Economic Development Blog

Is your Chicago-area corporation seeking more ways to “walk the walk” when it comes to sustainability?  If so, corporate real estate executives and their companies can turn to The Chicago Manufacturing Center (CMC).  The CMC is a not-for-profit management consulting group delivering sustainability-driven solutions to businesses in the six-county Chicagoland region.
The ECO2 Program is designed to help manufacturers in Illinois accomplish four goals:
1. Become more profitable
2. Create job growth
3. Reduce energy use and CO2 emissions
4. Increase recycling and reuse

For example, in 2009, the CMC Waste-to-Profit program:
• Provided $10,728,430 in economic impact to participating companies.
• Created 80 new jobs
• Eliminated 114,711 tons of waste from going to landfills,
• Saved 52,314 tons of carbon dioxide from the air
For more information and sample programs, visit www.cmcusa.org and www.wastetoprofit.com.

For more information contact:
Demetria Giannisis, President and CEO
Chicago Manufacturing Center
312-542-0500
dgiannisis@cmcusa.org

Ontario’s new GIS system now complements legendary incentive programs

By Ray Lancashire, Ontario Ministry of Economic Development and Trade

Hollywood may be the most visible consumer of Ontario, Canada’s legendary economic incentives – but highly competitive packages are available for many other business sectors, particularly those that create jobs. Now it’s even easier to navigate what’s available for your client or corporation – thanks to the province’s new Graphic Information System (GIS) that makes life easy on site selectors, whether you are a corporate real estate end user or a consultant.

At the recent Economic Developers Council of Ontario’s 53^rd Annual Conference, Sandra Pupatello, Ontario Minister of Economic Development and Trade, introduced Select Ontario, the first GIS system offered in a Canadian province.

Select Ontario uses data from more than 500 Ontario communities to assist site selectors and potential investors in locating areas where their investments will flourish. Normally, site selection takes up to eight weeks of scanning hundreds of communities over the internet. However, Select Ontario is an all-encompassing resource that allows investors, corporations and consultants to search through statistics in a much smarter and timelier manner.

Select Ontario offers region-specific wage data, lists of businesses with 10 or more employees, graduation and enrollment levels, satellite imagery and a list of Economic Development Officers.

According to Minister Pupatello, a bit of Select Ontario investigation will show that this province is already “the place to be with respect to its highly educated population, highly skilled workforce, and highly accessible business environment.” Investing wisely is a matter of narrowing down an Ontario community that meets your needs.

by Marty Vanags, CEO, Bloomington-Normal Economic Development Corporation

This post was originally posted by Marty Vanags on his economic development blog, http://martyvanags.com, on Thursday, January 28, 2010.

I am in Flagstaff, Arizona this morning staying in the Hotel Monte Vista. This downtown hotel is a blast from the past. There is nothing fancy about this hotel, but it has a rich history and is extremely charming. We are in the Bob Hope Suite, which the front desk claims once played host to the great entertainer. There is a picture on the door from his younger days. The room looks a lot smaller and much different than the type of rooms I imagine people like Bob Hope would have stayed in. Across the hall we noticed was the R.E.M. Michael Stipe suite.

I discovered by reading a caption under a photo in the lobby that the hotel was built in  the 20s’ and was actually an early Flagstaff economic development project. From the hotel’s website:

“When tourism was on the rise during mid 1920’s local residents agreed that Flagstaff needed first-class accommodations. Existing hotels were old and outmoded. Fundraising began in April of 1926, and within one month investments of prominent citizens and funds donated by the novelist Zane Grey, totaled approximately $200,000. Ground was broken on June 8.”

The residents of the community pooled their money to make the hotel happen. In fact the hotel was first  called the ‘Community Hotel” and later named Monte Vista during a naming contest. Today the hotel seems to house a wide variety of guests. I saw couples, snowboard-dudes, rockers, and punks. Since Flagstaff is a college town (Northern Arizona University), I imagine many of the guests are related to the University.

The residents of the 1920s’ Flagstaff community initiated a process I think is a apt model for economic development today. I meet and work with small towns and rural communities and they are often frustrated at what they can actually do to make their community prosper. They are influenced by what they read  in the media about communities attracting huge employers and changing their world. As many who read what I write I don’t believe in the hollow promise of attraction. For some communities it is a necessary and required part of their overall economic strategy, but it has to start with some “bright spot” in their local environment. A bright spot or a positive is something the community can point to that they already have. It can be the rural life, it could be their proximity to  transportation or it could be some aspect of recent or ancient history that can be the bright spot of their strategy.

