ZONING ORDINANCE - Michigan Association of Planning

Transcription

A New Approach for a New Economy:
Planting Troy’s Economic Garden
October 26, 2011
ZONING
ORDINANCE
Prepared by:
605 S. Main Street, Ste. 1
Ann Arbor, MI 48104
(734) 662-2200
(734) 662-1935 Fax
I
Economic Gardening: Growing Your Own Economy
n today’s uncertain economy, municipalities across the Midwest, especially in Michigan, are challenged
to retain and create jobs within their community. As such, many communities are addressing these
uncertain times with a greater focus on economic development. As Troy is considering a renewed
strategy on economic development, two questions arise 1). What does “economic development”
mean to Troy and; 2). Considering the existing relatively limited resources, how can Troy promote
new economic activity resulting in jobs and an increased tax base in order to create cost effective
economic growth and sustainability?
I. What is Economic Gardening?
The traditional approach to economic development placed a focus on seeking out and attracting the relocation
of large companies. While some communities applying this “hunter and gatherer” approach have had limited
success, this approach has shown significant limitations including 1). expense; 2). the layout of substantial
financial incentives without the sure guarantee of success; 3). the requirement of a significant amount of
time to see a positive return on such investment; 4). inefficiently leveraging a community’s existing assets; 5)
the cost of providing tax abatement and incentives reduces tax revenues. The economic crisis of the past ten
(10) years has shown that a recalibration of the traditional approach to business development is needed.
A more successful method of economic development consists of a “Grass Roots” approach. Appropriately
labeled as “Economic Gardening”, this approach encourages local governments to focus on retaining and
“cultivating” local ‘second stage’ businesses in their community by investing in and promoting existing
community assets and infrastructure. A large company that was not founded in Troy may be able to survive
in Troy for a short period of time, but if the economic climate is not suitable or the foundation for potential
growth is weak or unstable, there is no guarantee
that the company will have a prolonged survival.
The emphasis should instead be on cultivating and
improving the foundation for existing Troy companies
that have already shown growth. These companies
4th
already have firm roots in the community and may
ultimately be the key to stimulating the economy.
Characteristics of Economic Gardening
3rd
The concept of Economic Gardening was pioneered
2nd
in the late 1980’s by the City of Littleton, Colorado.
•
Sales
$750k to $10m
Many communities have configured Economic
• 10-99 employees
Gardening cultivation techniques around three
• Intend to grow
critical themes, which were developed in the Littleton
1st
model: Infrastructure, Connectivity, and Market
Information.
• Infrastructure – building, promoting, and
supporting the development of community
assets essential to commerce and overall quality
of life. Examples include roads, education, cultural amenities, and placemaking.
• Connectivity – improving the interaction and exchange among business owners and critical resources
providers. Examples include industry trade groups, public sector supporters, Chamber of Commerce,
business associations, and academic institutions.
• Information – access to competitive intelligence on markets, customers, and competitors comparable
to the resources historically available only to large firms.
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October 26, 2011
The driving forces behind Economic Gardening are innovating and adapting community assets, efficiently
providing the necessary services and infrastructure, and promoting the most logical choices for business
growth and development. Improving accessibility, convenience, and efficiency in the three main tenets
(Infrastructure, Connectivity, Information), particularly with “Second Stage” businesses can make dramatic
improvements to the community’s viability, sustainability, and economic growth trends. The success of
Economic Gardening methods is entirely dependent on a positive and close relationship between city
government and business owners. Open and consistent communication between the local business community
and local government is necessary in order to fully understand the needs of the business community and
what assets are being provided by the local government.
What it is…
• The public serves (3) major roles: information, infrastructure, and connections, including a strong
foundation of technological assets and resources.
• A focus on growth companies, especially Stage II (10-99 employees).
• The use of sophisticated corporate tools:
- Database searching
- Geographic Information Systems
- Search Engine Optimization
- Web marketing
- Social media and research tools
- Network mapping
• The use of cutting edge scientific theories:
- Complexity science
- Network theory
- Temperament
- Systems thinking
- Core strategy analysis
- Getting things done in the public arena
• A focus on front end, strategic issues of business:
- Market dynamics
- Marketing
- Teams
- Finance
• Driven by innovation rather than the cheapest place to do business.
• Dependent on a highly skilled, elite Economic Gardening staff working in an iterative manner with
business owners.
• An Economic Gardening organization is as entrepreneurial as the companies with which it works.
What it is not…
• Recruiting
• Standard business assistance (keeping books, buying insurance, succession plans)
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October 26, 2011
•
BRE (business retention and expansion)
• After hours networking
• An annual business climate survey
• A financing program
• A buy local program
• A business appreciation dinner
• A “local bucks” program
• Counseling
• Consulting
Economic gardening allows communities to focus on their unique assets and leverage those assets to promote
growth. Economic Gardening succeeds by creating an environment that nurtures entrepreneurs --- in other
words, creating an environment of investment!
II.
Why Apply the Principles of Economic Gardening?
Economic Gardening is an approach that looks
to cultivate entrepreneurial activity which
already exists within the community. The case
for exploring your own economic backyard is
bolstered by growing body of national research
showing small businesses create the vast majority
of new jobs:
Stimulating
• An estimated two-thirds (66%) of net private
sector jobs created in the last twenty-five
(25) years were by small firms (a small firm
is defined as one that employs fewer than
five hundred (500) employees).
• Small firms employ about half (50%) of the
INVESTMENT
Partnering
Creating
Your community’s Investment Environment revolves
around three spheres which you have the ability to
influence
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October 26, 2011
total private sector work force.
• Small firms that employ from one (1) to eighteen (18) employee create the most net new jobs relative to
their share of total employment. (Source: David Birch, MIT).
National research is supported by the Michigan based Edward Lowe Foundation which indicates that
“second stage” companies (between ten (10) and ninety-nine (99) employees) created 137,249 jobs in Michigan
between 1993 and 2007, while companies employing five hundred (500) or more lost 257,585 jobs.
III.
Why is Economic Gardening a Good Strategy for Troy?
Troy has an abundance of assets that were instrumental in the growth it experienced over the past four (4)
decades. As a result, it is home to a number of large financial, health care, automotive and engineering
firms. The City also has a number of second stage companies that could be ripe candidates for growth. The
US Economic Census (2007) reported that Troy had 925 companies in professional, scientific and technical
services employing 16,536 people for an average of 18 employees per establishment. A majority of these
companies would be considered second stage.
Another significant asset is that Troy is home to Automation Alley which is receiving statewide, national and
international recognition for its approach to economic development. Automation Alley is one of the regional
organizations that is being touted by the Governor to provide expanded economic development assistance.
Levering the existing assets of Automation Alley to support and grow the existing 2nd stage companies in
Troy is an example of the application of Economic Gardening principles.
IV.
Action Items
Continuing the relationship between the City and its top-tier employers is strongly recommended. Such
relationships will not be sacrificed should the City pursue the economic gardening strategy. In fact, top
business should been engaged in both advising and nurturing the grass root entrepreneurs and lending
support to the effort.
However, with limited resources, the City is recommended to follow an economic development strategy
focused on businesses that are capable of growth. To accomplish this, the City should spend the next two
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October 26, 2011
(2) – three (3) months developing a Core Strategy. Input in this strategy should be sought from organizations
outside City government including Automation Alley, Oakland County, the Troy Chamber and educational
institutions.
Core Strategy
The Core Strategy needs to address the following key elements:
A. A clear understanding and commitment to meeting the needs of growth oriented companies – no matter
how big or small. Part of the Core Strategy needs to identify those companies that have a desire and
ability to grow;
B. A commitment to a long-term strategy that is represented by economic gardening strategies in order to
create on sustainable economic base;
C. A better understanding of the entrepreneurial climate and the things needed to nurture it;
D. A commitment to collaboration whether it is Oakland County, Automation Alley, the Chamber or any
organization that can help business growth; and
E. Finding champions, preferably outside City government.
Action Steps to Formulate Core Strategy
The following steps to create a Core Strategy, and current status of each step, are as follows:
1. Identify Core Team – Three (3) to five (5) individuals to make up the Core Team. During this period,
we would suggest the Team be coordinated by CWA until an individual is hired as the economic
development (gardening) specialist.
Status: in progress
2. Identify and Map Community Assets – Key assets that would be attractive to business ranging from
education and culture to business resources will be identified and, where appropriate, mapped. In
addition, internal assets of the City need to be identified. See appendix for the detailed Asset Inventory
Report.
Status: completed
3. Identify and Interview Local and Regional Collaborators – Automation Alley has already been
mentioned. Other groups could include Oakland County Planning and Economic Development, Troy
Chamber, Walsh College, and others. The focus of these interviews should be to ask:
• What role should the City play in expanding business and employment in the City?
• How can you help us?
• How can we help you?
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October 26, 2011
Status: in progress
4. Conduct Focus Group Discussion with Potential Stakeholders – The best way for the City to determine
what businesses need to grow is to ask them. A select group of business owners will be identified
and interviewed. Troy’s City Manager has been meeting with key business leaders. However, in
collaboration with other City staff, a more defined and robust focus group discussion process should
be established.
Status: incomplete
5. Create (Acquire) Database of Troy Businesses – Database should be organized both functionally what
they do) and number of employees. We would recommend the County be asked to assist.
Status: incomplete
Richard K. Carlisle, AICP, PCP
Carlisle Wortman Associates, Inc.
Appendix
-Troy Community Asset Inventory Report
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October 26, 2011
Troy Community Asset
Inventory Report
ZONING
ORDINANCE
Prepared by:
605 S. Main Street, Ste. 1
Ann Arbor, MI 48104
(734) 662-2200
(734) 662-1935 Fax
Troy Asset Inventory Report
I. Community Asset Inventory
A. Community Understanding
The City of Troy is located in southern Oakland County - one of the most prosperous counties in the United
States. Troy, 34.3 square miles in area, is approximately 14 miles from downtown Detroit and situated
between the cities of Pontiac and Royal Oak. In close proximity to Rochester Hills, Auburn Hills, Bloomfield
Township, Sterling Heights, and Birmingham, Troy is centrally located within metropolitan Detroit and
within a reasonable distance of several Midwestern and international population and economic hubs:
A.
B.
C.
D.
E
F.
G.
H.
I.
J.
Downtown Detroit, MI (14 miles)
Windsor, ON (20 miles)
Flint, MI (40 miles)
Ann Arbor, MI (45 miles)
Toledo, OH (80 miles)
Lansing, MI (90 miles)
Grand Rapids, MI (150 miles)
Cleveland, OH (150 miles)
Toronto, ON (260 miles)
Chicago, IL (280 miles)
Troy
Figure 1: Troy’s Location (source:GeoBatch.com)
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October 26, 2011
City of Troy Community Profile: 2010 Census
Troy’s demographics of a highly-educated, family-oriented population are highly sought after characteristics
of business expansion and growth.
City of Troy Community Profile: 2010 Census
City Population:
Median Age
Average Household Size
Occupied Household Units
Median Household Value
Educational Attainment (2008)
80,980
41.8
3.14
30,703
$262,400
50% had obtained a bachelor’s degree or higher
B. Business Climate
Troy holds many key advantages to starting a successful Economic Gardening campaign. An Economic
Analysis Report published by the City of Troy in 2008 listed Troy as the 12th largest city in Michigan and the
second-largest city in the state based on total property value1. Troy is home to several Fortune 500 businesses
including Flagstar Bank, Delphi, Meritor, and Kelly Services, all of which are located along one of three worldclass business districts: the Northfield parkway, the Big Beaver corridor, and the Maple Road corridor.
The City of Troy’s top employers include:
• Ameritech International Publishing
• Beaumont Hospital
• Delphi Corp.
• Flagstar Bank
• Kelly Services Inc.
• Bank of America
• City of Troy Government
• Troy School Districts
• U.S. Postal Service
In addition to the aforementioned large employers, the city of Troy has a great growth potential for smaller
‘second stage’ businesses. In 2007, The US Economic Census reported that Troy had 925 companies in the
desired fields of professional, scientific and technical services employing 16,536 people for an average of 18
employees per establishment2. The development and growth of these second stage businesses are essential
to the future economic, residential, and physical design trends of Troy.
Part of the lure for business development is not only the various business incentives offered, such as HiTech Personal Property Tax Abatement Program, Economic Development Corp., Brownfield Redevelopment
Authority and the Downtown Development Authority in the Big Beaver Corridor Area but also Automation
Alley, a world class business development organization that provides services and support to businesses of
1
2
http://troymi.gov/EconomicDevelopment/TroyProfileOaklandCounty.pdf
http://www.census.gov/
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October 26, 2011
all size including businesses thinking about relocating to Michigan.
Automation Alley
Automation Alley is Michigan’s largest technology business association.
Automation Alley aims to increase economic growth in Southeast Michigan
through a collaborative culture that focuses on workforce and business initiatives.
Automation Alley has university partnerships with University of Michigan,
Oakland University, Wayne State University, Walsh College and many more.
Automation Alley directly serves the region which includes the City of Detroit
and the counties of Genesee, Livingston, Macomb, Monroe, Oakland, St. Clair,
Washtenaw and Wayne. Automation Alley combines areas of research including
manufacturing, technology, engineering, production, and marketing to help local
business leaders create new opportunities within the community. The association
also helps small and midsized businesses sell their products throughout the world
and plays a vital role in attracting new businesses to Michigan. Highlights of Automation Alley include3:
• More than 1,000 members across Southeast Michigan.
• Conducted 13 trade missions to countries around the world with a total of more than $153 million
raised.
• Invested over $6 million in seed fund investments to 29 start-up technology companies in Southeast
Michigan
• An alliance of five member-driven committees that assist the association in executing programming
and services.
• An annual attendance of 10,000 people at scheduled seminars and meetings.
• Proud recipient of the Presidential “E” Award for Exporting, the nation’s highest award to honor
exporters
• More than 300 media articles featuring or mentioning the association in 2009
City of Troy Downtown Development Authority (TDDA)
The Troy Downtown Development Authority (TDDA) engages in long-range planning for the ‘downtown’
area. Traditional responsibilities held by the DDA include land acquisition and improvement, building
construction, and public facilities improvement.
3
http://www.automationalley.com/
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C. Transportation
Access to the movement of goods and people is a key componet of business development. A vibrant transportation
system provides an important foundation from which to attract new business and make Troy an attractive place
to live and work.
Non-Automobile Transit
While there over 364 miles of road that handle over 400,000 cars per day, the City of Troy has started to maximize
non-automobile connectivity through the existing 500 miles of sidewalks and future pathways to emphasize
alternative transportation and non-motorized vehicle usage.
SMART Bus System
Oakland County has been served by the SMART Bus System since 1967. SMART is southeast Michigan’s only
regional public transportation provider, offering convenient, reliable and safe transportation. SMART’s “fixed
route” and “small bus services” have provide alternative transportation opportunities for its riders to connect
them to employment, educational, and entertainment centers. SMART is supported by federal and state funding,
local contributions and bus fares.
Figure 2: SMART Bus System Map serving Troy and Surronding Community (source: SMART)
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October 26, 2011
SMART is on the forefront of job creation, safety, environmental stewardship, and practicality4:
•
•
•
•
•
•
SMART bus routes provide access to more than 75,000 businesses and 1.3 million jobs.
Approximately 2.5 million people live within a ¼ mile radius of a SMART bus route.
New SMART drivers receive nearly 250 hours of training including 200 hours of on-the-road training.
SMART buses receive preventative maintenance every 3,000 miles.
One SMART bus potentially eliminates 60 cars on the road.
Public transportation produces 95% less volatile carbon monoxide and about 50% as much carbon dioxide
and nitrogen oxide per passenger per mile.
• SMART recycles 600 tires, 600 gallons of anti-freeze and 28,890 gallons of oil annually.
• All SMART buses are biodiesel powered.
Detroit Metro Airport (DTW)
Located less than 45 minutes from Troy, the
Detroit Metropolitan Airport (DTW) serves
over 36 million passengers a year making it
the twelfth busiest airport of its kind in the
United States and the twentieth busiest in the
world. DTW is the largest international hub
for Delta Airlines (5th largest airline carrier
in the United States), and 2nd largest hub for
Spirit Airlines. DTW’s 15 passenger airlines,
including 6 foreign flag airlines, serve 160
nonstop flight locations throughout the
world5. According to a study by University
of Michigan – Dearborn, DTW helped put
more than 7.6 billion dollars into the U.S.
economy in 2005. DTW employs over 18,000
employees, and indirectly relates to an
additional 70,000 jobs throughout the state
of Michigan6.
Figure 4: Metro Airport Location Map
(Source: metroairport.com)
Oakland/Troy Airport
Located in Troy, the Oakland/Troy Airport serves as the County’s ‘executive’ airport. The airport’s convenient
location in east central Oakland County greatly benefits both business travelers and tourists using private,
corporate and charter aircraft.
