ED Update and Dashboard - April 2016
EDU - Mercy Health
New Alcoa Brand Launched
"Smart Zone" Costing City of Muskegon Money
'SmartZone' aimed at boosting development costing city money instead
MUSKEGON, MI – SmartZones were first promoted nearly 15 years ago as high-tech business development vehicles, but the wheels have come off Muskegon's SmartZone that is costing the city hundreds of thousands of dollars a year as plans for a casino remain stalled.
The Muskegon Lake-front SmartZone was one of 11 unveiled in Michigan in 2001 as designated areas to stimulate the growth of technology-based businesses. Municipalities could "capture" the growth in property taxes from the new development in the zones to pay off bonds that were sold to develop them.
Except in the Muskegon's case, there wasn't enough growth to generate taxes to cover the city's costs.
The city owes nearly $3.2 million in bonds sold to finance construction of an alternative energy center at its SmartZone and has yet to recoup $500,000 it spent on infrastructure improvements. This year, the city has budgeted $250,000 for its bond payments, a line item that could grow to more than $400,000 in coming years, according to Muskegon City Manager Frank Peterson.
The 11 SmartZone lots, comprising 26 acres of the original 34-acre former industrial site, are owned by a group called Muskegon Lakefront LLC. It for years has held out hope of developing a controversial downtown casino on the SmartZone property that was originally referred to as Edison Landing, but now is called Harbor 31.
The city has given Muskegon Lakefront a couple of ultimatums to get things moving on the property, the latest of which are outlined in an agreement reached late last year. That agreement places the $500,000 special assessment for infrastructure improvements on the property's 2015 winter tax bill. It required Muskegon Lakefront to immediately pay nearly $60,000 in past due 2013 taxes and to make $7,500 monthly payments on another $104,500 in unpaid taxes from 2014 and 2015.
Muskegon Lakefront has been supportive of the Grand River Band of Ottawa Indians attempt to develop a casino on the property. But to even get that development going, the Grand River Band needs official tribal recognition from the federal government.
Without any apparent movement toward the casino plans, the city's agreement also requires Muskegon Lakefront LLC to begin "aggressively marketing" the SmartZone property if construction doesn't begin on the 11 lots by March 31.
Muskegon Lakefront has had an agreement "with contingencies" with a management company to develop the property, said Steve Warmington, spokesman for Muskegon Lakefront. He declined to discuss that agreement or the contingencies.
If the contingencies aren't met, Muskegon Lakefront will either develop the property itself or market the property to others, said Warmington, a former Muskegon mayor.
"We would be open to any project that is down there," Warmington said.
The city had tried to get Muskegon Lakefront to either pay the $500,000 special assessment by the end of 2015 or turn the land over to the city. Existing mortgages made the requirement to turn over the property unenforceable, Peterson said. By moving the $500,000 payment onto the winter tax bill, the city will be able to pursue the SmartZone land through tax foreclosure if that tax bill is unpaid, Peterson said. The tax foreclosure process would allow the city to get the land free and clear of any liens or mortgages.
"We want to see it developed for something that it was supposed to be," Peterson said.
SmartZones originally were designed to attract clusters of high-tech businesses and research institutions. Lakefront Development Inc., comprised of attorneys from the Parmenter O'Toole law firm, initially purchased the 34-acre former Continental Motors site and constructed a new Parmenter O'Toole office building there. It unveiled a $50 million development plan that included offices, a marina and residential use that never was realized.
Grand Valley State University agreed to lease the building constructed by the city for its Michigan Alternative & Renewable Energy Center, known as MAREC. A 40-unit $15 million VidaNova condominium project was also planned for the SmartZone, but it was halted with just four units completed.
The most ambitious plan for the SmartZone was a $350 million project by Belmont Farms, the Grand Rapids-area firm that purchased the then-called Edison Landing property from Parmenter O'Toole in 2008. That 10-year development plan included a multi-story hotel, 10-story retail-office building and environmentally-certified exhibition hall, conference center, lodging and retail outlets.
Then the recession hit and none of the ambitious plans came to fruition. In 2011, Muskegon Lakefront LLC took control of the property with hopes for a casino, but also interest in other types of waterfront development, such as hotels, a conference center, condominiums and retail.
Will Corn be Shipped out of the Port of Muskegon?
$30K grant to explore shipping corn from West Michigan port
MUSKEGON, MI – The Corn Marketing Program of Michigan has committed $30,000 for Muskegon County to study how the Port of Muskegon might help as a shipping point for corn farmers.
Corn is Michigan's top grown crop commodity by quantity. Muskegon has the largest natural deep-water port in West Michigan, and leaders are hoping to expand the amount of shipping traffic through the Port.
The grant was awarded following a January meeting of the Corn Marketing Program in Lansing.
Muskegon County Grants Coordinator Connie Maxim-Sparrow said she tried to convince farmers the Port of Muskegon could be used for shipping grains through the Great Lakes, as an alternative to Detroit.
"They said, 'Oh, good,'" Maxim-Sparrow said. "They were pretty excited with the potential." She added the feasibility study could also explore locating a corn processing site at the county's Wastewater treatment site.
Corn Marketing Program of Michigan's Research Coordinator Natalie Rector explained the group's interest.
"In agriculture we realize transportation is very important," Rector said. "We need to get both inputs in and our products out. We're interested in (the port) helping our corn products in the state."
The farmers are also looking to import fertilizer, components for animal feed, and machinery. Other Michigan products might benefit from an improved shipping route, but corn is a good place to start the study, Rector said.
"A lot of our corn or bi-products may need to go nationally or internationally," Rector said.
Civic and business leaders in Muskegon County are working to raise the Port of Muskegon's profile in the shipping industry.
A startup shipping company, called ECO Ships, proposes to start shipping containers on the Great Lakes, with Muskegon being one of its major stops. Officials have said shipping operations could start in short order, as early as 2016.
Long term, planning around the Port of Muskegon is centered around future uses of the B.C. Cobb energy plant and its surrounding property owned by Consumers Energy. The plant received its last shipment of coal in early November and is set to cease operations by April.
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