Work on economic zone continues

ESCANABA – Creation of an economic development zone in the central Upper Peninsula continues as officials from Delta and Marquette counties work together to develop an agreement for participating municipalities.

Escanaba City Manager Jim O’Toole presented an update on the progress of what he calls the “Superior Trade Zone” during the monthly joint governmental meeting held in Escanaba on Wednesday.

Legislation was passed in December 2013 to amend Public Act 275 to include a sixth Next Michigan Development Corporation in Delta and Marquette counties. Five districts exist downstate and are eligible for state funding and tax incentives.

The two counties must apply for the special designation and have the application approved before the resulting corporation can take advantage of tax cuts and state funding aimed to encourage investment, job creation, job retention, and related economic growth.

Specifically, the program focuses on expanding existing businesses and adding new businesses which use two or more modes of transportation to ship products, O’Toole explained during Wednesday’s update. Transportation modes include roads, waterways, railroads and air.

A group of officials from the two-county area met in Flint last month during a meeting with representatives from the five economic development districts downstate, said O’Toole, who was among that group.

O’Toole noted the local officials learned much from the established districts including how they set up their agreements, the roadblocks they faced, and lessons they learned along the way.

For example, said O’Toole, one district’s inter-local agreement allows every municipality to have a say in the decisions but each partner also has the right to veto itself from an issue or project. Equal standing for each participant is important for the district to work, he added.

“Everyone has an equal say at the table,” O’Toole said, adding participants can contribute in whatever way they can for the benefit of the development zone.

“The idea is to start this in Delta and Marquette counties and expand on it to other areas,” he said. A goal is to save time and money on the distribution of supplies and products, he added.

Marquette County Administrator Scott Erbisch also attended the downstate meeting. He said the group walked away with a positive feeling on how the local process has been going so far.

“This can be a real positive effort,” Erbisch commented Wednesday, adding that it will also be a learning process.

“We have to make sure we all communicate as best we can to be successful,” he said, clarifying this includes not only the municipalities but also the businesses.

City, township, county and commerce representatives from both Delta and Marquette counties plan to work together on the inter-local agreement.

An assessment of businesses in the two-county area and the different modes of transportation will also be conducted.

Once these two documents and a zone application are approved by the state, a “branding” campaign – including billboard and radio advertisements – will take place to create awareness of the economic development zone and its benefits, O’Toole said.

Expanding and new businesses looking to set up shop in the zone will be marketed by the economic development partners to seek state approval on tax exemptions. Participating businesses must use at least two modes of transportation in their supply or production chains.

The Michigan Economic Development Corporation (MEDC) oversees the economic development districts, assists with the application process, and offers various economic incentives following the application’s approval.

Incentives for economic growth include creating a Renaissance Zone for tax abatements, improving transportation commerce, establishing a local development financing tax such as tax increment financing also known as TIF, and seeking personal property tax abatements and industrial facilities tax exemptions.

Erbisch said municipalities should not fear losing operational monies from lost taxes because the business expansions and new developments will help the economy in other ways with job growth and people moving into the area.

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Jenny Lancour, (906) 786-2021, ext. 143, jlancour@dailypress.net