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Rizzo

Doing business in Grand Rapids

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If we could change the business climate in Grand Rapids, how would you do it? What things would have to change to make GR a beacon of business relocation? I'm talking about creating a mecca for business world headquarters, regional headquarters, and successful expansion of existing companies. Would it be tax breaks, or would it be a bold plan to eliminate SBTs in Michigan? Would it be The Grand Rapids Promise?

Where would you start?

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The Press story was a nice valentine, but I think it was overstated. The Press should be a booster, but that was a bit over the top.

We need to stop patting ourselves on the back for things like grocery and book stores. Those are nice amenities, but will not crack the skyline. Take away hospitals that must expand into facilities with higher-profit service lines and take away other DeVos/VAA-related projects and things get a little thin. It's great we have those, but -- to credit comments from GRDad and others -- we must find ways to make the City appealing to industry leaders beyond the usual suspects.

Paying for college, addressing the SBT issue and getting rid of the Detroit vs. GR issue would all be quantum leaps forward. Whether we want to admit it or not, we are still viewed as "outstate" in Lansing and other places that have influence on how we can sell ourselves. (See Granholm thread)

At the same time, we need to get better at working with the companies we have to keep them in the City limits instead of letting them leave for the burbs -- when Steelcase pulled its last employees out of the City of GR last year, Mayor Heatwell said he found out just one day before the announcement (!) Can you imagine such a thing happening in Chicago or Detroit?

The City just seems a bit behind and out of touch with business, and that needs to change if we are going to ever land and keep substantial new companies. Maybe we do need a full-time mayor (???)

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There's an interesting article in tomorrow's GRBJ about Heartwell's New Economy Task Force and some of the ideas being discussed. One of them I thought was interesting was providing tax incentives to businesses who RENT space and have very little PROPERTY (high tech companies). Most incentives now go to building OWNERS with heavy capital costs, which tend to favor manufacturers.

Another thought is that the buzzword lately for business relocation is "clusters". Financial clusters, high tech clusters, biotechnology clusters, automotive techology clusters, even call-center and data-processing clusters. Companies like to set up shop very close to other similar companies (even competitors), so that they can tap into the labor pool of that area and do business in an environment condusive to what they do. We have to find some other things that GR is good at and create similar clusters (other than office furniture). Aerospace is one that comes to mind. Smith's and L3 Communications near the airport probably employ over 2000 people, and I think there are several other aerospace companies in the area.

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I hear from a source that the video gaming industry maybe looking at GR because of these 'clusters.'

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201test it is not all about the skyline. It is about developing lasting economic conditions that can support a variety of industry and services. Grand Rapids is one of the most business friendly cities in the nation - hence the large percentage of small businesses and private businesses. We also have one of the most diverse economies in the nation which allows us to better weather economic downturns.

Don't believe me - look at the last recession. While the news was all doom and gloom, the region actually added job and unemployment never reached the State average. Last month it was well below the national average - I don't even want to discuss the State.

Once you have developed this base, you can look upwards. Buildings are not built for the sake of building them. They are built when necessary. Even worse, tall buildings typically indicate service industry jobs - traditionally very low paying - not always a good sign of prosperity or economic strength. I know you will make the argument that industry is leaving but that is simply false. Even with all of the media hype about outsourcing, industry grew at one of the fastest paces ever in America. Does that mean we should focus on it, no. However, we can look to new industries that will offer long term growth options.

I would rather live in a healthy area than look at tall buildings downtown.

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To be clear, I am not looking for growth and tall buildings just for their own sake.

I am looking for some critical mass -- not just a condo here or there -- of major sq-footage projects that do not have some connection to:

DeVos/VanAndel/Secchia/Rockford

BBV

Sam Cummings

Grooters/Granger

Health care

I am not bashing those guys and their achievements. We just have a lot of eggs in these baskets (BBV via Lear). Healthcare and government will always be prominant employers and sources of new projects in any city, but they are not a replacement for organic for-profit business attraction and development. Plust those two sectors usually put tax-exempt buildings on high-quality locations.

I am simply asking for projects that bring in NEW industries and NEW tenants -- not just shift doctor's offices from one part of the City to Michigan St. We need more projects from traditional economic engines such as banking and non-medical professional services. Even if it's just five or six more new projects like the new Mercantile Bank building -- at least its something new.

Our irreconcilable difference, NOVA, seems to be your perception that our market is not capable or ready to sustain robust growth from other sources.

I respectfully disagree. Not sure I have any other ways to say it at this point.

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I hear from a source that the video gaming industry maybe looking at GR because of these 'clusters.'