4
5
6
Smartbus.org
http://www.metroairport.com/
http://www.metroairport.com/pdf/DTW_Economic_Impact_Report.pdf
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October 26, 2011
Oakland County International Airport (OCIA)
Located less than 30 minutes from Troy, the Oakland County International Airport (OCIA) serves Oakland
County along with rest of Southeast Michigan. Designated as a “general aviation” airport, OCIA is the twelfth
busiest airport of its kind in the world. OCIA serves 120,000 takeoffs and landings per year on average. Over 800
aircraft are housed at OCIA, and more than 150 corporations use OCIA as their base airport. In addition, OCIA
contributes over $150 million to the county’s economy each year7.
Coleman A. Young International Airport
Located in Detroit, the Coleman A. Young International Airport is located less than 30 minutes from Troy. Opened
in 1927, the airport first served as Detroit’s only air carrier facility, and provided Detroiters with an opportunity
to travel to cities throughout the North America. The airport is an international port of entry, and U.S. Customs/
Immigration provides services to arriving flights requiring customs clearance. In total, the Airport encompasses
263 acres with two runways and associated taxiway systems and is operational 24 hours a day, 365 days a year.
The airport houses 175 planes on base8.
Bishop International Airport
Located 45 minutes from Troy in Flint, the Bishop International Airport is the the third busiest airport in Michigan,
In 2008, 1,050,813 passengers flew through Bishop Airport9. There are currently five commercial airlines flying
in and out daily. In addition to commercial and private airline operations, Flint’s Bishop International Airport
is significant in the air cargo industry due to access two major interstates, one U.S. highway, and numerous rail
lines. A cargo hub is in development at Bishop Airport that is predicted to become a major benefit to the Flintarea economy.
Troy Multi-Modal Transit Center (expected completion 2012)
Expected to break ground next year, the Troy Multi-Modal Transit center will serve as a multi-modal transit
center. Located near the intersection of Coolidge Highway and Maple Road the center would coordinate all
existing transit options in the region, including Amtrak train service, SMART bus service, connections to local
corporate and international airports, taxi, and black sedan service. The transit center is also planned as a regional
transportation hub in the Detroit Regional Mass Transit plan currently being developed, and thus an additional
level of bus service will be added directly linking this transit center with other transit hubs across the region.
7
8
9
http://www.oakgov.com/aviation/
www.detroitmi.govwww.detroitmi.gov/airport/
www.bishopairport.org
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October 26, 2011
D. Cultural and Recreational Assets
Troy offers a number of assets that help to promote the city’s image as a well-cultured, innovative, and active
community. These cultural and economic assets play a vital role in maintaining the City of Troy’s appeal as a
great place to live, work, and play.
Troy Public Library
When the Troy Public Library officially opened in 1971 at 510 W. Big Beaver Road, librarian Marguerite Hart
wrote to dozens of prominent actors, politicians, authors and artists asking them to write a letter to the children
of Troy about the importance of books and libraries. In total, Hart received 97 responses, including the likes
of Ronald Reagan, Pat Nixon, Neil Armstrong, and Dr. Seuss, all of which can be displayed on the Library’s
website, www.troylibrary.info. Today, the Troy Library has expanded to 40,000 square feet, serves 56,000 patrons
and contains over 320,000 items.
Troy Museum and Historic Village
The Troy Museum and Historic Village “preserves and interprets the history and heritage of Troy and the region
for its diverse community and provides a unique setting for life-long learning.” The museum consists of ten
historic buildings and a village green, as well as a collection of nineteenth and early twentieth century artifacts.
Park System
One of the most important physical assets of the City of Troy is its parkland. The City of Troy has twenty parks
and recreational facilities consisting of more than 880 acres. Additionally, twelve new parks are proposed in
the City’s Park and Recreation Plan. Parks and recreational facilities are generally located in close proximity to
single-family housing. Troy parks can be divided into three categories (Neighborhood Park, Community Park,
and Special Use Facility), and vary in sizes and purposes.
Neighborhood parks are the basic unit in a typical park system and serve as social gathering places and focal
points for residential areas and are located a quarter mile to a half mile from residential areas. These types of
parkland aim to promote walkability in residential neighborhoods are not typically segmented by non-residential
roads. The City of Troy has eight neighborhood parks. The largest of the neighborhood parks is “Sylvan Glen
Lake Park.” Located on Rochester Road, between Square Lake Road and Long Lake Road, Sylvan Glen Lake
Neighborhood Parks
Acres
Recreational Opportunities
Beach Road Park
Beaver Trail Park
10
7
Brinston Park
18
North Glen Park
Redwood Park
10
3
Schroeder Park
Sylvan Glen Lake Park
12
40
Play Equipment, Ball Diamonds, Soccer Fields
Play Equipment, Asphalt Walking Trails, Picnic Area, Unpaved
Nature Trails
Tennis Courts, Basketball Courts, Play Equipment, Ball Diamonds,
Soccer Fields, Picnic Areas, Pavilion
N/A
Basketball Courts, Play Equipment, Ball Diamonds, Picnic Areas,
Pavilion
Asphalt Walking Trails, Soccer Fields
Asphalt Walking Trails, Soccer Fields, Picnic Areas, Unpaved
Nature Trails, Natural Water Features
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October 26, 2011
Park features a 16 acre lake, a ten-acre wooded area completed with nature trails, and picnic tables.
Community parks are intended to serve the broader population of the community. Community parks are
typically larger and offer more recreational opportunities. Firefighter Park is the largest of community parks and
offers nine recreational facilities including sand volleyball courts, picnic areas, an 18-hole disc golf course, and
a small lake. While, swimming and boating are prohibited on the lake, shore fishing is allowed. The location of
community parks are generally decided on a suitability basis. The City of Troy has six community parks:
Community Parks
Acres
Boulan Park
53
Firefighters Park
96
Flynn Park
Huber Park
Jaycee Park
25
20
45
Raintree Park
41
Tennis Courts, Play Equipment, Asphalt Walking Trails, Ball
Diamonds, Soccer Fields, Sand Volleyball Courts, Flag Football /
Lacrosse Fields, Picnic Area, Pavilion, Concession Area
Play Equipment, Ball Diamonds, Soccer Fields, Sand Volleyball
Courts, Flag Football / Lacrosse Fields, 18-hole Disc Golf, Picnic
Area, Natural Water Features, Pavilion, Concession Area
Play Equipment, Ball Diamonds, Concession Stands
Tennis Courts, Picnic Areas, Unpaved Nature Trails
Play Equipment, Ball Diamond, Soccer Fields, Sand Volleyball
Courts, Pavilion
Play Equipment, Ball Diamond, Soccer Fields, Sand Volleyball
Courts, Disc Golf, Picnic Area, Pavilion
Special Use Facilities are recreational facilities oriented more towards special uses like community centers, golf,
swimming pool facilities, beaches, skate parks, and other specific types of recreational-oriented activities.
Special Use Facility
Acres
Stage Nature Center / Troy Farm
100
Sylvan Glen Golf Course
143
Sanctuary Lake Golf Course
200
Troy Family Aquatic Center
4
Troy Community Center
35
Picnic Area, Unpaved Nature Trail, Natural Water
Features
Natural Water Feature, Concession Areas, Rest Rooms,
Drinking Water, 18-Hole Golf Course
Natural Water Feature, Concession Areas, 18-Hole Golf
Course
Play Equipment, Sand Volleyball Courts, Concession
Areas, Swimming Pools, Skate Parks, Shuffleboard Courts,
Bocce Ball Courts
Basketball Courts, Play Equipment, Asphalt Walking
Trails, Ball Diamonds, Soccer Fields, Concession Areas,
Restrooms, Swimming Pool, Gymnasium, Drinking Water,
Skate Park
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October 26, 2011
Stage Nature Center / Troy Farm
The Stage Nature Center offers indoor and outdoor nature related education programs. The Stage Nature Center
includes the main Nature Center facility, which includes approximately two miles of nature trails, a handicap
accessible paved trail, a pond, picnic areas, and a large wooded area. In addition, the Troy Farm, a historic
farm is located in the northern portion of the Stage Nature Center, and features a 1898 farmhouse and two barns
which were constructed between 1826 and 1830.
Sylvan Glen / Sanctuary Lake Golf Courses
The City of Troy has two 18-hole municipal golf courses; Sylvan Glen and Sanctuary Lake. Sylvan Glen is a
popular venue, accommodating more than 55,000 rounds of golf played each year. The addition of three new tee
boxes has added length to the course, and new wetland areas add to the difficulty and challenge of the course.
Sanctuary Lake Golf Course is a “links-style” championship course, which provides many challenging obstacles
for golfers of all skill levels. Sanctuary Lake and Sylvan Glen offer winter recreational opportunities including
cross-country skiing and sledding.
The Troy Family Aquatic Center is an outdoor water park which is open from Memorial Day weekend to Labor
Day. The Aquatic Center includes a main pool with zero-depth entry, three water slides, two spray pools, waterfall,
two sand volleyball courts, and play equipment area and concession stands. The Family Aquatic Center hires
over 80 employees for the summer service hours.
Troy Community Center
In 1994, the City purchased the former Troy High School Building, for use as a community center. Starting in
1999, a $12.5 million renovation was started. The renovation was completed in two phases:
• Phase 1 - included a two court gymnasium, indoor aquatic center with lap lanes, play structures, and
therapy pool, fitness room, four dance/aerobic studios and locker rooms; and
• Phase 2 - included banquet/meeting rooms, senior computer lab, outdoor playground, pre-school rooms
and administrative offices for the Parks and Recreation Department, teen room, senior reading room,
arts and crafts room, and circuit training room.
Troy Sports Center
The Troy Sports Center is “Michigan’s premier ice skating facility”. Located at 1819 Big Beaver Rd., the Sports
Center has four ice surfaces utilized by community skating programs, youth hockey and travel organizations,
figure-skating programs, and local high schools. Also located within the Troy Sports Complex are various sports
medicine clinics; Buffalo Wild Wings, Joe Kools, and other restuarants; and retail including Krogers, Verizon,
Walgreens, and Chase Bank.
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Regional Recreational Opportunities
The City of Troy’s central location in southeast Michigan allows city residents to enjoy many county and state
recreational parks and facilities. While located in Oakland County, Troy’s location on the border of Macomb
County should be noted when discussing regional recreational opportunities. Currently there are eight State
Parks located in Oakland and Macomb counties. Macomb County has one county park and Oakland County has
eleven all within close proximity to the City of Troy.
The City of Troy is also served by the Huron-Clinton Metropolitan Authority Park System – a system of thirteen
large parklands in Wayne, Oakland, Macomb, Washtenaw, and Livingston Counties. The Metropark System
occupies a total of 24,000 acres and serves over 9 million visitors annually. Five of the Metroparks are easily
accessible from Troy: three in Macomb County (Wolcott Mill, Metro Beach, and Stony Creek) and two in Oakland
County (Kensington and Indian Springs).
Figure 5: Regional Park Map
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October 26, 2011
The Somerset Collection and the Oakland Mall
The Somerset Collection is a 1.44-million-square-foot super-regional upscale shopping mall located on Big
Beaver Road. The mall features over 180 stores and restaurants, including Nordstrom, Macy’s, Neiman Marcus,
and Saks Fifth Avenue. The Collection consists of two separate buildings (Somerset North and Somerset South)
connected by a distinctive 700-ft long skywalk that spans over Big Beaver Road. As mentioned by Fodors.com,
the Somerset Collection is often considered to be, “one of the top shopping malls in the country”.
The Oakland Mall, located at the corner of 14 mile Road and John R. Road, features over 120 stores and restaurants.
Anchored by J.C Penney, Macy’s and Sears, the mall includes a large food court and several other big box stores
nearby.
The Ridgedale Players
The Ridgedale Players have been performing for 79 seasons, making them one of the oldest community theaters
in the state. Located at 205 W. Long Lake Road, the Players typically produce about four shows per year, as well
as three Youth Actors of Ridgedale productions.
American-Polish Cultural Center
Located at 2975 Maple Road, the American-Polish Cultural Center is utilized for membership activities, as well
as ballroom and Polish folk dancing, and summer socials. Also located within the Cultural Center is a banquet
facility that can be used for weddings, showers, graduations and other parties. Located in the Cultural Center is
the Wawel Restaurant, which offers delicious Polish cuisine.
E. Education
Quality education is an important and prominent asset of Troy. The Troy School District provides a challenging
K-12 program that enables and motivates students to prepare for future success, whether in higher education
or the work force. Consisting of 12 elementary schools, 4 middle schools, and 3 high schools, the District serves
more than 12,000 students. The Troy School District is constantly one of the highest ranked districts in the state
and the country.
Troy School District Awards and Recognitions10:
• Troy is one of only four school districts in Metropolitan Detroit to receive an “A+” rating from the Detroit
News, following a comprehensive analysis of school quality factors.
• Athens and Troy High schools and the east campus of the International Academy were named among
the top five percent of all U.S. high schools by U.S. News and World Report.
• Troy has been selected as a “top district” by School Match, a national education consulting and research
firm.
• The Troy School District is among a handful of districts where every school has earned an “A” from the
State of Michigan’s EducationYES! Program.
• All Troy District K-12 schools have earned the prestigious Blue Ribbon award from the Michigan
Department of Education.
• The Troy School District has an overall dropout rate of less than one percent.
• The Troy School District has been awarded a Gold Star Status from Expansion Management magazine,
placing it among the top 16 percent of school districts across the district.
10
http://www.troy.k12.mi.us/
12| Page
October 26, 2011
Other school systems that serve the City of Troy:
In addition to the Troy School District, the City is served by 6 other school systems and 5 private schools.
School Districts:
•
•
•
•
•
•
Avondale School District
Birmingham School District
Bloomfield Hills School District
Lamphere School District
Royal Oak School District
Warren Consolidated School District
Private schools that serve the troy:
•
•
•
•
•
Bethany Christian K-12
Brookfield Academy Pre-5
Christian Leadership Academy
Renaissance Montessori Center
Troy Adventist Academy
University / Technical schools located in Troy
Troy also offers many higher education opportunities for adults looking to either earn their first degree, or
take classes to sharpen their skill set and seek career advancement opportunities. Currently, 13 universities or
technical schools have campuses within the city of Troy.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Baker College
Central Michigan University
Cornerstone University
International Academy
ITT Tech
Michigan State University – Management Education Center
International Academy of Design and Technology
The Art Institute of Troy
Northwood University
Oakland Community College
Oakland University
Rochester College
Spring Arbor University
University of Phoenix
Walsh College
13 | Page
October 26, 2011
F. Green Incentives
The physical design aspect of Troy is very crucial to the health and wellbeing of its business community. Residents
and workers alike desire attractive and safe communities in which to live and work. While Troy’s physical layout
is not atypical from those of other Metropolitan Detroit communities, the City has taken measures to distinguish
itself by providing high quality parklands, and showing a commitment to smart-growth through a recently
updated master plan, zoning ordinance, and design guidelines. With Troy’s relatively high number of LEED
certified buildings, green facilities, high quality parklands, and environmental protection, the City has been
innovative towards environmental stewardship.
Land Use Design Guidelines (Zoning Ordinance)
This past April, the City of Troy adopted a new Zoning Ordinance. The Zoning Ordinance provides rules and
regulations for development based on the goals and objectives outlined in the Master Plan. The Ordinance has
two main design guideline sections: Sustainable Development Option (article 12) and Site Design Standards
(article 13).
The Sustainable Development Option promote environmentally sustainable, energy efficient design and use
industry best practices for the construction of new or rehabilitation of existing buildings and sites within the
City, while simultaneously remaining consistent with the goals and objectives found in the Master Plan. The City
of Troy offers incentives to developers and city residents with the intent to:
•
•
•
•
Encourage the reuse of existing buildings and redevelopment of existing sites;
Conserve natural resources;
Reduce the use of energy in both construction and daily operations; and
Foster a mix of uses to promote pedestrian, bicycle, and public transit options.
The Sustainable Design Option also provides storm water best management practices, building and construction
on a flood plain, wind energy conversion systems, solar energy facilities and easements, and environmental
performance standards.
The Site Design Standards intends to improve the site design and visual appearance of buildings with the
ultimate goal of bettering public health, safety, and welfare. The Site Design Standards establish regulations on
site components such as landscaping, lighting, parking, loading, and site access.
Big Beaver Design Guidelines
The Big Beaver Design Guidelines were adopted in 2010 as a supplement to the Zoning Ordinance in order to
develop a form-based code for the Corridor. The Big Beaver Design Guidelines act as a less formal extension of
the Site Design Standards found in the Zoning Ordinance and provide a more user friendly and streamlined
approach to the site design process, providing examples and imagery to aid the prescribed language.
Troy Chamber of Commerce Green Business Initiative (GBI)
The mission of the Troy Chamber of Commerce’s Green Business Initiative (GBI) is to promote the interests of
businesses that are committed and engaged in environmentally responsible operations and practices. These
environmentally friendly practices include energy efficiency, green purchasing, recycling, waste material
reduction & prevention, low impact development planning, and water conservation.
