Economic Development Blog

This post is a reprint of a post written for the Alter Group Blog.

Corporate real estate executives can look to their economic development partners to help fund projects where traditional sources of financing are falling short thanks to the credit crunch.  Economic development organizations are stepping in to help plug the credit hole.  We all know what the economy is like today, and it is unlikely that the industrial and commercial real estate markets will soon turn around. As an economic developer, I see another side of the economy where both communities and businesses are seeking opportunities and looking at alternatives ways to secure capital.

Aside from the federal stimulus incentives, municipal, state governments and educational institutions offer a variety of incentives…To read this entire post and for specific examples of incentive programs that can be used to fund corporate real estate projects, please see the Alter Group Blog:  http://www.altergroup.com/blog/index.php/general/economic-development-packaging-a-loan-in-todays-market/

As the U.S. economy continues to struggle, we have seen increased activity among bargain-hunting foreign entrepreneurs seizing an opportunity to invest in the United States. The EB-5 program was established in the 1990s to encourage foreign investment and has been a significant driver of this activity. Congress created the EB-5 visa category for the foreign investor seeking to enter the country to engage in a commercial enterprise that will benefit the U.S. economy and create jobs. All EB-5 qualified business opportunities require a capital investment of $1 million unless the investment is in a Targeted Employment Area (TEA) or a Rural Areas, then the capital investment is reduced to $500,000/.
�
For more information, contact Elisabeth Corey, at Foley & Lardner LLP real estate practice at ecorey@foley.com.

Rockford Area Economic Development Council recently attracted a new solar-panel manufacturing plant that will create 200 green-tech jobs. Wanxiang America Corporation plans to break ground this month for its first solar-panel pant in the U.S. in Rockford’s Global TradePark. Phase 1 will be a 40,000 SF buildings and 20 high-tech  green collar jobs per shift on three shifts. Eventually, 160,000 SF will be built employing more than 200.
�
For more information, contact Eric Voyles, RAEDC vice president of national business development at evoyles@rockfordil.com.

Not that I’m trying to be a naysayer in this economy (Economic Developers generally see the sunny side of life), but reality is setting in for developers and communities alike. As a public administration professional who became interested in economic development during the last major recession of 1981 – 1983, I’ve seen a lot and learned even more.

Coffee-clutching with industrial brokers and corporate real estate end users that I’ve known for 10 years or more reveals frustration, but also a persistence to keep moving forward in this economy. The professionals that have been around, particularly those who remember the market downturns in the late 80s, are preparing for the turn-around that will eventually come. The same could be said for some communities that have broadened their economic base over the past decade.

As my Chicago ad-man father used to say, “Even in the Depression, businesses still have to advertise.” The smart communities are doing just that – but in the 21st Century, it’s not just advertising. It’s marketing, and the overall awareness-building and incentive package structuring that is the backbone of today’s economic development sector.

One of my suburban community clients has a beautiful Class ‘A’ business park. It also has some great private partners doing the development. Even though the market is down, we are out there making appointments with brokers, businesses and consultants. People still want information, and want to be aware of opportunities.

Another small community client of mine, farther out along I-90, is focusing on the Health Care cluster and maintaining its industrial base. With other states offering our manufacturers incentives, the competition is tough. As in past downturns, businesses are consolidating facilities to survive in this economy.

One way to support business expansion:  help companies – especially the small-to-moderate sized enterprises that are the backbone of the American economy – find capital.  To reduce the risks on real estate and capital loans, the U.S. Small Business Administration is pushing its SBA 7 (a) and SBA 504 programs. A targeted group is the solvent community lenders that are largely healthy. Here’s the SBA link for more information: http://www.sba.gov/aboutsba/sbaprograms/

So don’t mince words- but get the word out, and tell the great story that your company or community has to tell.