to open the nation’s first MakerBot Innovation Center at SUNY New Paltz. The innovation center is devoted to 3DP technology. The center is enabling rapid prototyping, speeding product design cycles, and creating a forum for increased collaboration and innovation that will help train the next generation of engineers, industrial designers and artists. In September 2014, NY Gov. Andrew Cuomo granted SUNY New Paltz $10 million to create an Engineering Innovation Hub, which will expand the college’s 3D printing lab and create space for START-UP NY companies interested in tapping into the college’s expertise in digital design and fabrication.
Virginia Economic Development Partnership for the Commonwealth Center for Advanced Manufacturing. CCAM has become a leading U.S. R&D hub for advanced manufacturing, with industrial giants including Airbus, Alcoa, Canon, Chromalloy, Rolls-Royce and Siemens on its team of organizing members, as well as Newport News Shipbuilding and NASA’s Langley Research Center. CCAM conducts cutting-edge, industry-supported R&D in six technology focus areas, including surface engineering, manufacturing systems, machining technologies, welding/joining and additive manufacturing.
Maryland Economic Development Corp. for the Maryland Innovation Initiative (MII). MII was created as a partnership between the State of Maryland and five Maryland academic research institutions (Johns Hopkins University, Morgan State University, University of Maryland College Park, University of Maryland Baltimore and University of Maryland Baltimore County). The Innovation Commercialization Program was created to foster the transition of promising technologies having significant commercial potential from qualifying universities, where they were discovered, to the commercial sector, where they can be developed into products and services that meet identified market needs. Faculty from qualifying universities, and other entrepreneurs interested in creating a University Start-up, are eligible for Phase II funding from the program.
The winners of our Achievement in Entrepreneurship awards are:
The Economic Development Authority of Western Nevada (EDAWN) for Startup Row (Reno, NV). Reno, the longtime gambling mecca in northwestern Nevada, is busy reinventing itself as a high-tech hub and magnet for startups. There are 90 members in the Reno Collective, a co-working space for web developers, designers, entrepreneurs and other freelancers; new companies are being formed by the interactions of its members. Some of those new startups are growing out of the Reno Collective and finding office space along First Street, which has been dubbed Startup Row. With 17 new entrepreneurial events occurring regularly that did not exist two years ago, the community has seen a surge in entrepreneurship and new company formation. In addition to the more than 30 companies that now call Startup Row home, there are many throughout the region that are contributing to making northern Nevada known as a location to start or build new companies. The Kauffman Foundation identified Reno-Sparks as having the highest startup density for its MSA class size. The Reno Collective and EDAWN recently recognized four new startup companies located in downtown Reno, all projected to double their employment in the coming year: UsTyme, an app for families to read books and play games virtually using web conferencing. Trainer Road, a software company that uses Bluetooth power meters to monitor and create custom indoor workouts and training programs for the cycling community; Pinocc.io designs and manufacturers wireless micro-controllers for the “Internet of Things”; and Inqiri uses collective intelligence software to help companies improve decision making/problem solving.
The Montana Department of Commerce for Microbusiness Development Corporations. Montana-based businesses with fewer than 10 full-time equivalent employees and gross annual revenues of less than $1 million can apply for a microbusiness loan up to $100,000 by contacting a MicroBusiness Development Corporation (MBDC). MBDCs provide capital to start or expand a business, for training and technical assistance, and to underwrite and service their microloan portfolios. The MicroBusiness Finance Program (MBFP) administers funding for the MBDCs located across Montana.
The Nebraska Business Development Center (NBDC). NBDC provides consulting and educational services to small and mid-sized businesses, including business planning and loan packaging, exporting and marketing strategies, process improvement and sustainability. Technology commercialization services help entrepreneurs bring innovative R&D to commercial fruition. Last year, NBDC helped companies obtain $2.2 million in funding for technology commercialization. NBDC also offers training workshops on project management and other key business skills.
ACHIEVEMENT IN DOWNTOWN REVITALIZATION
This year’s Downtown Revitalization award goes to Greater Oklahoma City. This award recognizes the outstanding success of the OKC’s Metropolitan Area Projects program, a 20-year effort that has transformed the city center with projects including the 20,000-seat Chesapeake Energy Arena; the 15,000-seat Bricktown Ballpark; a new downtown library; construction of the Bricktown Canal; development of a streetcar transit system; development along the North Canadian River; and renovations to the Civic Center Music Hall, the Cox Convention Center and the Oklahoma State Fairground.
ACHIEVEMENT IN FOREIGN TRADE ZONES
We’ve selected two of the busiest and most successful Foreign Trade Zones in the U.S. to receive our Achievement in Foreign Trade Zones awards:
FTZ No. 68 (City of El Paso, TX; El Paso International Airport). The City of El Paso is the Grantee and General Purpose (GP) Operator of Foreign Trade Zone No. 68; it is administered through El Paso International Airport. FTZ No. 68 is strategically located in North America’s third-largest manufacturing region with its sister city of Cd. Juarez, Mexico across the border. Interstate I-10, I-25 connects East and West coasts to Mexico and Canada via the Pan American Highway. Rail service is provided by Union Pacific and Burlington Northern, with intermodal yards and rail spurs in major industrial corridors. El Paso International Airport (EPIA) provides excellent air-cargo service offering 300,000 square feet of cargo space, 35 acres of aircraft parking and two runways: a 12,000-foot ILS equipped runway with dual taxiways, and a 9,000-foot runway. El Paso’s FTZ has over 3,400 acres of designated land in five general-purpose sites representing almost 70 percent of industrial parks in the region. The International Trade Processing Center (ITPC) is the home to the FTZ administrative office. The ITPC serves as the one-stop shop for import/export processing; it also houses U.S. Customs & Border Protection personnel that handles air-cargo, FTZ, bonded warehouse, and in-bond documentation. FTZ No. 68 is an integral part of El Paso’s regional and international investment strategy, providing a business platform for domestic and foreign trade to prosper in the region. FTZ No. 68 is the only GP operator in the nation providing direct FTZ training services; it offers a unique E-214 admission system for its FTZ User customers. El Paso’s FTZ offers ideal options for small and large importers/exporters that need short-term storage for their inventory, or seek a full-service logistics provider.