Many communities, large and small can do the same thing. Ken Wise the former economic development head in Rochelle, Illinois was a master of finding the local bright spot. He took advantage of what seemingly were disadvantages or new challenges and turned them into success. Whether it was a train spotting platform to provide train buffs a safe and fun place to watch the many trains go by, or building a local power plant to reduce the cost of electricity, or getting local people to invest in property and business out at the new interstate, Ken knew how to do economic development the K.I.S.S. method: Keeping it Simple and Stupid.

I challenge the local economic developer to find the bright spot in your community. All you need is one to work with. Gather whatever resources you have and make it happen.

Happy New Year, CoreNet Global!  Corporate real estate executives, service providers and economic developers alike may be interested in a new development that could help finance some qualifying transactions.  New sources of financing are always welcome in today’s market. 

The U.S. Small Business Administration has extended funding for SBA 7(a) and 504 loan fees and a higher gauranty – up to 90% - through February 28th. If you’re trying to close a deal, the SBA may be the way to go for financing. Here’s the announcement and weblinks:

On December 19, 2009, the President signed the Department of Defense Appropriations Act, 2010 (P. L. 111-118). This legislation provides an additional $125 million to support approximately $4.5 billion in new 7(a) and 504 loans under Sections 501 and 502 of the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”). Specifically, these funds are available for the payment of certain 7(a) and 504 loan fees and a higher SBA guaranty for certain 7(a) loans. (For more detailed information on Sections 501 and 502 of the Recovery Act, see 74 FR 27196 (June 8, 2009) and 74 FR 27199 (June 8, 2009) and SBA Policy Notices 5000-1097, Implementation of Section 501 of the Recovery Act – Fee Elimination Provisions and 5000-1098, Implementation of Section 502 of the Recovery Act – Up to a 90 Percent Guaranty on 7(a) Loans. Both policy notices may be found at http://www.sba.gov/aboutsba/sbaprograms/elending/notices/BANK_FY_09_NOTICES.html.)
This Notice explains how SBA will administer the new funds.

Mr. Chris Manheim, CEcD

CBRE’s state incentives ranking is a solid tool for developers to use to consider state-level economic development incentive programs.  I took a look at the request of Renata Pasmanik, Director of Programs at The Alter Group and a member or our CoreNet Chicago Chapter Board of Directors.  She asked me to comment about CBRE’s recent “EIG State Incentives Ranking” Report.” (The report link is http://cbremarketing.com/ve/ZZc609931t81aL915887T)

As an Certified Economic Developer who has been practicing in Illinois for nearly 30 years, Renata thought I could add some insights. Well, I can and will!

First, click on the link and take a look at the map and state rankings list that’s generated. Illinois, Indiana and Iowa are marked “competitive.” What’s interesting is that CBRE ranks Wisonsin as “noncompetitive.” I find that interesting because many of the border commercial parks near Illinois (e.g., Kenosha) have almost always been able to out-incentive northern Illinois. And my broker colleagues at CBRE, when trying to close a transaction, are quick to point out Wisonsin’s advantages.

Next, look at the “Aggressive” dark green states, which now include Michigan. Most are in the south, but Ohio and the Central Plains states have also moved into the aggressive category. These state economic development programs are traditionally market-focused and easy to do business with. The older rust belt states, with high unemployment, had little choice but to increase their competitiveness in order to just retain jobs.

There’s my opinion. Happy Holidays!

Mr. Chris Manheim

As municipalities scramble to find ways of financing the development or redevelopment of retail and commercial corridors, the State of Illinois designed the Business District Development and Redevelopment Sales Tax back in 2005. (Legal citation is 65 ILCS 5/22-74.3-5). The municipality may impose this tax if it has plans to develop or redevelop an area that may directly benefit from the proposed plan. Examples may be shopping corridors that have been abandoned by major retailers, an older industrial park or a blighted area. The BDD, as it is known, is easier to implement than a Tax Increment Finance District and still generates a substantial amount of revenue. An added advantage: a BDD does not require voter approval. The BDD tax rate may be imposed in 0.25% increments and cannot exceed 1%.

For the commercial developer, a BDD can be an attractive incentive, particularly for redevelopment financing. The major disadvantage is that the sales tax is higher within the district than surrounding areas.