I strangely had heard (or read that) somewhere Rizzo. MSU now offers a Minor in Video Gaming Design and Development. Another area that we do have a lot of penetration in is logistics (moving and tracking products around the globe). It has become pretty technologically advanced.

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Yes, and from my source, expect somethings in '06 and '07. I would look for startup companies in GR as there is going to be a cluster or high concentration of them soon. And also look for a possible merging of the gaming technologies and the medical industry, there may possibly be some interesting mixes of the two.

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From the GRBJ:

An online gaming mecca

10 October 2005

GRAND RAPIDS - In only its third year in West Michigan, transplant technology firm Norseman Games is looking to carve out a new industry cluster around its battle-tested niche.

"Our vision that we're spearheading within the company and the city of Grand Rapids is to make Grand Rapids a hotbed of online roleplaying game development," said COO Ellington Ellis.

Norseman Games' core product is the online fantasy role-playing game The Realm Online. At 10 years old and in its third version, The Realm is the oldest and largest gaming environment of its kind.

With 12,000 registered users at $4.95 a month, the annual revenue of roughly $712,000 ranks the 10-employee firm as one of the region's highest-grossing Web developers on user fees alone.

When Codemasters began shopping for a buyer in 2003, one of its developers, Grand Rapids native and Grand Valley State University graduate Scott Wochholz, seized the opportunity. The Wochholz family - President Lee Wochholz; Customer Service Manager Lynn Wochholz-Havens; Scott, lead designer; and Brett, community relations manager - acquired the game and began plans to relocate it from Silicon Valley.

Ellis, the Indiana stockbroker in charge of the Wochholz family's assets, was recruited to take over the day-to-day. operations - of the fledgling company. Admittedly, he first suggested operations, remain in California, but could not persuade the family against a West Michigan headquarters.

-- Great to see some loyalty!

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Never seen this arcticle, thanks for sharing.

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The online-gaming industry is something that I never really knew existed much until recently. There is a guy I know who plays these games and gets his "guy" built up real strong and sells them on ebay for over a thousand dollars. Who knew?

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MSU has also started an accreddited class on gaming programming -- makes a ton of sense given the fact that the video game industry generates more revenue than the motion picture industry. Perhaps we could bring the future MSU video game programming school here (!)

-- I hear Logie just loves "Grand Theft Auto". :D

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Yah I hear that. Theres this game my tech teacher would play after class, its called Every Quest something or other. Its a game with thousands of people playing at once, doing business, fighting, talking, its redicilous, its almost reality.

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Very strong Nitro! -- I'm glad I didn't say "Tomb Raider" -- his face on Laura Croft's body would have sent me over the edge.

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One has to be able to look and analyze without bias...which is not easy to do when one has an emotional vested interest in an area. I think your area could benefit from two things, although certainly not limited to these two things. 1. Major research Universities. 2. Major Airport with a lot more non stop services.

Areas like Boston and San Francisco have many prestigious universities which attracted many companies who feed off the research and intellectual pool. However, the cost of living has made these and other concentrations of universities less desirable. Now, cities such as Austin Texas and Raleigh North Carolina are attracting lots of start up companies and small business growth.

A city needs a

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A hook... for some reason I am thinking race relations. Showing the country that we are a community capable of change. Just not doing it for the sake of business, but because it is right. Could a dramatic change in social climate help Grand Rapids is this area?

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I think your area could benefit from two things, although certainly not limited to these two things. 1. Major research Universities. 2. Major Airport with a lot more non stop services.

I think its great to have direct flights to places, but I never understood how that translates to economic growth.

Currently GRR connects directly to 16 airports. http://www.grr.org/Airlines/airlines.html

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A hook... for some reason I am thinking race relations. Showing the country that we are a community capable of change. Just not doing it for the sake of business, but because it is right. Could a dramatic change in social climate help Grand Rapids is this area?

Richard Florida argues tolerance of different people and cultures in gerenal is one of the three most important qualities a region has in creating economic growth. You'd like his books The Rise of the Creative Class and The Flight of the Creative Class if you haven't already read them.

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Yah I may take a look at Flordia's works, I think he recently mentioned Grand Rapids a couple of times. Some folks I knwo that have read his books say he seems elitist.

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Richard Florida argues tolerance of different people and cultures in gerenal is one of the three most important qualities a region has in creating economic growth. You'd like his books The Rise of the Creative Class and The Flight of the Creative Class if you haven't already read them.

Yah, that makes sense to me, though I have not read the books. In my mind, a more tolerant city attracts a bigger mix of folks, who would require a bigger mix businesses. There would be a greater mix of skills, food, clothing. Not to mention the increased interest and advocacy groups. It all makes for a healthier city.

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