14| Page
October 26, 2011
Local Green Facilities
• Cedar Pines: “Green-Built” Subdivision: Environmentally friendly features include a rainwater harvesting
system, compact fluorescent light bulbs, carpet made from recycled bottles, Nu-Wool insulation made
from recycled newspapers, and wood trim from sustainable plantations.
• Kresge Foundation Headquarters: The U.S. Green Building Council awarded the Kresge Foundation
headquarters a Platinum-level ranking, the highest attainable level in the Leadership in Energy and
Environmental Design (LEED).
• Bank of America Corporate Office: First building in Michigan certified under LEED EB (Existing Building)
certification.
• Walsh College: The Barry Center, a 37,000-square-foot LEED certified classroom building, gets most of its
power from renewable resources, captures and filters its water, and converts waste heat into electricity.
• Doshi Group: The Doshi Group maximizes energy efficiency by incorporating task-design lighting
levels, energy efficient lighting fixtures and features such as occupancy sensor-controlled lighting.
G.
Healthcare
Residents of Troy of have access to two highly regarded medical centers in their municipal boundaries - Beaumont
Hospital and Henry Ford Health Medical Center. Both serve southeastern Michigan by providing world-class
care to their patients.
Troy Beaumont Hospital
Beaumont Hospital was recently ranked one of the top 100 hospitals in the United States for the seventh time by
Solucient11. In 2007, Beaumont Hospital broke ground on a project to expand the hospitals range of service and
improve the quality of healthcare by constructing a new seven-story critical care tower and expanded emergency
room facility. The project includes 235,670 square feet of new construction and more than 100,000 square feet of
renovations to the obstetrics, radiology, pharmacy and security departments. In addition, Beaumont Hospital
entered into a partnership to create a new medical school on Oakland University’s campus.
Henry Ford Health Care System
Henry Ford Hospital / Health Care System is known throughout Michigan for providing high quality services
to their patients. There is a Henry Ford Medical Center located in the City of Troy at 2825 Livernois, Road south
of Big Beaver Road. Services include: dermatology, family practice, neurology, eye care, pediatrics and internal
medicine.
1
http://www.100tophospitals.com/top-national-hospitals/
15 | Page
October 26, 2011
H.
Public Safety
Police
The Troy Police Department is a full service agency, serving a population of approximately 83,000 residents
covering 34.3 square miles. In 2010, Troy was recognized as one of the safest cities in the United States by CQ
Press12. CQ Press uses six crime categories to establish criteria for the study, and targeted cities a population of
at least 75,000. The crime categories included: murder, rape, robbery, aggravated assault, burglary and motor
vehicle theft. The rankings in the CQ report are based upon data reported to the FBI for 2009. According to the
CQ report, Troy has the lowest crime rate ranking in Michigan for cities with a population between 75,000 and
99,999. Nationwide, for cities with a population between 75,000 and 99,999, Troy is ranked 10th safest overall.
Fire
The Troy Fire Department is composed primarily of volunteer members with a career staff comprising 6% of
the department. The career staff members provide required training; public education; plan review; inspection
and code enforcement; permitting; equipment acquisition and maintenance; hazardous material reporting; and
emergency management planning to support the department and comply with both state and local mandates.
Overall, the combination of volunteer and career firefighters saves the citizens of Troy $10-$12 million annually,
as compared to neighboring communities of similar size and demographics13.
II. Moving Forward
12
13
http://os.cqpress.com/citycrime/2010/City_crime_rate_2010-2011_hightolow.pdf
http://troymi.gov/fire/
16| Page
October 26, 2011
According to an article by CWA which was featured in Michigan Township News, the requirements to cultivate
the workforce of the 21st century include:
• Ranging of Housing Opportunities
• Walkable neighborhoods and open spaces
• Physical sense of place and place making
• Mix of land uses
• Open space, recreation and farmland preservation
• Alternative forms of transportation
• Compact urban form
• Access to technology
The criteria listed above are consistent with the Smart Growth principals which aim to promote goals such
as environmental stewardship, public health and safety, and smart land use decisions. In 2007, The City of
Troy completed the Smart Growth Readiness Assessment Tool (SGRAT), an assessments for scoring how well
a community is prepared to develop according to Smart Growth principles. SGRAT provides a set of online
assessments for scoring how well a community is prepared to develop according to the Smart Growth principles.
Based on a 0-100% range, it is designed to provide communities with a baseline score, and can be used to measure
progress. The higher the score, the better the community adheres to the particular smart growth tenant.
Smart Growth Tenants Results on SGRAT
Compact building design
Create a range of housing options
Create walkable neighborhoods
Encourage community and stakeholder collaboration
Foster distinct attractive communities
Make development decisions predictable and fair
Mix land uses
Preserve open spaces, natural resources, farmland, and critical environmental areas
Provide a variety of transportation choices
Strengthen and direct development towards existing communities
38%
20%
49%
40%
32%
74%
30%
26%
33%
37%
Maximizing these Smart Growth principals will assist in the retention and growth of Troy businesses.
17 | Page
October 26, 2011
A
HERITAGE
OF
INNOVATION
More than 100 years of engineering innovation
and technological breakthroughs stand behind the
development of Meritor’s industry-leading drivetrain,
mobility, braking and aftermarket solutions.
Our name has changed.
Our heritage of innovation remains.
meritor.com
Contents
4 Facts at a Glance
6 Overview
Welcome
TROY
On behalf of the City of Troy, welcome to our community — Michigan’s premiere
address for business, retail and commerce.
Troy is a place where families and businesses thrive. Our community is recognized
8 Economic Development
for its excellent quality of life, including being the “Safest City in Michigan,” offering
9 Economic Development
Partners
providing outstanding City services. As one of Detroit’s northern suburbs, Troy is home
11 Transportation
12 Lifestyles
14 Health Care &
Public Safety
an A+ rated school system, having one of the lowest tax rates in Oakland County, and
to 6,000 flourishing businesses — including some of the most advanced technology
companies in the world — that employ 125,000 people.
Troy’s unique location in the heart of Oakland County, only 20 minutes from
Detroit with access to I-75, I-696 and M-59, offers residents and businesses a
tremendous competitive advantage, including attractive neighborhoods, excellent
schools, prime shopping and employment opportunities. Our strategic location puts
residents, employees and visitors within easy reach of a wide variety of recreational
and cultural opportunities. Troy has a total area of 34.3 square miles, with over
900 acres of parklands, two golf courses and a variety of lakes and streams.
Troy is a prime location for new and expanding businesses. Home to seven
million square feet of retail space, 21 million square feet of office and engineering
space and 16 million square feet of manufacturing space, Troy’s business environment
is progressive and diverse with a mix of major corporations and small local
businesses. Located in the heart of Automation Alley, southeast Michigan’s worldrenowned technology cluster, Troy is at the center of global automotive technology
Troy, Michigan
An Economic Resource Guide
Sponsored by
The City of Troy
and manufacturing and a major contributor to Michigan’s ranking as one of the
largest high-tech workforce employers in the country.
Combine the City’s abundant job opportunities with an excellent quality of life
and it comes as no surprise that Troy offers one of the state’s friendliest business
environments. With our forward thinking Master Plan, new and flexible Zoning
Ordinance and customer-driven Building Department, Troy provides development
processes that are fast, fair and predictable. Those interested in relocating or
expanding their business in Troy can expect to receive a warm welcome from the
Produced and Published by
American Images Publishing
1-800-807-6555
www.americanimages.org
Publisher David J. Wayman
Writer Ann-Margaret Lambo
Design & Production Janet Coyne
Sales Manager Joann M. Randell
Troy, Michigan photography for this guide is
courtesy of The City of Troy
City’s Economic Development Team.
We invite you to visit us today and explore all that Troy has to offer. We are truly
creating an environment for investment in the City of Troy, and we look forward to
working with you.
Sincerely,
MARK MILLER
Director of Economic
& Community Development
GLENN LAPIN
Economic Development
Specialist
© 2012, American Images Publishing. All rights reserved.
Every precaution has been taken to assure the accuracy of the
information included in this guide. However, due to the scope of the
project and the number of different sources consulted, neither the writer,
editor, publisher, sponsoring agency, or advertisers can be held liable
for damages arising out of errors or omissions.
Tro y, Mi c h i g a n
3
Land area: 34.3 square miles
Acres of park/city owned land: 900 acres
Retail: 7 million square feet
Office/Engineering:
21 million square feet
Manufacturing: 16 million square feet
Median Household Income: $89,061
Average Housing Cost: $240,723
City Tax Rate (2012): 10.48
Total Assessed Property Value (2012):
$4,410,108,900
Population: 80,980
Climate
The City of Troy enjoys four distinct
seasons. Snowy winters and warm, sunny
summers offer residents and visitors alike
a variety of recreational choices.
Median Temperature:
January 26.2°F July 73.6°F
Distance to Major Markets (in miles)
Ann Arbor ........................ 51
Chicago, Ill. ................... 296
Cleveland, Ohio............... 190
Detroit Metro Airport........... 35
Downtown Detroit .............. 23
Flint ............................... 47
Grand Rapids.................. 146
Lansing........................... 80
Minneapolis, Minn........... 702
Pittsburgh, Pa................. 306
Toronto, Ontario .............. 233
Windsor, Ontario ............... 24
Public School Enrollment
Avondale ............................... 3,902
Birmingham .......................... 8,129
Bloomfield Hills .................... 5,911
Lamphere .............................. 2,531
Royal Oak ............................. 5,663
Troy .................................... 12,179
Significant Awards
• Troy continues to maintain its AAA bond rating
from Standard & Poor’s.
• For the 14th straight year, the City of Troy received the
Certificate of Achievement for Excellence in
Financial Reporting for its Comprehensive Annual Financial
Report and its Popular Annual Financial Report.
• Troy received top rankings for attracting and retaining
entrepreneurial companies for the 5th straight year from
the University of Michigan-Dearborn eCities 2011 Report.
• Morgan Quitno Press named Troy the safest city in Michigan
and 19th safest in the nation for cities with a population of
75,000 and above.
• The City of Troy Public Works Department Fleet Division was
named one of the top 20 fleets in North America for the past
five years and met the Blue Seal of Excellence Recognition
Program standards established by the ASE
(only municipality in Michigan that is a current member of the Blue Seal
Recognition Program).
4
Tr o y, M i c h i g a n
OAKLAND
COUNTY
Troy
696
TROY
94
75
Detroit
96
275
Windsor
CANADA
WISCONSIN
By the Numbers
Altair Engineering
Bank of America
Beaumont
– Troy Hospital
Behr America
Caretech Solutions
Delphi
Flagstar Bank
Huntington Bank
Kelly Services
Macy’s
Magna International
Meritor
PNC Bank
Troy School District
The Suburban Collection
Valeo
MICHIGAN
Milwaukee
LAKE
MICHIGAN
Chicago
ILLINOIS
TROY
Major Employers
INDIANA
Lansing
Grand Rapids
Troy
★
Detroit
Ann Arbor
OHIO
Windsor,
Canada
MAKING A DIFFERENCE IN THE INDUSTRY AND THE COMMUNITY
Seco Tools is a global organization, a world leader in
metalworking technologies providing solutions for milling,
turning, holemaking, and toolholding. These products and
processes are focused on today’s challenging applications
in industries such as aerospace, medical, motorized vehicles,
energy and general engineering.
Our company is committed to meeting customers’ increasing
demands for productivity, quality and cost effectiveness.
Seco maintains a high standard for the environment and
carbide recycling, and is proud to have been a Michigan based
company for over seventy-ﬁve years.
www.secotools.com/us
Get to know your home team.
Some of the world’s ﬁnest technology is being
developed … right in your hometown.
Automation Alley has spent the past 12 years driving
innovation through the growth of small businesses.
And after bringing hundreds of jobs and millions of
dollars in funding to the companies in the region, we’re
proud to say that it all starts here, in the City of Troy.
Get to know Automation Alley.
Automation Alley is Michigan’s largest technology business association,
serving companies in the City of Detroit and the surrounding eight-county region.
Learn how you can get involved by visiting www.automationalley.com or call (800) 427-5100.
5
TROY
Focus on: Location
It’s All About
Business in
Troy, Michigan
Altair Engineering
Searching for a top-notch
business location with
enviable demographics?
Welcome to Troy!
Meritor
T
roy, Michigan, is a distinctive
city with unique attributes that
make it one of the most soughtafter cities in southeast Michigan for
businesses and residents alike. Troy’s
population of nearly 81,000 designates
it as the largest city in Oakland County
— and the 13th - largest city in all
of Michigan.
Conveniently located in the heart of
Oakland County, Troy businesses and
residents have quick highway access
to I-75, I-696 and M-59, making
travel to and from the area convenient
and trouble-free. The City is a mere
20 minutes from Detroit, 45 minutes
from either Detroit’s Metropolitan
Airport (DTW) or Flint’s Bishop
International Airport (FNT), and fewer
than 30 minutes from the Oakland
County International Airport (OCIA)
in Waterford.
While many cities and communities
offer great residential or business
advantages, Troy provides a unique
combination of both. Residents and
business owners enjoy attractive
neighborhoods and impressive office
buildings, top-rated schools and
universities, prime shopping and ample
employment opportunities.
A highly educated community,
approximately 57 percent of Troy’s
population has earned a bachelor’s
degree or higher. This focus on
education ensures a skilled workforce
for diverse industries, including
engineering,
manufacturing,
IT,
medical and more.
6
Troy is the city of choice for those
in search of a great business location
and dynamic demographics.
Focus on: Business
Seeking the advantages of a strong
business community? Troy delivers!
Some 6,000 businesses employing
125,000 people are proud to call Troy
“home.” When you combine the City’s
abundant job opportunities with the
excellent quality-of-life advantages,
it’s no surprise that Troy is one of the
nation’s fastest-growing employment
centers, drawing new and expanding
businesses from near and far.
Home to 7 million square feet of
retail space, 21 million square feet
of office and engineering space, and
16 million square feet of manufacturing
space, Troy’s business environment
is progressive and diverse with a mix
of major corporations among smaller
local businesses.
The City is home to several
corporate and divisional headquarters
including Flagstar Bank, Kelly
Services, Bank of America, PNC Bank,
Talmer Bank,
Meritor, Altair
Engineering,
Kostal North
America,
Delphi, Behr
America,
Magna International and AxelTech.
Located in the heart of Automation
Alley, southeast Michigan’s worldrenowned
technology
business
association, Troy is at the center of
global automotive technology, R&D
and manufacturing, and a major
contributor to Michigan’s ranking as
one of the largest high-tech workforce
employers in the country.
On the retail side of business,
Troy’s Somerset Collection is
Michigan’s premier upscale shopping
destination featuring more than 180
stores and restaurants, and is anchored
by Saks Fifth Avenue, Neiman Marcus,
Nordstrom and Macy’s.
Focus on: Government
Looking for a city government
that works hard for you?
It’s right here in Troy!
A 2012 millage rate of 10.48 gives
Troy the distinction of having one
of the lowest tax rates of any city in
Oakland County. This, along with
Troy’s helpful business assistance
programs that encourage economic
Troy Skate Park
growth, are just two of the many
reasons businesses are attracted to this
dynamic City.
With more than 40 percent of the
tax base derived from commercial/
industrial properties, as well as a local
government committed to protecting
natural assets and strengthening the
business sector, Troy is a city that can’t
help but prosper.
As a testament to Troy’s commitment
to a top-quality government, the city
received the Certificate of Achievement
for Excellence in Financial Reporting
from the Government Finance Officers
Association for a 14th consecutive
year.
Focus on:
Quality of Life
Troy
Community
Center
MY IDEAL CIT Y
THINKS GLOBALLY
advantages?
A PLACE wHERE INNOvATORS AND NEw INDuSTRIES GROw
together with uncommon support, guidance and financial incentives
from business development experts. A place that connects me to an
entire network of talent, an educated work force and 859 unique,
foreign-owned businesses from 37 different countries. A place where
opportunity goes by names like Automation Alley and Medical Main
Street. A place that gives me the chance to think bigger and catch dreams.
Come discover a new name for opportunity in a city that’s not just ideal,
but real in Oakland County, Michigan.
Take a look at Troy!
Learn more about your Ideal City at globaloakland.com
Seeking a city
with quality-of-life
Troy is an ideal city for families in
search of a great quality of life. With
some of the highest-ranked schools in
Michigan and the country, moderately
priced homes, safe streets and low
property taxes, it’s easy to understand
why Troy was named the best city
to live in Michigan and 22nd best in
the nation by CNN Money Magazine
in 2008. Troy was also named the
safest city in Michigan and ranked the
19th safest city in the nation (cities
with a 75,000+ population).
The Troy School District is one of
only four districts in Metro Detroit to
receive an A+ rating from the Detroit
News and one of only eight in Michigan
to hold district-wide accreditation
by the North Central Association.
In addition, Newsweek named Troy
Athens, Troy High School and the east
campus of the International Academy
among the top 4 percent of all
U.S. high schools.