To find out more about BDDs, here are some links to the Illinois Department of Revenue and other websites:

http://www.revenue.state.il.us/LocalGovernment/Overview/HowDisbursed/1002-20.pdf
Statutes: www.ilga.gov/legislation/ilcs
Public Acts: www.ilga.gov/legislation/publicacts
Illinois Department of Commerce and Economic Opportunity (DCEO):
www.illinoisbiz.biz

Chris Manheim

Are rising energy costs returning the worldwide economy to a smattering of local economies?  Perhaps, according to at least one economist. 

At the recent CoreNet Summit in Las Vegas, economist Jeff Rubin, the keynote speaker, made a fascinating case for why our current global economic model no longer works. He sees the paradigm shifting to more locally based economies. Why? energy costs! Continually rising energy costs will eventually make shipping both raw materials and finished goods half-way around the world too costly. China, for example, will serve other asian nations. The fuel costs, though, will force it to limit exporting to the U.S. market. These expenditures will far outweigh any wage differential. LIkewise, energy costs will lead to a renaissance in agricultural requiring localities to grow more food for their own markets. Back in the ’60s as a child, I recall grocery advertising that read “seasonal vegetables.” Those signs may very likely be making a comeback.

Another response to higher energy costs will be the impact upon land use planning. Suburban sprawl will become uneconomic. More land will be needed for agricultural. People and jobs will relocate near each other. Mother nature will eventually reclaim overbuilt land.

As a community economic developer, I find Jeff’s new paradigm a bit simplistic, but his main points are borne out in regional land use planning scenarios across the nation.

For information about Chicago Metro Area 2040 economic and land planning, visit http://www.goto2040.org/.

Chris j Manheim, President
Manheim Solutions.com

Chicago Chapter CoreNet Global Chairman, Economic Development Committee

Stimulus funding - and finding access to it - remains unclear to many corporate real estate-related companies and municipalities.  So I want to point you today to a great ARRA (American Recovery and Reinvestment Act) article by a firm that is a supporter of CoreNet Global.

One of the many financial firms exhibiting at last months CoreNet Global Summit was Ehlers, a public finance consulting firm I have had the privilege to work with over the years. In its Fall 2009 newsletter (available at http://www.ehlers-inc.com/newsletter.php), Ehlers gives a concise and easy to understand description of the American Recovery and Reinvestment Act for Local Governments.

To the commercial real estate professional, this article will provide you with an overview of how these incentives work, particularly The Build America Bonds Program, which is being offered for two years and provides a permanent federal subsidy of 35 percent of the interest expense of qualifying bond issues. These bonds are being used for a wide-variety of public infrastructure improvements: from road projects to school construction bonds. The newsletter also have a good article about the “Return of Development” from the perspective of municipal governments.

For more information, visit www.ehlers-inc.com.

Economic Development Organizations are delivering more value than ever before to corporate real estate executives - as a direct result of training and focus on results.

Managing an EDO (economic development organization) isn’t easy, and, in today’s economy, financing one is even more difficult. Recently, Chris Manheim, President of Manheim Solutions, Inc. and CoreNet Global-Chicago Chapter’s Economic Development Committee Chairman, was an instructor for the International Economic Development Council’s (IEDC) “Managing Economic Development Organizations” in Lousiville, Ky. Chris joined Dr. David Kolzow, President of Team Kolzow, Inc., headquartered in Franklin, TN.

Chris and David first worked together in Chicago back about 1983. At the time, David was working as an management consultant with PHH Fantus and Chris just completed post-graduate studies in Public Policy Analysis at UIC.

One of the training’s main points:  every real estate professional or service provider should be aware of what an Economic Development Organization can do for them. Most of the Chicago Metro counties have an EDO, typically, a public-private partnership. You should consider becoming an investor in these EDOs, your budget permitting. The information and networking will make it more than worth your while.

Here are five things corporate real estate executives should know about how Economic Development Organizations can  assist in accomplishing corporate real estate objectives.

How CREs can use EDOs:

1. Site Information.  Readily available community information on the EDO’s website, including buildings and sites that you may not be aware of.
2. Contacts.  An ‘insider’s’ network of contacts to community officials and leaders.
3. Approvals.  An EDO may be able to ‘fast-track’ municipal approvals for your project, if it produces quality jobs or other bottom-line criteria the EDO is seeking.
4. Financing.  The EDOs typically have revolving loan funds and access to TIF and SSA financing.  (TIF = Tax Increment Financing; SSA = Special Service Area)
5. Government Resources.  The EDO works in partnership with state and federal agencies.

For more information about EDOs, contact Chris Manheim at chris@manheimsolutions.com. Or call 847.691.0008.