FTZ No. 38 (Spartanburg County, SC). The establishment of FTZ No. 38 in upstate South Carolina was a key element in BMW’s decision in the early 1990s to put its primary North American auto assembly plant in Spartanburg County. Foreign and domestic goods can be brought into a zone without formal customs entry for assembly, manufacture, display, storage, destruction or other processing. Duty payments are not required until the merchandise leaves the zone for domestic consumption. If exported, no duty payments are made on the merchandise. BMW’s plant in South Carolina has steadily increased its export activity. According to data from the U.S. Department of Commerce, the company has been the largest automotive exporter from the U.S. for several years in a row. The plant in Spartanburg is producing more than 350,000 vehicles per year; it is exporting 70 percent of those vehicles to more than 130 global markets.
ACHIEVEMENT IN RENEWABLE ENERGY
Our Achievement in Renewable Energy award goes to the Iowa Economic Development Authority for MidAmerican’s Wind Power Expansion. Late last year, MidAmerican Energy Co. announced plans to develop one new wind farm site in Adams County and expand a second site in O’Brien County in 2015—an additional investment of up to $280 million for the nation’s leader in ownership of wind-powered generation among rate-regulated utilities. The expansion will result in the installation of up to 67 wind turbines. The project, scheduled for completion by the end of 2015, would add up to 162 megawatts of new wind generation capacity in Iowa. Beginning in 2016, MidAmerican Energy’s wind resources are expected to produce an amount of energy equivalent to approximately 50 percent of the retail energy Iowa customers are expected to need. In May 2013, MidAmerican Energy announced plans to build up to 1,050 megawatts of new wind generation in Iowa, a $1.9-billion investment involving 448 new turbines. The 19-turbine Vienna II wind farm expansion was placed in-service in December 2013. Five more wind project sites were undertaken in Grundy, Madison, Marshall, O’Brien and Webster counties. MidAmerican Energy will have approximately 3,335 megawatts of wind generation capacity in Iowa by the end of this year. The projects will generate enough electricity to power the equivalent of approximately 317,000 average Iowa households.
ACHIEVEMENT IN WORKFORCE TRAINING
Greater Memphis Chamber, Shelby County (TN) and Fayette County (TN) are the winners of our Achievement in Workforce Training award for the Workforce Investment Network (WIN)/Made in Memphis Initiative. The Made in Memphis initiative is a partnership between the Workforce Investment Network (WIN) and the Greater Memphis Chamber of Commerce designed to create a pipeline of skilled workers to meet the needs of local manufacturing companies as they continue to expand and grow. The Made In Memphis team surveyed scores of the area’s manufacturing employers to determine exactly what their employment needs are, and particularly what specific skills they seek in their employees. This data has been communicated to local educational institutions to customize and build training to equip the Memphis-area workforce with skills that directly address manufacturing employers’ hiring needs. WIN is a community resource that prepares job seekers for jobs and helps connect them with employment opportunities in Memphis, Shelby County and Fayette County. The program identifies and pre-screens qualified talent for local businesses, and can provides grants to employers to help defray the cost of training their workforce. WIN contracts with businesses in the public, private non-profit and private sectors to provide On-the-Job Training (OJT) to eligible WIN participants. Depending upon the details of the agreement, businesses may be reimbursed for up to 50 percent of the trainee’s wage during the training period. The Incumbent Worker Training (IWT) program is co-administered by WIN and the Tennessee Department of Labor and Workforce Development (TDOLWD). This program focuses on upgrading the skills of existing full-time employees so that employers can remain competitive and the State of Tennessee can continue to retain viable, progressive businesses.
ACHIEVEMENT IN CLUSTER DEVELOPMENT
South Carolina is rapidly becoming the automotive tire manufacturing capital of North America. This great success story has made the South Carolina Department of Commerce our Cluster Development award winner. Giti Tire, the 10th-largest tire company in the world, is establishing its first North American manufacturing facility in Chester County, SC. Giti joins an unmatched tire-producing cluster in SC that includes industry giants Continental, Bridgestone and Michelin. Giti Tire plans to invest at least $560 million and create 1,700 new jobs over the next decade in order to meet the growing demand of the North American market. Based in Singapore, Giti Tire will produce both passenger and light truck tires in the Chester County plant for Original Equipment Manufacturers (OEM) and replacement markets. The new facility, which will be located on the Carolinas I-77 Mega Site, will combine manufacturing and distribution activities, with total building area estimated to be 1.8 million square feet. During the first phase of production, the plant’s capacity is expected to be five million tires annually. Giti Tire plans to further increase production capacity in response to future market demand and conditions. The Chester County facility represents Giti’s ninth manufacturing plant in its global system. The company recently broke ground and began construction in Chester County. The company’s decision to locate in South Carolina was driven by a number of factors, including the area’s workforce and training opportunities through the technical college system, and proximity to major transportation infrastructure.
ACHIEVEMENT IN WATER RESOURCES
We’ve created a new category of ED awards to recognize development of water resources, an increasingly critical requirement. This year’s winners are the Texas Governor’s Office and the Greater Memphis Chamber of Commerce. Details on their innovative programs will be included in a special Water Resources Industry Focus in BF’s May/June issue.
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