Lori Blaker
President and CEO
TTi Global
Rochester Hills, Mich.
Photo: Oakland County International Airport
7
Troy is also committed to higher
education, with 13 universities and
technical schools having campuses
within the city.
When it comes to the great
outdoors, Troy is dedicated to green
space with 20 parks and recreational
facilities consisting of more than 900
acres.
It’s easy to get around in Troy,
even for those without a personal
automobile or who choose not to
drive, thanks to the SMART regional
public transportation system. SMART
provides services to more than 75,000
businesses and 1.3 million jobs,
making travel convenient and efficient.
TROY
Troy residents and
businesses also have
access to two highly
regarded medical centers:
Troy Beaumont Hospital,
recently named one of the
nation’s 100 Top Hospitals
by Thomson Reuters, offers
full inpatient and outpatient services,
while Henry Ford Health System
Medical Center provides such
specialties as dermatology, family
practice, neurology, eye care, pediatrics
and internal medicine, among others.
If quality of life is on your list of
“must-haves” for living or working,
Troy is your city.
Growing
Your Business
in Troy
T
he City of Troy, in collaboration
with our public- and privatesector partners, is focused on
helping your business grow. Through an
economic gardening approach, Troy’s
economic development staff assists
our local companies by identifying
specific business needs and providing
the information, infrastructure and
connectivity necessary to address
those needs. By leveraging Troy’s unique
community assets, partnerships and
available tools to promote business
growth, the City is creating an
environment for investment.
8
Troy’s economic gardening initiative is
called Troy Michigan Business Connect.
particularly those considered “second
stage” (generally between 6 and 99
employees and with an annual revenue
of $750,000 to $50 million). Through
our partnership network, a wide range
of assistance is provided to help Troy
companies grow. Assistance is
available in areas such as business
development,
market
analysis,
logistics, geographic information
systems (GIS), financial management,
human resources development, talent
recruitment, supported employment,
site
selection,
utility
issues,
building permits and inspections,
planning, zoning and other areas.
The program provides assistance
to all growing Troy companies,
Troy Michigan Business Connect
looks forward to working with Troy
businesses to help you grow.
NBS
TROY
Economic
Development
Partners
The Department advises
organizations on available
federal, state and local
assistance tools including
site location, tax incentives,
financing, and work force
and business development.
It also informs businesses
about the procedures and
steps required to obtain approvals for
expansion or relocation projects, and
provides assistance to businesses
throughout the process. Troy is proud
of its diverse business community,
and the Economic & Community
Development Department is available
to assist all businesses — large
and small — with their growth and
expansion needs.
Troy Planning Department
500 W. Big Beaver Rd.
Troy, MI 48084
248.524.3364
Brent Savidant, Planning Director
[email protected]
www.troymi.gov/Planning
The City’s Planning Department
promotes and maintains a clean,
healthy and safe city through education,
cooperation and enforcement of property
maintenance, zoning, nuisance and
rental inspection codes. Troy’s newly
adopted zoning ordinance — available
at www.troymi.gov/planning — is userfriendly and flexible, and promotes
an environment for investment in
the City.
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Economic & Community
Development Department
Troy, MI 48084
Mark Miller, Director of Economic
& Community Development
[email protected]
Glenn Lapin, Economic Development Specialist
[email protected]
248.524.3314
www.troymi.gov/economicdevelopment
Troy’s Economic & Community
Development Department serves as
a resource to businesses looking to
relocate to or expand within the City.
TROY, MI
HOUSTON, TX
248.244.3000
WWW.DOEREN.COM Tro y, Mi c h i g a n
9
Other City of Troy Resources
Troy Brownfield Redevelopment Authority
500 W. Big Beaver Rd., Troy MI 48084
248.524.3330
www.troymi.gov/
BrownfieldRedevelopmentAuthority
Troy Building Department
(SAFEbuilt)
Troy, MI 48084
248.524.3344
Steve Burns, SAFEbuilt Building Official
[email protected]
www.troymi.gov/buildinginspection
The Troy Building Department, a
privately run operation, is a model of
efficiency, effectiveness and quality —
withbuildinganddevelopmentprocesses
that are fast, fair and predictable. The
City’s
building-services
provider,
SAFEbuilt, has earned a 98-percentsatisfaction rating among Troy users
seeking building permits, inspections
and assistance. Builders, homeowners,
business owners, design professionals
and contractors alike have come to
depend on a professional, positive
experience when working with
SAFEbuilt staff members.
Troy Local Development
Financing Authority (LDFA)
500 W. Big Beaver Rd., Troy, MI 48084
248.524.3330
www.troymi.gov/
LocalDevelopmentFinanceAuthority
The Brownfield Redevelopment
authority encourages redevelopment of
environmentally contaminated property
by providing tax increment financing for
the reimbursement of eligible cleanup
and redevelopment costs.
The Local Development Finance
Authority’s primary objectives are to
encourage local development, to prevent
conditions of unemployment, and to
promote economic growth.
Troy Downtown Development Authority
Oakland County Planning
& Economic Development Services
500 W. Big Beaver Rd., Troy MI 48084
248.524.3330
www.troymi.gov/EconomicDevelopment/
DDA.asp
The Troy Downtown Development
Authority (TDDA) engages in long range
planning to sustain long-term economic
viabilityforTroy’spremierofficeandretail
corridor — Big Beaver Road from west
of Coolidge Highway to Rochester Road.
2100 Pontiac Lake Rd., Bldg. 41 West
Waterford, MI 48328
248.858.0720
www.oakgov.com/globaloakland
Michigan Economic Development
Corporation (MEDC) Pure Michigan Business Connect
300 N. Washington Sq.
Lansing, MI 48913
888.522.0103
www.michiganadvantage.org/BusinessConnect/
Michigan Small Business & Technology
Development Center (MI-SBTDC)
2100 Pontiac Lake Rd., Bldg. 41West
Waterford, MI 48238-0412
616.331.7480
www.misbtdc.org/oaklandcounty
TRUSTED ENGINEERS, ENVIRONMENTAL SCIENTISTS, ARCHITECTS
Automation Alley Technology Park
2675 Bellingham, Troy, MI 48083
248.457.3200
Resource Center
800.427.5100
www.automationalley.com
Walsh Institute
3838 Livernois Rd.
P.O. Box 7006, Troy, MI 48007-7006
248.823.1256
www.thewalshinstitute.com
Troy Chamber of Commerce
A Tradition
Traditio of Personal
P
l Service
Se ic & Successful
S
sf l Projects
P ject
Established in 1915
(248) 454-6300
www.hrc-engr.com
10
4555 Investment Dr. , Suite 300
Troy, MI 48083
248.641.8151
www.troychamber.com
Troy Michigan Works!
550 Stephenson Hwy., Suite 400
Troy, MI 48083
248.823.5116
www.troymichiganworks.com
TROY
The City of Troy is perfectly
positioned from a transportation
standpoint. Surrounded by major
expressways with access to key
international & regional airports,
business & industry can move
people & product throughout
Michigan & the entire United States
& Canada efficiently & with ease.
Roads
M
ajor expressways in and around
Troy and Oakland County
include I-75, I-96, I-275, I-696
and I-94. These major transportation
arteries link the county and the City
of Troy to all major Midwestern U.S.
cities, as well as Canada.
regional bus routes, taxi services and
the Troy-Oakland Airport.
The project includes a 2,000-squarefoot building with a waiting area
and public restrooms. The facility
will provide linkages to groundside
intermodal facilities via ADAcompliant sidewalks and a pedestrian
bridge over the tracks to a new Amtrak
platform on the west side of the tracks.
Elevators and stairs will provide access
to the pedestrian bridge.The new facility
will also provide a bus-stop area sized
to accommodate four full-size buses,
a passenger drop-off and pick-up lane
and a taxi waiting area. Parking for all
modes of travel will be provided in an
upgraded parking area on the Troy side.
Bus Transportation
SMART Bus
www.smartbus.org
SMART is southeast Michigan’s
only regional public transportation
provider, serving Macomb, Oakland
Big Beaver Road
and Wayne counties. SMART bus
routes provide access to more than
75,000 businesses and 1.3 million jobs.
The SMART bus system offers a
variety of fixed-route and curb-to-curb
service options and 57 bus routes and
6,000 bus stops.
Troy Medi-Go Plus
www.troymedigo.org
Troy Medi-Go Plus is a non-profit
organization dedicated to helping
Troy senior citizens and adults with
disabilities get to medical appointments
and other important destinations.
248.457.1100
[email protected]
Detroit Metropolitan Wayne County
Airport (DTW)
www.metroairport.com
Oakland County International Airport
(OCIA)
www.oakgov.com/aviation
HELLER MACHINE TOOLS.
Flexible manufacturing solutions.
Bishop International Airport (FNT)
www.bishopairport.org
Coleman A. Young International Airport
(Formerly Detroit City Airport)
www.ci.detroit.mi.us
Oakland/Troy Airport
www.oakgov.com/aviation/ota
Troy Multi-Modal Transit Center
The TroyMulti-Modal TransitFacility
will replace an inadequate Amtrak station
with an ADA-compliant, safe and secure
transportation center in the City of Troy.
The facility will strengthen transit
alternatives and provide greater
mobility options through a centralized
facility allowing user access to intercity
passenger rail service,
HELLER Machine Tools
1225 Equity Drive, Troy, Michigan USA 48084
Tel: 248-288-5000
www.heller-machines.us
Aerospace
Energy
Heavy Equipment
Medical
Industrial
Automotive
11
TROY
Swim, golf, shop & so much
more! The City of Troy has a
variety of recreational options
that fit just about any lifestyle,
from family-friendly to lone
weekend-warrior activities
or the tranquility of a museum
or nature center.
W
ith
over
1.4 million
square feet
of distinctive dining
and
shopping
experiences,
The
Somerset Collection is a regular
destination for Troy residents and a
must-see for visitors. Located in the
City’s Golden Corridor on Big Beaver
Road, Somerset North and Somerset
South are home to major anchor
retailers including Macy’s, Neiman
Marcus, Nordstrom and Saks Fifth
Avenue. Additional exclusive choices
at Somerset include Cartier, Ralph
Lauren, Gucci and Louis Vuitton,
as well as a number of excellent
restaurants.
Are you looking for more?
We believe long-term success depends on working
with people who care as much about your future
as you do. So we offer a cross-functional team of
professionals customized to provide just the services
you need, only the services you need.
s &
CPA nts
ulta
Cons
One
Team
Your
re
Futu
h
Wealt s
or
Advis
More
orate
Corp
rs
igato
t
s
e
v
In
More
Ideas
ce
Servi
ience
Exper
More
1500 West Big Beaver Road
2nd Floor
Troy, MI 48084
248.952.5000
www.rehmann.com
12
The Oakland Mall is another
huge retail-shopping destination in
Troy. Major retailers at Oakland
include Macy’s, Sears and JCPenney,
along with 140 other specialty shops
that make for an abundant shopping
experience.
If hitting the links is more your style
than hitting the mall, the City of Troy
operates two beautifully manicured
golf courses. Sanctuary Lake offers
one of the most unique golf experiences
in all of Oakland County with
a par-71 links-style setting and four
sets of tees ranging from 4,750 to 6,555
yards. www.golftroy.com
Sylvan Glen Golf Course is
the second of the City’s two courses.
Established in 1922, Sylvan Glen is
a traditional tree-lined golf course
with four sets of tees perfect for both
experienced golfers and beginners.
The Troy Family Aquatic Center
is the perfect destination for a summer
“stay-cation.” Families can enjoy the
main swimming pool with a zero-depth
entrance (like a beach) and lap lanes,
kids’ spray pools with a waterfall, a
water tree and pint-size water slide,
tube slide and body slide, a sand-filled
area with a playscape and toys, sand
volleyball courts, deck and lounge
chairs, food concessions and shaded
patio.
Another
place
that
offers
recreation for the entire family is
the Troy Community Center. The
The Somerset
Collection, located
on West Big Beaver
Road, is a great
shopping & dining
destination.
The charming Troy Historic
Village (www.troyhistoricvillage.org)
includes 10 historic buildings with
19th and 20th century originals where
history lives offering year-round
educational programs, summer camps,
special events and lectures. The Village
is also the perfect place to hold an
intimate wedding and reception or
perfect for business meetings and
company retreats.
127,000-square-foot, state-of-the-art
complex includes a fitness room with
60 pieces of cardiovascular equipment,
25 circuit-training machines and free
weights, an indoor aquatic facility,
gymnasium, locker rooms, dance/
aerobic studios, meeting rooms and
banquet facilities, teen room, senior
center and preschool area.
Lloyd A. Stage Nature Center’s
two miles of trails meander through
100 acres of land. Visitors can walk
two miles of trails through meadow,
forest, marsh and river areas.
Additionally, the new asphalt pathway
at the Nature Center now allows
wheelchairs, walkers and strollers
access to a trail that leads through
the forest and over the Rouge
River. The Troy Nature Society,
(www.troynaturesociety.org) a nonprofit organization, conducts nature
education programs and activities year
round for all ages.
13
TROY
Troy’s
health care &
public-safety
organizations
are great
examples of
how making
investments today can meet
tomorrow’s challenges head
on. Our highly trained medical
professionals, firefighters
& police officers have the
advantage of working in state-ofthe-art facilities & with cuttingedge equipment to provide the
best services possible.
Beaumont Health System
B
eaumont Health System (www.
beaumonthospitals.com)
is
a three-hospital, 1,744-bed
regional health care provider that
includes Troy Beaumont’s 394-bed
hospital. With locations in Oakland,
Macomb, and Wayne counties,
the system employs more than
14,000 personnel and 3,700
physicians. All three hospitals were
recently listed in the top ten Detroit
metro area hospitals by U.S. News &
World Report.
Henry Ford Health System
With more than 23,000 employees –
including 9,400 nurses and 4,000 allied
health professionals – Henry Ford Health
System (www.henryfordhealth.org) is
considered one of the nation’s leading
health care providers. The health
system’s six member hospitals offer
an array of acute, primary, tertiary and
preventive care with 1,200 physicians
and researchers in 40 specialties.
Setting the
Standard for
Excellence in
Education
Student achievement that is among the highest at state and national levels
K-12 International Baccalaureate Programs
MHSAA-recognized exemplary athletic programs
All schools named Michigan Exemplary Blue Ribbon
One of the Top 100 Communities for Music Education
Recently named one of the top 25 school districts in America for relocation
Athens, IA East & Troy named among top four percent of nation’s high schools
More than $11 million in scholarships awarded to Troy students
WWW.TROY.K12.MI.US
14
Troy Police
Department
Troy Fire
Department
Troy Fire Department
The Troy Fire Department is
unique in that it relies on volunteer
firefighters. While the volunteer fire
service is a longstanding tradition in
many areas, it is not typical for large
communities like Troy. Troy’s Fire
Department is nationally recognized as
a model for large-scale volunteer fire
departments and provides top-rated,
cost-effective fire protection service to
Troy citizens, businesses and property.
The 11 career staff members and 180
highly trained and certified firefighters
provide emergency services from six
fire stations located throughout the City.
Learn more at www.troymi.gov/fire or
call 248.524.3419.
Troy Police
The Troy Police Department has
a proud history of providing effective
and efficient law-enforcement service
through a culture of partnership
between the Police Department and
the Troy community. Ranked as the
safest city in Michigan with a population
over 75,000, the men and women
of the Troy Police Department are
dedicated to carrying out this tradition
long into the future and ensuring
the community remains one that
is sought out for its high quality
of life. Visit www.cityoftroypolice.com
or call 248.524.3477.
Top Lawyers
TROY, MICHIGAN
Michigan’s Premiere Address
for Business, Retail & Commerce
WHY TROY IS A GREAT PLACE TO START AND GROW YOUR BUSINESS
Outstanding Location/Demographics
•
Largest city in Oakland County (pop. 80,980); 13th largest city in Michigan;
third largest city in the state based on total property value.
•
Outstanding location in the heart of Oakland County offers quick highway access
to I-75, I-696 and M-59.
•
A highly educated community with 57% of its population obtaining a
bachelor’s degree or higher ensures a skilled workforce for diverse industries.
•
Home to a vibrant and diverse international community.
Strong Business Community
•
Home to 7 million square feet of retail space, 21 million square feet
of office and engineering space, and 16 million square feet of
manufacturing space.
•
Troy’s 6,000 businesses employ 125,000 people.
•
Home to several corporate and divisional headquarters including
AxelTech, Altair Engineering, Bank of America, Behr America, Delphi,
Flagstar Bank, Huntington Bank, Kelly Services, Kostal North America,
Magna International, Meritor, PNC Bank, and Talmer Bank.
•
Home to Automation Alley, Michigan’s largest technology business
association driving growth in Southeast Michigan’s economy.
•
Troy is Michigan’s top location for Automotive Research and Development
facilities, home to 41 of the state’s 330 automotive R&D facilities.
Efficient Government
•
With a 2011 millage rate of 10.19, Troy has one of the lowest tax rates in Oakland County.
•
Troy’s building and development processes are fast, fair and predictable.
•
SAFEbuilt, Inc., Troy’s building services provider, has been given a 98% satisfaction
rating by customers seeking building permits, inspections and assistance.
•
Troy’s updated Master Plan and new, state-of-the-art Zoning Ordinance
are user-friendly, flexible and forward thinking.
Troy is Creating An Environment for Investment.
Call today to schedule an appointment with our Economic Development Team.
CITY OF TROY ECONOMIC &
COMMUNITY DEVELOPMENT
Troy, MI 48084
Mark Miller
Director of Economic &
Community Development
[email protected]
Glenn Lapin
Economic Development Specialist
[email protected]
248.524.3314
Cindy Stewart
Community Affairs Director
[email protected]
248.524.1147
www.troymi.gov/economicdevelopment
TROY IS A GREAT PLACE TO START AND GROW YOUR BUSINESS
SUMMARY OF COMMUNITY ASSETS
Outstanding Location/Demographics
Troy is the largest city in Oakland County (pop. 80,980), 13th largest city in Michigan, and the
third largest city in the state based on total property value.
Troy’s outstanding location in the heart of Oakland County offers quick highway access to I-75,
I-696 and M-59. Troy is only 20 minutes from Detroit, 45 minutes from either Detroit’s
Metropolitan Airport (DTW) or Flint’s Bishop International Airport (FNT), and less than 30
minutes to the Oakland County International Airport (OCIA).
Troy is a highly educated community with 57% of its population obtaining a bachelor’s degree
or higher.
Troy is the second most diverse city in Michigan. The City is home to a vibrant and diverse
international community - 83 different languages are spoken in Troy homes.
Strong Business Community
Troy is home to 7 million square feet of retail space, 21 million square feet of office and
engineering space, and 16 million square feet of manufacturing space.
Troy’s 6,000 businesses employ 125,000 people.
Troy is home to several corporate and regional headquarters including Altair Engineering,
AxelTech, Bank of America, Behr America, Delphi, Flagstar Bank, Huntington Bank, Kelly
Services, Kostal North America, Magna International, Meritor, PNC Bank, and Talmer Bank.
Troy is home to Automation Alley, Michigan’s largest technology business association driving
growth in Southeast Michigan’s economy.
Troy is Michigan’s top location for Automotive Research and Development facilities.
According to the Michigan Economic Development Corporation, Troy is home to 41 of the
state’s 330 automotive R&D facilities.
Troy received top rankings for attracting and retaining entrepreneurial companies for the fifth
straight year in a University of Michigan-Dearborn study.
The Somerset Collection is one of this country’s premier upscale shopping destinations. The
1.44 million square foot mall features over 180 stores and restaurants including Saks Fifth
Avenue, Nordstrom, Neiman Marcus and Macy’s.
Efficient Government
With a 2012 millage rate of 10.48, Troy has one of the lowest tax rates in Oakland County.
Troy’s building and development processes are fast, fair and predictable. Safebuilt Building
Department Services, Troy’s building services provider, has been given a 98% satisfaction
rating by customers seeking building permits, inspections and assistance.
1
TROY IS A GREAT PLACE TO START AND GROW YOUR BUSINESS
SUMMARY OF COMMUNITY ASSETS
Troy adopted a new, state-of-the-art zoning ordinance in April of 2011. The new ordinance is
user-friendly, flexible and helps to create an environment for investment in the City. It is
available on Troy’s website (www.troymi.gov).
For the 14th consecutive year, the City of Troy received the Certificate of Achievement for
Excellence in Financial Reporting from the Government Finance Officers Association Awards
for the Comprehensive Annual Financial Report and received the award for the 12 th straight
year for the City of Troy Financial Summary.
Quality of Life
In 2012, Troy was named #1 best city to live in Michigan and #26 best in the nation by CNN
Money Magazine.
Troy is the safest city in Michigan (pop. 75,000+). The City ranked 19th safest in the U.S.
The Troy School District is one of the highest ranked districts in the state and the country. It is
one of only four school districts in Metro Detroit to receive an A+ rating from the Detroit
News. The following schools were named among the top four percent of all U.S. high schools
by Newsweek: Troy Athens, Troy H.S. and the east campus of the International Academy.
The entire Troy School District has achieved North Central Accreditation.
Thirteen universities and technical schools have campuses in Troy.
Troy has an outstanding park system with twenty parks and recreational facilities consisting of
more than 900 acres.
Troy was named a Tree City for the 21st year by the Arbor Day Foundation to honor its
commitment to community forestry.
Troy is serviced by the SMART regional public transportation system. For employees and
residents that do not have access to a personal automobile or choose not to drive, SMART
provides regional access to more than 75,000 businesses and 1.3 million jobs.
Troy residents and businesses have access to two highly regarded medical centers within their
municipal boundaries. Troy Beaumont Hospital’s 394-bed community hospital has full
inpatient and outpatient services. Henry Ford Health Medical Center offers services such as
dermatology, family practice, neurology, eye care, pediatrics, and internal medicine.
Welcome to Troy - Michigan’s Premier Address for Business, Retail and Commerce
8.21.2012
2
PREPARED BY: SMALL BUSINESS FOUNDATION OF MICHIGAN ENTREPRENEURSHIP SCORE CARD MICHIGAN 2011:12 For a copy of the entire Score Card, please visit our website www.sbam.org or contact the SBAM office for a hard copy, 1.800.362.5461 TOWARD AN ENTREPRENEURIAL ECONOMY An Economic Growth Call‐to‐Action for Michigan The policy suggestions that accompany this Blueprint for “Propelling a New Economic Direction for Michigan” represent the culmination of several years of effort by the Small Business Association of Michigan. At our association’s 2010 annual meeting, we issued a formal call for Michigan’s next governor to focus on a game‐changing strategy for growing and sustaining our economy and creating jobs. We call this strategy “economic gardening” – growing our own small businesses from the ground up. It’s vital to the future of our state because most job growth comes from our own small businesses, not big businesses – neither the large firms that we have here in the state nor the ones that are lured to locate here by expensive tax breaks. Following our annual meeting, we issued a “Propelling a New Economic Direction for Michigan” White Paper. The research document, available for download at sbam.org/Action, lays out the elements of a successful economic gardening strategy, including information, infrastructure and environment; lists the services valued by growth‐oriented business owners; and explains how Michigan’s economy and citizens will benefit from economic gardening. The Small Business Association of Michigan believes that in 2011 our state must: 
Engage in a new economic development strategy by committing at least 60 percent of the budget of the Michigan Economic Development Corporation toward economic gardening activities. Details of those key activities related to fast growing “second stage” small businesses (including six framework principles) are provided in the attached Blueprint for “Propelling a New Economic Direction for Michigan” report. 
Take steps to bring our state to a position of leading the nation in the commercialization of the technology that’s developed by our public/private institutions. We are among the nation’s leaders in public/private research output. But we are far behind other states when it comes to turning that research into jobs. 
Shift Michigan’s cultural outlook so that entrepreneurialism is valued and nourished at all levels of society. Michigan has important community assets – including libraries, schools and local governments – that can be energized to encourage small business startups, innovation and job creation. In the months to come, the 10,000‐plus small business members of the Small Business Association of Michigan will hold the new governor and our elected officials accountable for accomplishing these objectives. We invite all Michigan citizens who care about job growth and the revitalization of our state’s economy to join us in our fight. Rob Fowler, President and CEO Blueprint for Propelling a
New Economic Direction
for Michigan
Prepared for the
Small Business Association of Michigan
Prepared by:
Public Policy Associates, Incorporated
119 Pere Marquette Drive
Lansing, MI 48912-1231
(517) 485-4477
Fax: 485-4488
October 2010
Table of Contents
Acknowledgments............................................................................................................................ i
Executive Summary ....................................................................................................................... iii
The Case for Economic Gardening............................................................................................ iii
An Economic Gardening Strategy for Michigan ........................................................................ v
Options for Implementation...................................................................................................... vii
Assessing Success: Research .................................................................................................... vii
Background ..................................................................................................................................... 1
Broadening the Economic Development Strategy...................................................................... 4
The Case for Economic Gardening................................................................................................. 7
Current Economic Gardening Efforts in the United States......................................................... 8
Data on Economic Contributions of High-Growth Companies................................................ 10
Potential Benefits to Michigan.................................................................................................. 12
Limits to What We Know ......................................................................................................... 15
A Michigan Economic Gardening Strategy.................................................................................. 19
Service Delivery Framework .................................................................................................... 20
Possible Elements of an Economic Gardening Strategy........................................................... 29
Financing................................................................................................................................... 34
Options for Implementation.......................................................................................................... 35
Governor’s Office ..................................................................................................................... 35
Legislature................................................................................................................................. 36
The Michigan Economic Development Corporation................................................................ 37
Communication of Implementation .......................................................................................... 37
Assessing Success: Research ........................................................................................................ 39
Acknowledgments
This paper was prepared for and in collaboration with the leadership of the Small
Business Association of Michigan (SBAM). It is based on original and secondary
research by Public Policy Associates, Incorporated (PPA) and on the experience of the
principals in small business policy and entrepreneurship over the past 25 years.
The authors wish to recognize the contributions of the following individuals who have
read drafts and generously shared their comments at meetings or in interviews: John
Bebow, Mark Clevey, Gretchen Couraud, JoAnn Crary, Michael Finney, Michael
Hansen, Gary Heidel, David Hollister, Chris Holman, Allan Hooper, Mark Lange,
Doug Luciani, Jeff Mason, Loch McCabe, Carol Lopucki, Yan Ness, David Palsrok,
Doug Rothwell, Terri Schroeder, Ken Sikkema, Arnold Weinfeld, and Dan Wyant.
Although not all of them fully subscribe to the case being made in this paper, their
insightful critiques and suggestions strengthened the analysis and presentation.
We thank especially Rob Fowler, President and Chief Executive Officer of SBAM,
who has been an exceptionally thoughtful partner in the refinement of this paper. He
has consistently posed questions, raised possibilities, and engaged the authors in a very
fruitful dialogue.
The PPA research on second-stage companies, which laid some of the groundwork for
this paper, was supported by the Edward Lowe Foundation, the Michigan Economic
Development Corporation, and the Small Business Foundation of Michigan. The
support of these organizations is very much appreciated.
Funding for this paper was provided by the Small Business Foundation of Michigan
and the Michigan State Housing Development Authority.
The authors, Jeffrey D. Padden, Jean Johnson, and Dana Swaney Frederick of PPA,
appreciate the support provided by the funders, without which the paper would not
exist. Any factual errors it may contain are solely the responsibility of the authors.
Blueprint for Propelling a New Economic
Direction for Michigan
Page i
October 2010
Executive Summary
Over the past decade, the state of Michigan has experienced an unprecedented economic decline,
in part due to the collapse of the domestic automobile industry. Major efforts have been
undertaken in recent years to revive the state’s economy through issuance of tax credits and tax
breaks to lure new companies and in turn, jobs, to the state. However, these efforts have been
only marginally successful creating fewer jobs than hoped for or expected.
Michigan’s current economic development strategy primarily focuses on attracting large
companies. However, while employment in large, mature companies has been on the decline,
employment in small, growing companies is rising. This paper posits that it is time for the state
to embrace a broader economic development strategy—one that nurtures and supports small,
growing businesses that already exist within the state and have the desire and capacity to grow
rapidly. Known as “economic gardening,” this
Economic gardening entails
strategy provides tools and strategies to these
young, growth-oriented companies, and we propose
cultivating and nurturing local
that it become a central element of Michigan’s
growth-oriented companies; it
economic development philosophy and strategy.
is a change in philosophy, not
This shift will be challenging to achieve, yet is
just a program.
important to undertake. We should note that in this
framework for implementation of an economic
gardening strategy, we do not address the topic areas of taxes, regulation, or access to capital,
despite the fact that they are widely understood to be important to virtually all business owners.
The reason is that many of the tools for aiding in these areas fit equally well with traditional
economic development strategies and economic gardening.
To be clear, this shift means a change in philosophy, not merely adding new programs. Such a
change is extraordinarily difficult to achieve, but it is critical that it happen immediately. The
specific services outlined in the Blueprint are only illustrative of the fundamental refocusing that
economic gardening would entail.
The Michigan-based Edward Lowe Foundation has played a leading role in shaping the
economic gardening philosophy and stimulating its development in several states. Our state is
fortunate it can draw on this important resource as it incorporates economic gardening into its
economic development strategy
The Case for Economic Gardening
The core of the needed economic development change is to embrace economic gardening as an
important addition to the state’s current attraction or “hunting” strategy. In economic
development, as in the animal kingdom, hunting involves stalking individual prey and making a
kill. It means trying to recruit or retain large companies that could choose to locate elsewhere.
The tools used to “make the kill” in economic hunting have become less successful; our spears
Page iii
October 2010
have become dull. Economic gardening, by contrast, entails cultivating and nurturing local
growth-oriented companies by giving them the tools they need to succeed so that they can yield a
harvest of new jobs. The economic-gardening model articulates an approach that is considerably
different from more conventional strategies in that it:
 Builds on the experiences and insights of experts across the nation who are working at the
cutting edge of public-sector business development policies and practices.
 Relies more on providing knowledge and expertise to companies and less on providing tax
dollars.
 Focuses on small companies that have the capacity and intent to grow.
 Emphasizes a market-based role for the public sector, rather than one that focuses principally
on providing services.
 Assumes that business owners are smart enough to decide which services are likely to have
value to them and that they are willing to pay for services that have value.
 Acknowledges that the economic strategy to provide targeted support to skilled entrepreneurs
is aligned with quality-of-life and place-making strategies.
Economic gardening is not a
new concept; it has been in
practice on smaller scales in
various regions and locales
for years.
Economic gardening is not a new concept; it has been in
practice on smaller scales in various regions and locales
for years. The birthplace of economic gardening was
Littleton, Colorado, where economic developers have
been offering local businesses a variety of tools that are
necessary in growing their businesses. The co-creator,
Christian Gibbons, identified three basic elements of
Littleton’s strategy:
 Tactical and strategic information
 Nurturing connections to trade associations, think tanks, academic institutions, and similar
companies
 Quality of life and intellectual infrastructure
Tangible examples of services or tools provided by economic developers to help grow local
businesses include, geographic information systems (GIS) services, databases that can develop
marketing lists and industry trends and answer custom business questions, and training and
seminars dealing with business, management, and customer strategies.
The states of Georgia, Florida, and Wyoming have also taken an economic gardening approach
to their economic development strategies. All three of these states provide a variety of tools and
resources to businesses throughout their states, so Michigan can draw on their ideas and continue
to innovate.
Implementing an economic gardening strategy in Michigan will not only reap the potential
benefit of growing the state’s economy, but there may also be other important benefits, such as:
Page iv
October 2010
 Utilizing and supporting homegrown entrepreneurial talent, existing knowledge resources,
programs, and amenities
 Supporting and refocusing existing local resources
 Building an ongoing infrastructure and culture of entrepreneurialism
 Creating better leverage on investments of tax dollars
 Providing resources that Michigan second-stage business leaders value: industry-specific,
external information that can be learned on a self-directed basis
 Becoming the first state in the nation to fully integrate economic gardening into the core of
its economic development strategy
 Helping to recruit talent and investment
 Keeping our young people in Michigan
 Becoming a leading contributor to development of a national economic gardening
community
An Economic Gardening Strategy for Michigan
In this proposed economic gardening strategy the State’s role, most likely through the new
administration’s Michigan Economic Development Corporation (MEDC), will be stimulating the
growth of high-potential firms by state, local, and private service providers in a way that allows
each partner to do what they do most effectively. This new Michigan Economic Gardening
Partnership will capitalize on the strengths of the state’s impressive and diverse existing assets.
The MEDC can be the entity that leads, manages, and promotes Michigan’s economic gardening
strategy, incorporating the economic gardening philosophy and goals into every aspect of its
operation. Thus, a substantial fraction of the MEDC budget would support economic gardening.
The MEDC also acts as a champion and market-maker, attracting a large enough market to make
it affordable for the private sector to provide their expertise at discounted rates that growing
companies can afford and bringing all the parties to the table with the goal of brokering the best
deal for all involved. Local entities will utilize their knowledge of the local small business
community to identify and communicate with companies who have the capacity and intention of
creating new jobs through growth.
The service delivery framework includes the following set of principles that would guide
development of economic gardening in Michigan:
1. Research-based services developed to improve the likelihood of successful growth by the
targeted companies.
2. Private delivery by seasoned providers motivated to excellence as the key to maintaining
their professional reputation.
3. Market-making role for the public sector, along with the Economic Gardening Partnership, to
identify companies and sectors to match with appropriate providers.
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October 2010
4. Fee-based services alternative allows the cost of private providers to be supported financially
by those benefitting most directly.
5. Self-selection by companies who determine that the services offered have value to aid in their
growth trajectory.
6. Market responsiveness means that services will be entrepreneurial—offered as long as the
companies deem them valuable, no longer. New services are developed in response to
ongoing customer feedback.
Services and guidelines are developed by the state as part of the Michigan Economic Gardening
Partnership, with input from customers and local partners to ensure that resources and services
offered are ones that second-stage business owners value and that will positively impact their
growth trajectory. As time goes on, services not deemed helpful or relevant can be dropped and
new ones added to meet current needs. There are no “winners” and “losers” in regards to which
small businesses will participate in this program; instead, businesses will self-select to opt in to
the program by deciding if they would like to purchase
the services that are offered at a deeply discounted
There are no “winners” and
rate. The firms that deem these services to be of value
“losers” in regards to which
and use will enroll in the program and purchase the
small businesses will
services. Companies that will be targeted for this
participate in this program.
program are second-stage firms, that is, those that have
sales in the range of $750,000 to $50 million, 10 to
100 employees, and the specific intent and capacity to grow. According to the Edward Lowe
Foundation, approximately 1 to 3 percent of firms fit those criteria.1 In Michigan that would be
approximately 2,300 to 6,900 companies.
While a variety of tools and services have historically been offered as part of economic
gardening programs, in Michigan two possible service offerings will be tested initially, along
with a potential marketing and delivery system. The two services will be company analysis and
customized market research. The Small Business Association of Michigan has already
experimented with providing customized market research in two Michigan counties, with the
program director reporting a positive reaction,
The two services offered to
“Preliminary findings from the work completed so
far indicate that providing growth-oriented
targeted Michigan small
companies (‘intent to grow’) with high-level market
businesses will be a company
research is a good way to enhance their ‘capacity’
analysis and customized
for growth. A Regional Economic Gardening
market research.
Support Service allows the high cost for market
research to be spread across multiple cost centers,
thus lowering the costs for individual projects.”2 One benefit is that we can leverage current
publically owned research resources through universities and public libraries, such as market
research databases. Company analysis services have been identified by small, high-growth firms
as useful in identifying barriers encountered during the growth process and mapping out an
1
2
Edward Lowe Foundation, <http://www.edwardlowe.org/index.elf?page=about&function=mission>.
Mark Clevey, memo, addressed to Jeffrey Padden, June 29, 2010, Summary of SBAM RBEG Projects.
Page vi
October 2010
overall strategy for growth. These two services will be offered by experienced private
consultants at discounted rates.
A key to the success of this program lies in its marketing. The State will be expected to provide
overall marketing support for the program including a Web site, press releases, and other
promotional materials. It is estimated that these services will be delivered to 500 to 600
companies per year after startup, with the number growing over time.
The three cost categories for the economic gardening strategy are State costs, local costs, and
private-provider costs. The State will fund its staff costs, and local entities would be paid a
modest fee per customer to support their new costs. Discounted private provider costs are
expected to ultimately be paid by the participating companies.
Options for Implementation
With many partners involved in this economic gardening strategy, it is expected that there will
need to be strong leadership at the state level, particularly from the governor’s office, the
Legislature, and the MEDC. The governor’s office will play the role of announcing and
supporting the strategy at its onset and appointing a chief executive for the MEDC that fully
embraces the economic gardening strategy. The Legislature will become involved if there is
legislation needed to support this approach. The MEDC, working closely with relevant state
agency partners, will act in the brokering and marketing roles. All of these entities will be
critical in communicating the strategy to targeted businesses and the public at large.
Assessing Success: Research
One of the most important aspects of this strategy will be to track its success from the very
beginning of implementation. The evaluation of its success will be tracked in four ways:
tracking the progress of jobs created, investment, and sales growth by participating companies;
encouraging program input and feedback from participating companies; conducting a public
tracking survey of the entrepreneurial culture and environment; and measuring trends in
entrepreneurial activity.
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October 2010
Background
Throughout this first decade of the new millennium, Michigan has experienced an unprecedented
economic decline. After a century of prosperity centered on automobile manufacturing, the
domestic auto industry collapsed and with it Michigan’s economic core. Efforts were undertaken
throughout the decade to revive that industry, but no credible observers believe that the auto
Efforts to stimulate
economic growth through
tax credits have been less
successful than hoped.
industry in Michigan will regain its peak level of
employment. Nevertheless, specific tax breaks and a
whole new business tax structure were aimed in that
direction.3 While manufacturing remains important to
our economic future, efforts to attract or even retain
manufacturing firms consistently fell short of hoped-for levels of success. A recent analysis of
tax credits issued by the Michigan Economic Growth Authority (MEGA) shows that, on average,
only 294 jobs were created of each 1,000 jobs expected.4 Most would agree, however, that the
MEGA process, which does not pay tax credits until jobs are actually created, avoids many of the
pitfalls of programs in other states. In fact, a detailed estimate by the W.E. Upjohn Institute for
Employment Research shows that, while MEGA is modest in scale, it is a cost-effective means
of using tax credits to stimulate job creation and has resulted in net job creation.5 Clearly,
though, these efforts to stimulate economic growth through tax credits have been less successful
than hoped.
Over the past 15 years, employment in large, mature companies in Michigan has declined while
employment in smaller, younger companies has grown. By looking at net change in employment
separately for companies within Michigan and those that moved in or out, a more vivid picture
emerges. Michigan firms with more than 500 employees had a net loss of nearly 388,000 jobs
through expansions and contractions. Undoubtedly, outsourcing by large companies contributed
3
Timothy J. Bartik and George Erickcek, “The Employment and Fiscal Effects of Michigan’s MEGA Tax Credit
Program,” W.E. Upjohn Institute for Employment Research, Kalamazoo, Mich., April 2010, 7,
<http://www.upjohninst.org/publications/wp/10-164.pdf>. Based on MEDC data, the authors report that, “Over the
life of the program, about 49 percent of the credits have been in the motor vehicle and motor vehicle-parts
industries, and 31 percent in other manufacturing industries.”
4
Michael D. LaFaive and James M. Hohman, “The Michigan Economic Development Corporation: A Review and
Analysis,” The Mackinac Center for Public Policy, August 31, 2009, <http://www.mackinac.org/10933>.
5
Bartik and Erickcek, “The Employment and Fiscal Effects.”
Page 1
October 2010
to the growth of some smaller firms, so some jobs shifted from large firms to smaller ones, but it
is beyond the scope of this paper to quantify that effect. It is clear, however, that a great number
of jobs that had been present in large manufacturing firms simply disappeared, as indicated by
the decline in the net number of jobs in manufacturing and related industries. Michigan’s current
economic strategy did not fare well, either: 16,000 jobs were gained from firms that moved in,
but 21,000 were lost through those that moved out.6
The public expects the State of Michigan to provide help to business owners and to those
considering launching a business, but it is short on
understanding what to do or how to do it. Often, it is
suggested that, while providing support, “government
should not pick winners and losers,” which implies
that all comers should be treated equally. For small
The public expects the State
of Michigan to provide help
to business owners and to
those considering launching
a business.
businesses, this might mean that all would receive the same level of support or that none would
receive any help at all. The numbers, though, make the former impossible and political reality
rules out the latter.
There are currently over 230,000 business establishments in Michigan that have between 1 and
99 employees.7 In addition, there are about 640,000 self-employed individuals.8 That is a total
of 870,000 small businesses. If the government were to provide only a modest level of support,
say $1,000 worth of help (cash, technical assistance, etc.), to each of them, the cost would be
$870 million per year and the return would be negligible. Clearly that is not a feasible strategy;
the entire budget of the Michigan Economic
The SBTDCs should play an
important role in a revamped
economic development strategy.
Development Corporation (MEDC) is
approximately $212 million.
Given such staggering potential costs, it is
tempting to say that government should simply exit the business development business. This is a
view deeply held and actively espoused by the Mackinac Center for Public Policy, an influential
6
Edward Lowe Foundation, YourEconomy.org, <http://youreconomy.org/>.
U.S. Census Bureau, 2007 County Business Patterns, August 28, 2009,
<http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=CB0700A2&-geo_id=04000US26&search_results=01000US&-_lang=en>.
8
U.S. Census Bureau, 2008 Nonemployer Statistics, 2008.
7
Page 2
October 2010
conservative think tank in Midland, Michigan. In comments to Crain’s Detroit Business,
Michael LaFaive, Director of Fiscal Policy for the Mackinac Center for Public Policy, said, “The
MEDC is an expensive bureaucracy and ‘arguably the least necessary entity in state
government.’”9 We do not think that such a laissez faire approach resonates with either public
expectations or the best available economic analysis; there is a need for government to play an
active, constructive role. Thus, rather than to follow either an all or nothing path, we suggest
that the State take a more metered approach.
The public sector currently supports start-ups and small first-stage firms through the Small
Business and Technology Development Center (SBTDC) network and the U.S. Small Business
Administration. While there are outstanding and important exceptions, the network’s 2009
annual report indicates that many of the companies they support are local-market enterprises that
do not become significant job creators.10 The SBTDC plays a valuable role for its customers,
and the public investment in that work should be continued. As the odds for economic impact
improve, however, more public investment of various kinds can be justified. The SBTDCs
should play an important role in a revamped economic development strategy in Michigan, since
they already serve many companies (15,808 in
2009),11 and have contacts with small businesses
across the state.
While its objectives are laudable and wellintentioned, the MEDC primarily takes a mostly
Michigan’s strategy has not had
sufficient breadth or depth to
cope with the transition from the
economy of the past to the
economy of the future.
conventional approach to attracting new
companies to Michigan and conducting retention visits with current employers.12 The attraction
9
Amy Lane, “State Debates MEDC’s Value,” Crain’s Detroit Business, May 5, 2003,
<http://www.crainsdetroit.com/article/20030505/SUB/305050863>.
10
Michigan Small Business and Technology Development Center, “Who We Are,” <http://misbtdc.org/who-weare/>.
11
Ibid. The intensity of these engagements is modest, with 32,740 hours of counseling provided to 15,808
customers, or an average of about two hours per customer. The engagements we will propose in this paper are about
20 times more intensive.
12
Michigan Economic Development Corporation, “Special Advertising Feature,” Inc. Magazine, July/August 2010.
The MEDC lists a variety of assets and programs that comprise Michigan’s economic advantages. Mostly, it
focuses on financing tools and location decisions. In describing “tools of the entrepreneurial trade,” it describes a
number of important and valuable programs that could make major contributions to an economic gardening strategy.
It has not, however, articulated a strategic focus on the smaller, high-growth firms that are the subject of this
Blueprint.
Page 3
October 2010
strategy focuses almost exclusively on incentives and the retention visits serve mostly as an early
warning system for companies that may be considering moving out of state or laying off
workers. Additional tools can better support companies with growth potential to become more
competitive or to grow successfully more quickly. Thus, the economic development strategy of
the State of Michigan has simply not had the breadth or depth of approaches necessary to cope
with the transition from the economy of the past to the economy of the future.
Another vestige of our century of auto-related success is that Michigan no longer has a strong
culture of entrepreneurship. Those who open a business are often seen not as economic pioneers
but as outsiders unable to succeed in the corporate world. The hope is that through strengthening
a culture that embraces entrepreneurialism as not only a “norm” but something to be lauded, the
culture and the feeling of the state will shift to a more positive tone for small businesses. There
is potential for great synergy between efforts to
There is potential for great synergy
between efforts to strengthen
Michigan’s entrepreneurial culture
and to create more attractive places
for people to work and live in
Michigan.
strengthen Michigan’s entrepreneurial culture
and to create more attractive places for people to
work and live in Michigan. There is a growing
school of thought that suggests that intentional
“place-making” or creating walkable
downtowns with strong arts, cultural, and
entertainment offerings can attract well-educated and creative young professionals who in turn
can contribute to economic vitality. Those young professionals, however, need jobs in order to
stay in a community that attracts them. This apparent paradox must be resolved in order to
anchor the young people Michigan needs to retain. The broader strategy described below
addresses this and the other limitations of Michigan’s economic development strategy. 13
Broadening the Economic Development Strategy
Clearly, the time has come for the government and people of Michigan to embrace a broader
strategy for economic development. While some of the current approaches merit retention, we
13
Ibid. The MEDC sees Michigan’s natural and cultural assets as quite relevant to the economy. The relevance that
the agency articulates, however, is focused entirely on the location decision by business owners, not as integral to
resolving the paradox described here.
Page 4
October 2010
suggest here that new strategies and tools be added to Michigan’s economic development
portfolio.
It may appear that the options for an effective public-sector role in supporting economic growth
are not promising. We have asserted that: (1) business attraction as a primary tool has not been
as successful as we would hope, (2) supporting every small business is not economically feasible
and pays only minimal returns, and (3) exiting altogether the economic development business is
neither appropriate nor politically feasible. There is, however, economic gardening as a fourth
way that capitalizes on the strengths of government while avoiding many of its inherent
limitations and weaknesses.
The strategy suggested here is about positioning the public sector to help increase the odds that
small firms that intend to grow will do so successfully. It would build directly on the data that
show the importance of high-growth small firms in creating jobs and the services that can help
them grow successfully. And, it would not attempt to pick winners and losers, but instead would
allow business owners to self-select based on their assessment of the likely value of the services.
While the services would be marketed to those small companies that intend to grow, they would
not be closed to anyone.
Perhaps most important is that the shift described here is one of changing philosophy, not merely
adding new programs. The specific services outlined below are only illustrative of the
fundamental refocusing that economic gardening would entail. To succeed, this philosophy
would need to permeate the governor’s office; the MEDC; the Department of Energy, Labor, and
Economic Growth; Treasury; and other executive agencies.
Such a change is extraordinarily difficult to achieve, but it is critical that it happen immediately.
The status quo has great momentum and many vested in its continuation. Thus, we will need
effective allies to achieve the transformation quickly. Michigan is very fortunate that the
Edward Lowe Foundation, based in our state, has played a leading role in shaping the economic
gardening philosophy and stimulating its development in several states. Its credibility,
knowledge, and commitment make it a formidable resource in an effort to reshape the state’s
approach to development. Overall, collaboration with the Foundation is likely to dramatically
strengthen a Michigan economic gardening strategy.
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October 2010
The Case for Economic Gardening
The core of the needed economic development evolution is to embrace not just hunting for
business but also economic gardening to grow our own companies and jobs. In economic
development, as in the animal kingdom, hunting involves stalking individual prey and making a
kill. It means trying to recruit or retain large companies that could choose to locate elsewhere.
The tools used to “make the kill” have, as noted above, become less successful; our spears have
become dull. We have accelerated the chase, but our competitors are also running faster and so
is our prey. Economic gardening, by contrast, entails
The core of this broader
strategy for economic
development in Michigan
is to embrace gardening
along with hunting.
cultivating and nurturing local growth-oriented companies
by giving them the tools they need to succeed so that they
can yield a harvest of new jobs.
As Small Business Association of Michigan Chair Cynthia
Kay put it, “Economic gardening means growing our own small businesses in Michigan from the
ground up . . . . It’s important because most job growth comes from our own small businesses,
not big businesses—neither the ones that we have here in the state nor the ones that are lured to
locate here by expensive tax breaks.”14 This proposed economic gardening strategy is researchbased and seeks to implement a model in which small, high-growth businesses in Michigan will
be given the opportunity to procure much-needed services from experienced, skilled consulting
organizations.
We should be clear, however, that this paper does not propose to do away with the business
attraction model that has been the core of our economic development strategy for so long.
Instead, including economic gardening, as well as attraction efforts, in the toolbox for the state’s
economic development portfolio would be beneficial. Using those strategies in conjunction with
one another can only serve to support the state’s economic future. We should also note that in
this framework, we do not address the topic areas of taxes, regulation, or access to capital,
despite the fact that they are widely understood to be important elements of any business
14
Cynthia Kay (SBAM Chair), comment made at SBAM’s Annual Meeting & Networking Luncheon, Kellogg
Hotel & Conference Center, June 24, 2010.
Page 7
October 2010
strategy. The reason for this choice is that many improvements in these areas apply equally well
with traditional economic development strategies and economic gardening.
Current Economic Gardening Efforts in the United
States
There are several places in the United States that are currently employing an economic gardening
strategy as their main economic development tool. The City of Littleton, Colorado was the
birthplace of the economic gardening movement, and it provided a number of tools to small
businesses to aid in their growth. The economic gardening best practices that evolved in Littleton
were ultimately associated with three critical themes: infrastructure, building and supporting the
development of community assets essential to commerce and overall quality of life; connectivity,
improving the interaction and exchange among business owners and critical resource providers;
and market information, access to competitive intelligence on markets, customers, and
competitors.
Following the City of Littleton’s example, the state of Florida, through the University of Central
Florida (UCF), has undertaken a similar model of offering services to its second-stage businesses
in six regions throughout the state to aid in their growth. Along with other services, UCF is
offering information resources similar to those in Littleton, as well as decision-making tools
(e.g., strategy analysis, capital referrals). UCF develops the tools, and they are distributed to
businesses via technical assistance teams that work in the six regions.15
Implemented on a statewide level, the state of Wyoming employs an economic gardening
strategy that includes a statewide center for economic gardening tools, the Wyoming Market
Research Center. Wyoming offers a variety of tools to their small businesses:
1.
2.
3.
4.
5.
6.
15
Basic market research
Marketing lists
Business-to-business contacts
Competitive intelligence
Demographics and psychographics
GIS analysis and mapping
GrowFL, “Cultivating Growth Companies” (2010). <http://www.growfl.com/>
Page 8
October 2010
7. Site selection assistance
8. Customer profiling
9. Marketing material evaluation
10. Original research
The tools that Wyoming offers are available to businesses at no cost. The most updated
information available reports that the size of the economic gardening program has increased
from serving 57 businesses in 2003 to 286 businesses in 2007.16 While it is true that Wyoming
has implemented this program on the state level, it should be mentioned that it is still operating at
a relatively small scale. Michigan has over 10 times as many firms as Wyoming, so a
proportional program in our state would be serving more than 3,000 firms.17
The state of Georgia implemented a Littleton-like economic gardening model throughout many
regions within the state. The model started out as many interrelated economic development
programs and morphed into an economic gardening program. Georgia understood that it would
be challenging to implement a small, regional program on a statewide level, so it set out very
specific parameters of who the program was intended for and the goals of the program.18
It is important to note that these and other policies, strategies, and initiatives characterized as
“economic gardening” vary widely. They are experiments that differ in their content, scale,
delivery systems, pricing strategies, and marketing approaches; this is not surprising for an
innovation that only in recent years has moved beyond its roots in Littleton, Colorado. The field
is still in a highly creative stage, which means that those who are conducting pilot tests or
demonstrations are blazing the trails they are traveling.
Based on our national research regarding economic gardening, it has become clear that there are
a number of common themes that permeate the experimental work and that the economic
gardening model differs from conventional strategies in several important ways. These themes
and differences are that economic gardening:
16
Economic Gardening Part Two (2009). <http://blog.edcsouthwestcalifornia.com/blogpost-15751/EconomicGardening.html>
17
U.S. Small Business Administration, Office of Advocacy, based on data from the U.S. Census Bureau, Statistics
of U.S. Businesses, <http://www.census.gov/econ/susb/>. Analysis by Public Policy Associates, Inc.
18
Steve Quello and Graham Toft, “The Small Business Economy for Data Year 2005: A Report to the President,”
U.S. Small Business Administration, Washington, D.C., Chapter 6, “Economic Gardening: Next Generation
Applications for a Balanced Portfolio Approach to Economic Growth,” December 2006, 157-193,
<http://www.sba.gov/advo/research/sbe_06_ch06.pdf>.
Page 9
October 2010
dollars.
 Focuses on small companies that have the capacity and intent to grow.
value to them and that they are willing to invest in such services.
 Acknowledges that the economic strategy to provide targeted support to skilled entrepreneurs
is aligned with quality-of-life and place-making strategies.
For Michigan, the developmental work and diversity of approaches mean that the state can draw
on many ideas that have emerged and to some extent have been tested in the field. While
Michigan should learn from these previous efforts, its work on economic gardening should also
inform the field. In a sense, there is a budding community of economic gardening research and
development. The Edward Lowe Foundation, based in Michigan, has cultivated the emergence
of that community, and Michigan can and should become a leading contributor to it.
Data on Economic Contributions of High-Growth
Companies
Small businesses have for decades been seen as a major engine for economic growth; during
some periods, such businesses have been cited as accounting for all net job growth in the state.19
Michigan has, by the most conservative measure, about 230,000 small businesses, and a subset
of them account for a large share of job growth; in fact, between 2001 and 2008, most reported
either no change or declines in employment.20 According to Dane Stangler of the Kauffman
Foundation, “Buried within the universe of companies are those firms that occasionally break
away from the pack and create an extraordinary number of jobs . . . . Just 1 percent of
19
Dane Stangler and Robert E. Litan, “Where Will the Jobs Come From?,” Ewing Marion Kauffman Foundation,
November 2009, <http://www.kauffman.org/uploadedFiles/where_will_the_jobs_come_from.pdf>.
20
Public Policy Associates, Incorporated, “Small Business Barometer 2008-IV Wave 58: Final Report,” December
2008.
Page 10
October 2010
companies . . . generate 40 percent of jobs in any given year.”21 Most of the 1 percent, he points
out, start out small and young. Michigan data are consistent with this analysis.
It is clear that not all small companies grow. Many business owners are content with a steadystate business model, once their company is able to provide a reliable and adequate income.
Others operate businesses in local markets, such as independent dry cleaners or restaurants that
do not support larger enterprises.
The Kauffman analysis makes it clear that the real engine of successful economies is highgrowth firms; therefore, a community that can increase the number of such firms is far more
likely to prosper than one that does not. For Littleton,
Colorado, this led to an epiphany: what matters are small
companies that will become larger. Says Christian
Gibbons, Director of Business/Industry Affairs for
Littleton, “. . . [W]e got out of the small versus large
debate. The real issue was about rate of growth.” Since
The Kauffman analysis
makes it clear that the
real engine of successful
economies is high-growth
firms, a small subset of all
businesses.
the number of firms that truly drive growth is small,
cultivating and nurturing them is far more feasible than attempting to aid every small company.
Since this notion runs counter to decades of conventional wisdom and popular economic
mythology, it is obvious that public policies aimed at economic development through the
cultivation of small business must change, too.
Thus, the economic gardening model articulates an approach that is considerably different from
past efforts in that it:
1. Builds on the experiences and insights of experts across the nation who are working at the
2. Relies more on providing knowledge and expertise as valued services to companies and less
on providing tax dollars.
3. Focuses on small companies that have grown rapidly or intend to do so.
21
Dane Stangler, “High-Growth Firms and the Future of the American Economy,” Ewing Marion Kauffman
Foundation, 2010, 5.
Page 11
October 2010
4. Emphasizes a market-based role for the public sector, rather than one that focuses principally
5. Assumes that business owners are smart enough to decide which services are likely to have
value to them and that they are willing to pay for services that have value.
It is very clear that Michigan’s current economic development strategy does not reflect this
analysis of how economies grow. The public demands that government “do something,” and the
current approach lets public officials say they are. The total investment in that strategy,
however, is not justified by the results. The opportunity to broaden our portfolio of tactics to add
the tools of economic gardening will never be more palpable or urgent.
Potential Benefits to Michigan
The elements of an economic gardening strategy for the state of Michigan will be described in a
later section of this paper, “A Michigan Economic Gardening Strategy,” beginning on page 19.
However, we posit that if proper attention and
resources are dedicated to this strategy and it is
implemented effectively, numerous potential
benefits to the state will materialize.
Economic gardening utilizes
and supports homegrown
entrepreneurial talent and
existing knowledge resources.
First, economic gardening utilizes and supports
homegrown entrepreneurial talent and existing knowledge resources. By providing growing
businesses with the services, networks, and support they need, we will be building the base of
our new economy with businesses that are already in existence and growing in Michigan. We
know that we have existing businesses and industries in the state that are growing; we need to
take advantage of these resources and nurture their growth. Moreover, this strategy has the
potential to harness the energy that the public and State are putting into encouraging our citizens
to “buy local.” This movement springs from small but strong grassroots campaigns to support
Michigan businesses and industries. If the State makes a public commitment to develop our own
homegrown, in-state businesses, the public response is likely to be quite supportive.
Along those same lines, an economic gardening strategy supports and refocuses our existing
local resources. Our current practice of luring outside businesses to the state revolves around
Page 12
October 2010
using state resources to court these outside players. With economic gardening, part of the
resources harvested in Michigan would be put to work on Michigan companies. This represents
another level of “buying local”: state and private resources that are “locally grown” will “feed”
local businesses.
Another potential benefit is the infrastructure and culture change that will emerge from this
strategy. Michigan’s economy, for better or worse, is rooted in the auto industry, which shaped
the state’s economic structure into one that relies on large
Another potential benefit
is the infrastructure and
culture change that will
emerge from this strategy.
businesses to succeed. A business attraction mentality can
easily lead to the perceived notion that bigger is better; that
we need just a few particular industries to get the state back
on track. Thus far, however, that has not appeared to be
true. No industries have emerged to fill the massive gap that the auto industry has left behind. It
is time for the state to address the culture that dictates that mega-corporations will eventually
solve all of our problems and the resulting infrastructure that supports mainly such businesses.
An economic gardening strategy, if successful, will build upon the groundwork that has been laid
for small businesses to be successful and shift our business culture to one of entrepreneurialism.
Perhaps success in this transition would be best signaled by this change: college graduates and
mid-career migrants from the corporate world who launch their own firms would be seen as local
folk heroes and role models. Cynthia Kay puts it even more powerfully. She envisions a future
in which, “. . . a young person gets a job at a big company and everyone asks them: ‘What’s
wrong with you? Why haven’t you started your small business yet?’”
Along the same line, it stands to reason that if a culture of entrepreneurialism is established and
grows with the state, Michigan may become more attractive to young professionals. As noted
previously, economic gardening can be a catalyst that unifies efforts around entrepreneurialism
and place. It will be synergistic with current new economy initiatives that include strategies
focused on creating attractive welcoming places with great social, natural, entrepreneurial,
creative, and intellectual capital.
As businesses grow, they provide employment that attracts and anchors people who need
housing, as well as shopping, entertainment, arts and culture, and many other amenities that
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October 2010
contribute to economic vitality. In an entrepreneurial culture, the people creating and growing
those businesses will be from and of our communities, which makes them far more likely to
remain than business owners who were attracted by the latest tax incentive. Microsoft is in
Redmond, Washington, not because of tax incentives, but because Bill Gates is from and of that
community.
Another potential benefit of the economic gardening strategy is that it may better leverage
investments of state tax dollars. One illustration of this
benefit is a comparison with the film tax credits that are
being offered to films being produced in Michigan. To
entice movie production in Michigan, the State provides a
tax credit of up to 42 percent of the film’s production
costs.22 These credits, while successful at luring film
An economic gardening
strategy can serve as the
basis of providing
industry-specific, external
information to secondstage companies.
production companies to make movies in the state, may
not be as successful as previously hoped when their financial contributions to the local economy
are evaluated. A recent report by the Senate Fiscal Agency reports that $37.5 million in tax
credits were awarded to the film industry during the 2008-2009 fiscal year; however, the report
estimates that only about $4 million in additional tax revenue was sparked as a result of the film
industry.23 A significant number of tax dollars have been dedicated to this industry thus far;
perhaps investing a small fraction of such resources in local industries and businesses would
yield a better return on investment of state tax dollars.
Through a study conducted by Public Policy Associates,
Incorporated (PPA) in June 2009,24 second-stage
business owners reported that many are quite open to
acquiring outside resources to support their efforts to
These are services that
business owners
themselves have identified
as useful to their
continued growth and
success.
grow. An economic gardening strategy can serve as the
22
Dan Bobkoff, Niala Boodhoo, and Kate Davidson, “Changing Gears: The Film Factory,” Michigan Radio,
September 20, 2010,
<http://www.publicbroadcasting.net/michigan/news.newsmain/article/0/0/1702530/news/Changing.Gears.The.Film.
Factory>.
23
David Zin, “Film Incentives in Michigan,” Senate Fiscal Agency, Lansing, Mich., September 2010,
<http://www.senate.michigan.gov/sfa/Publications/Issues/FilmIncentives/FilmIncentives.pdf>.
24
Public Policy Associates, Incorporated, “Second-Stage Business Research,” Lansing, Mich., June 2009.
Page 14
October 2010
basis of providing such resources to second-stage companies. The strategy outlined in the next
section of this paper illustrates one aspect of economic gardening by describing two specific
services (a company analysis and customized market research) to second-stage business owners
that they will be able to utilize for a reduced fee at their own pace. These are services that
business owners themselves have identified both through the PPA research and testing by the
Edward Lowe Foundation as useful to their continued growth and success. It can only benefit
Michigan to be able to tell the business community that the State is being responsive to the needs
it has expressed.
A related benefit is that, by organizing the market for services designed to help firms grow
successfully, new capacity and capability will emerge to meet the needs of this market. In other
words, the service provider community will become larger, stronger, and more skilled as they
work with substantial numbers of companies. This can create a perception of Michigan as a
place that not only values fast-growing companies but has the private-sector resources to help
them do so successfully.
Michigan has the
potential to be a leader in
economic development at
the state level.
Finally, a potential benefit that may arise from undertaking
an economic gardening strategy is that Michigan would be
seen as a leader in research-based economic gardening.
While an economic gardening strategy has been in place in
different locales across the country for years, if it is implemented as proposed, Michigan would
be the first state in the nation to fully integrate economic gardening into the core of its economic
development strategy and to root its ongoing development firmly in data that indicate what
works, what does not, and how to improve. Michigan has the potential to be a leader in
economic development at the state level. This could result in positive national publicity for the
state that could help retain and attract people who wish to be part of such a movement.
Limits to What We Know
As previously stated, this paper lays out the blueprint for an expanded economic development
strategy: the service-delivery framework, the strategy’s customers, assets to the strategy, roles of
principal players, elements of the strategy; and financing of the strategy. While we present a
Page 15
October 2010
framework of an economic development strategy via this paper, it will become clear that there
will still be many details to be developed. The purpose of this paper is not to examine every
detail, but to propose a well-conceived strategy that can contribute to meeting the needs of the
state. Thus, there are some limitations to this blueprint.
First, it is unclear as to how many companies will ultimately be participants in the economic
gardening strategy. As noted in the Customer Base section of this paper, companies that will be
targeted for these services are second-stage firms, that is, those that have sales in the range of
$750,000 to $50 million, 10 to 100 employees, and the specific intent and capacity to grow.
According to the Edward Lowe Foundation, approximately 1 to 3 percent of firms fit those
criteria.25 In Michigan that would be approximately 2,300 to 6,900 companies. Although our
market research has indicated that there is considerable interest among second-stage business
owners in the products that this strategy will offer, it is not yet known how many of these
businesses will choose to use them.
Another limitation that may be encountered is that some services offered to businesses may
ultimately be more valuable than others. The services that will be initially offered are those that
are understood to be needed based upon developmental work by the Edward Lowe Foundation
and data collected by the June 2009 PPA study of second-stage business owners. However, in
reality, there may be other services that business owners may find more valuable; along the same
line, highly valued services may vary by region throughout the state, that is, a service seen as
necessary in Northern Michigan may not be in high demand in Southeast Michigan. This
recognition supports the notion that a pilot test of the economic gardening strategy would be
sensible prior to a full-scale rollout. Continued assessment of the value and necessity of the
available services, marketing approach, and delivery system will be critical to this strategy’s
success.
While the evidence for the role of high-growth small firms in economic growth is clear, the link
between economic gardening and acceleration of such firms is not. For that reason, we suggest
that the strategic direction described in this paper be thoroughly documented and evaluated to
determine its effectiveness. If it has the expected effects, that research will allow the approach to
25
Edward Lowe Foundation, <http://www.edwardlowe.org/index.elf?page=about&function=mission>.
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October 2010
serve as a model for the nation. If not, it will support further decisions regarding how to improve
the strategy.
Finally, there is still a question as to how the State’s role in this strategy can be crafted to support
a large-scale rollout. Clearly, the initial offerings of the economic gardening toolbox cannot be
available to every second-stage business in the state. However, the hope is that in time they will
be. To that end, as the State moves forward with this strategy it will need to consider an
implementation strategy that would support scaling it up to meet market demand.
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October 2010
A Michigan Economic Gardening Strategy
A key to Michigan’s future lies in its ability to support and stimulate the growth of high-potential
companies. Doing so will entail a shift in the state’s philosophy of economic development and a
commitment to operationalizing that change throughout state government. The specific services
described below are illustrative of these changes, but not an exhaustive description of them.
Through a Michigan Economic Gardening Partnership, the state will capitalize on key roles that
State government, local business support entities, and private service providers can each play
most effectively. The local entities utilize their
This economic direction
for Michigan focuses on
strengthening small firms
that are positioned for
rapid growth.
knowledge of the local small business community to
identify and communicate with companies who have the
capacity and intention of creating new jobs through
growth. The State creates a large enough market to make
it affordable for the private sector to provide their
expertise at discounted rates that growing companies can afford. The State also acts as a
champion and market-maker, bringing all the parties to the table with the goal of brokering the
best deal for all involved.
Services and guidelines are developed by the state, with input from customers and local partners
to ensure that resources and services offered are ones that second-stage business owners value
and that will positively impact their growth trajectory. As time goes on, services not deemed
helpful or relevant can be dropped and new ones added to
meet current needs.
This new economic direction for Michigan focuses on
strengthening firms that are positioned for rapid growth. It
does not preselect industries or firms. Instead, the firms
select themselves based on the value that business owners see
This strategy does not
preselect industries or
firms; they select
themselves based on the
value they see.
in the offered services.26 This approach assumes that many of the firms that can power a robust
economic future are or will be here already and that helping them grow successfully is a path
26
During the pilot test, firms within the target market will be recruited proactively. It is unlikely that fees will be
charged for the services at that point, since the services will be in the developmental stage.
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October 2010
toward that future. A Michigan economic garden will nurture these existing companies, but will
also stimulate more individuals to launch their own growth-oriented firms, thus creating a
stronger culture of entrepreneurialism within the state.
Economic gardening broadens the focus from reducing costs through tax breaks, subsidized
training, and similar devices to improving competitiveness through increasing market
knowledge, management skills, and access to technology. Michigan’s economic development
strategy currently appears centered on compensating for deficits—real or perceived. Are our
taxes too high? Are our regulations too cumbersome? Is our workforce inadequately trained?
Political reality continues to dictate that we will continue to attempt to address these issues, as
we have done for the past quarter century; many would point out, for example, that in a bidding
war between the states over tax breaks for business attraction, it is foolhardy to disarm
unilaterally. Economic gardening allows Michigan to focus more intensively on strengthening
the assets of its growing businesses; it is quite different from a deficit-based strategy.
As noted above, the approach proposed here adds a new gardening philosophy and new tools to
Michigan’s current business attraction strategy. For those currently engaged in economic
development in communities across the state, these new tools will make their work relevant to an
additional cohort of businesses that have the potential to add significant economic activity to
their regions. It also positions others who work in business development to access very highvalue services for their clients.
The sections below present details on how economic gardening services would be delivered:
what they would look like; who the customers would be; how existing Michigan assets could
partner to develop, promote, and deliver the services; what the elements of the gardening
services would be; and, importantly, the financing issues of the strategy.
Service Delivery Framework
It bears noting once again that the service delivery framework described below is simply
illustrative of one important aspect of economic gardening. As Michigan adopts this new
philosophy and approach, it will also need to align the operations of several departments of state
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October 2010
government to it. The service delivery framework includes a set of principles, a description of
the customer base, and a summary of Michigan’s current assets that can be incorporated into
economic gardening.
Principles
The economic gardening strategy will be built on a set of six principles that together comprise a
framework that will guide the entire effort. These principles, which are articulated below, drive
all decisions about the exact shape and character of the strategy.
1. Research-based services. The specific services to be delivered through the economic
gardening strategy will be based on market research that provides clues about how to
improve the likelihood of rapid, successful growth among targeted companies. Thus, rather
than being driven by the latest fad or whim, they will be rooted in the best evidence available
from Michigan and across the nation about what works and how to deliver it effectively. The
experiences of other jurisdictions that have experimented with gardening strategies will be
scrutinized carefully, as will previous research conducted in Michigan. Going forward,
additional market research will be commissioned as appropriate to drive development of new
services and refinements of those already offered.
2. Private delivery. While the public sector will play a key role in organizing the economic
gardening strategy, private-sector providers will deliver all services. The advantages of this
are self-evident: private service providers are far more likely than public agencies to be
trusted by leaders of growing companies and must maintain their reputation by providing
excellent service to survive in the marketplace. These providers will be experienced,
competent firms that aim to deliver exactly what they promise, since their credibility affects
their future prospects. It will also be far easier to change providers in case some do not live
up to their promises.
3. Public market-making role. While the services are delivered privately, the state government,
as part of a Michigan Economic Gardening Partnership, will identify companies that might
benefit from gardening services and private providers who can deliver those services and will
match them together. They will make a market for a cluster of economic gardening services
where none has existed previously.
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October 2010
4. Fee-based services. A common practice for public-sector services is to assume that the right
price is zero. Some or all gardening services will be fee-based, with fees set to cover the
costs of private providers and to contribute to the costs of local partners. The state will
absorb the cost of developing the services and playing the market-making role, with the
reasonable assumption that the private and public
benefits that result from the services will support a
cost-sharing model of private and public
investment.
5. Self-selection. While the gardening services will
While the gardening
services will be carefully
crafted to provide
maximum value to small,
high-growth firms, they
will be available to all.
be carefully crafted to provide maximum value to
small, high-growth firms, they will be available to all. Instead of attempting to pick winners
and losers, it would allow business owners to self-select based on their assessment of the
likely value of the services. While the services would be marketed to those small companies
that intend to grow, they would not be closed to anyone. It is highly unlikely that a firm with
no intention to grow or one that already employs hundreds of workers would choose to buy
services not designed to be useful to them, but it will be their choice, not a matter of
eligibility or arbitrary selection. The assumption that those firms that fit the target would in
fact choose to participate will be carefully tested during the pilot phase and later rollout.
6. Market responsiveness. Michigan’s economic gardening strategy will launch with the
services that are described in detail below. The customer response to these offerings will be
monitored and assessed in real time to allow refinements to be added as warranted.
Additional services will be rolled out based on market demand and development of
appropriate delivery capacity. Overall, the strategy will stay as close to a private-sector
model as possible, recognizing that some differences are unavoidable and appropriate.
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October 2010
Customer Base
Every new venture must assess the size of its potential market, and the economic gardening
venture is no exception. While customers can self-select, the economic gardening services and
marketing strategy will be aimed at companies that have
The target market for the
economic gardening
strategy is roughly 2,300
to 6,900 high-growth
companies.
real potential to make a substantial and increasing
contribution to Michigan’s economic vitality.
According to the growing body of economic evidence
described above, a small fraction of businesses grow
rapidly and make a significant contribution to a state’s economy. Many of them are second-stage
companies, that is, businesses that have sales in the range of $750,000 to $50 million, 10 to 100
employees, and, perhaps most important, leaders with a specific intent and capacity to grow.
While other services, such as Small Business Technology Development Centers (SBTDCs) and
some chambers of commerce, provide assistance mostly to start-up and first-stage firms, those
companies are not the target market of economic gardening. Of course, some of these newer
firms may later become users and/or may act as providers.
A conservative estimate is that 1 to 3 percent of companies have these characteristics. In
Michigan, that translates to roughly 2,300 to 6,900 firms. Thus, the economic gardening strategy
will seek to identify companies within this target and market a set of services to them that can
accelerate their growth or increase the odds that they will grow successfully.
Current Assets
Michigan has an impressive infrastructure that must be
incorporated into the Michigan Economic Gardening
Partnership. This infrastructure includes the Michigan
Economic Development Corporation (MEDC), privatesector management consultants, business accelerators,
Michigan has an
impressive infrastructure
that must be incorporated
into the economic
gardening strategy.
economic developers, and the SBTDC network. It also
encompasses a world-renowned system of higher education that includes both public and private
institutions—community colleges and universities, business organizations, public libraries across
the state, and philanthropies such as the Edward Lowe Foundation. The Michigan State Housing
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October 2010
Development Authority (MSHDA) is unusual among its counterpart agencies in other states in
that it sees entrepreneurship and economic gardening as intimately related to its focus on creating
attractive places across the state. Clearly, these entities represent broad and deep capabilities that
could contribute to the success of an economic gardening strategy. Specific roles for several of
these potential partners are described below.
Market-making. The MEDC has been Michigan’s principal state-level economic development
organization. Over the years, however, it has not been asked to embrace an economic gardening
approach. Implementation of a broader approach, therefore, suggests that the role of the MEDC
could change to encompass new and different responsibilities and actions. It may be possible to
redeploy the assets of the organization to carry out a modified mission. It can be the entity that
leads, manages, and promotes Michigan’s economic gardening strategy. As such, the MEDC
would incorporate the economic gardening
The MEDC would incorporate
the economic gardening
philosophy and goals into every
aspect of its operation.
philosophy and goals into every aspect of its
operation. For example, MEDC’s cadre of business
development managers—the sales people of the
organization—would become an important
marketing channel for economic gardening services. The same would be the case for all other
MEDC functions: economic gardening would become as much a part of its core as is business
attraction. Thus, a substantial fraction of the MEDC budget would support economic gardening.
One completely new role for the MEDC would be as the market-maker for the types of highvalue services described in this paper, working through statewide delivery systems built around
the Michigan Economic Gardening Partnership. It would require equipping the MEDC staff with
the skills and expertise to provide a different mix of services. This role would entail:
1. Product development
a. Oversee research regarding the market for economic gardening services. This would
include research about similar efforts nationally and internationally, as well as specific
ongoing research about the needs of targeted companies in Michigan and how those
needs can be met.
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October 2010
b. Decide, in conjunction with an advisory board, what services will be provided. The
advisory board will consist of outside experts with strong knowledge about effective
support for growth-oriented companies. Largely driven by the results of the research, an
advisory board comprised of representatives of the Partnership, owners of current and
former second-stage companies, and others would provide insight about how needs can
best be met through modifications of existing services and development of new ones.
c. Develop services. The MEDC would use the market research and insights from the
advisory board to develop new services. This would include the initial service offered at
the launch of the gardening strategy and others that are justified by market research and
demand.
d. Improve services. The effectiveness of services will be judged by customer satisfaction,
growth in demand, and impact on business growth. Data regarding this measure will be
collected continuously, and services will be adjusted based on the findings.
e. Create credibility. In order to create credibility with a target market that is likely to be
skeptical of the value of high-quality services offered through a public-sector program,
each private provider will be required to offer a money-back guarantee. The MEDC will
look for additional means of convincing businesses in the target market that economic
gardening services have value and are worth trying.
2. Brokering
a. Define specific content for services. The nature of the engagement between privatesector providers and the business customers will be outlined by the MEDC. This will
allow the services to be marketed with a consistent message and delivered with consistent
results.
b. Determine processes for participation by private-sector providers, business customers,
and local partners. By designing the networks of providers and partners carefully, the
quality and consistency of services to customers can be ensured.
c. Recruit private-sector service providers through competitive processes to deliver the
services. This would include screening the providers to ensure that they can deliver
exceptionally high-quality services and eliciting discounts from them in return for access
to a market otherwise very difficult to reach.
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October 2010
3. Metrics
a. Set goals for program success in terms of quality, quantity, and impact By establishing
standards at the outset, the success of the services can be assessed objectively.
b. Monitor and review continuously. It is essential that the focus be on tangible results,
without embellishment, so that the MEDC and policymakers can make reasoned
decisions about what to continue, what to cut, and what to change.
4. Promotion/marketing channel development
a. Create demand for service through broad marketing campaigns. While, as noted below,
retail sales will be handled at the regional or local levels, broad awareness and brand
marketing will be organized by the MEDC. Since the number of targeted customers is
modest, mass media would not be used. Instead, the marketing campaigns will attempt to
reach the 2,300 to 6,900 potential customers through targeted media. These ongoing
campaigns will set the stage for the local sales efforts.
b. Develop/support local marketing and sales channels. While the services to be developed
and offered by the MEDC will provide high value to customers, research indicates that
they will not sell themselves. Thus, the MEDC will need to work through existing
entities to create marketing channels that can reach a substantial fraction of the target
market and achieve market penetration of 10 to 15 percent per year. These local channels
will be developed through a competitive process and will be supported with marketing
materials, outreach and sales assistance, and creation of a learning community. In
addition to a lead marketing partner in each region of the state, it will be important to
build constructive relationships with accountants and lawyers, many of whom currently
serve as advisors to firms that intend to grow. These relationships can be encouraged
through linkages with the Michigan Association of Certified Public Accountants and the
Michigan Bar Association, but they must ultimately be cultivated by local partners at the
local level.
Service delivery. A central tenet of the economic gardening strategy is that private consultants
will deliver the services to business customers. Consultants will be selected through a
competitive process, as described above, in which the bidders will compete on the basis of their
experience and expertise, as well as the depth of the discounts they are willing to offer in return
Page 26
October 2010
for access to the market created by the MEDC and the local partners. The role the private
consultants will play includes:
1. Delivery of top-notch service to participating companies. While the scope of services will be
consistent, each private consultant will bring unique expertise and experience to each
engagement.
2. Committing to availability to provide service in their
selected markets. Consultants will have the option of
providing services statewide or within regions. The
matching decisions would respect the service areas
specified by the consultants.
A central tenet of the
economic gardening
strategy is that private
consultants will deliver
the services to business
customers.
3. Offer an unconditional money-back guarantee for services provided. As noted above, this
strategy is intended to overcome the skepticism that companies may feel regarding a
government-sponsored service. It also demonstrates the confidence that service providers
and the Partnership have in the services.
A limited number of providers will be chosen to serve each geographic area in order to enhance
the program’s attraction for highly capable providers. There will be a strong preference for
companies with a Michigan base, but recruitment of the most capable firms for service delivery
will be paramount.
Local sales and oversight. Many of the infrastructure entities listed above could act as local
partners with the MEDC in the economic gardening strategy. Just as the MEDC currently
partners with local economic development entities across the state for traditional economic
development activities, it could do so with a range of entities to carry out several essential
functions that are best handled at the local level. For professional economic developers, this can
be a positive evolution of their role that better equips them to meet the needs of their customers.
These functions include:
1. Assisting in the identification of consultants. Many local entities are aware of or work with
providers who may be qualified to deliver services. Local partners could identify such
providers and urge them to compete for economic gardening contracts.
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October 2010
2. Delivering retail sales and marketing. Since many of the prospective partners already work
with individual companies, it may be mutually advantageous for them to make relevant
customers aware of the gardening services. This would equip the local partners with
additional services that may benefit their current clients and dramatically extend the reach of
the services beyond what the MEDC could achieve alone.
3. Matching companies with consultants. Once a company agrees to acquire gardening
services, a specific consultant must be matched with that company. The local partners, in
cooperation with the MEDC gardening staff, would provide the match. This would be based
on the industry of the company and the consultant and the specific issues facing the
company.
4. Providing market intelligence. Because of their relationships with companies in their areas,
local partners can provide insights that would be difficult to gain otherwise.
Within this framework, it is possible to build an economic gardening strategy in a variety of
ways, as has been demonstrated in several states. The following section provides an example of
what some elements of a Michigan economic gardening strategy could be and how they would
be developed and fielded. Again, the description is illustrative, not exhaustive. It is intended to
demonstrate how the principles described above could be operationalized using new and
available assets to serve a critically important customer base. As Michigan goes forward, it will
learn from the experience of other states and local governments; it will also take full advantage
of the knowledge that has been accumulated by the Edward Lowe Foundation. Conversely, the
state will contribute to advancement of the economic gardening field by documenting and
sharing its experiences.
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October 2010
Possible Elements of an Economic Gardening Strategy
The mechanics of an economic gardening strategy must be thought through carefully before
services can be delivered to companies. In this section, several of these mechanical elements are
summarized.
Initial Services
An economic gardening strategy can include any number of services, but when launching a new
enterprise, it is wise to limit the initial product offerings to a small number so that procedures can
be tested at a modest scale. These initial offerings will be
Specific services at launch
for Michigan’s economic
gardening strategy are
based on experiences
around the nation and on
research in Michigan.
tested, along with the marketing and delivery systems, as
part of a pilot test that will involve perhaps 100 to 150
companies. As systems are proven and staff gain
competence and confidence, additional services can be
added as warranted by market conditions. Specific
services at launch for Michigan’s economic gardening strategy are based on experiences around
the nation, many of which have been supported by the Edward Lowe Foundation, and on
research conducted by Public Policy Associates, Incorporated in 2009. They include:
1. Company analysis.27 At the outset, an engagement team connects briefly and efficiently to
each company to gain a better understanding of the critical issues currently at play. Those
critical issues are often the symptoms of key growing pains that are going unnoticed or
untreated because of the pace of business activity. The team will quickly provide insight
regarding the quality of the tools that might address the issues identified.
The team will focus on four key strategic issues: Core Strategy, Market Dynamics,
Marketing Leads, and Management Teams.
● Core Strategy – Dealing with changes in strategic direction, the business model, and
opportunity development.
27
Mark Lange, “Economic Gardening: Speed and Insight Make the Difference,” The Edward Lowe Foundation, n.d.
This entire section draws heavily on the resource cited here.
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October 2010
● Market Dynamics – Involving the unique relationship between the company, its
customer, and its industry.
● Marketing Leads – Identifying and finding markets and customers to match the company
as it evolves.
● Management Team – Issues around the changing role of the entrepreneur and his or her
team as the company grows.
Both the team and the process will be designed to look and act like the entrepreneurial
companies they serve. They will employ cutting-edge tools and business analysis concepts
that are relevant, responsive, and adaptive.
Each engagement will be unique, not following a set pattern. The team will “catch up” with
the entrepreneur in terms of company, product, and industry knowledge before applying their
expertise to the specific needs that have been revealed.
2. Customized market research. A centerpiece of the Littleton work and work in states like
Florida, Georgia, and Wyoming is providing growth-oriented firms with high-quality market
research. Such research requires access to a variety of costly proprietary data sources, and
they are simply out of reach for small companies. Experienced consultants work with
companies to help them access, analyze, and use the intelligence they gain about their current
and potential markets. This process is more systematic, focused, and intensive than what
most business owners could carry out alone or with in-house staff.
SBAM has experimented with delivery of such services in two Michigan counties. Although
it is too early to gauge results in terms of job growth, the project director reports that,
“Preliminary findings from the work completed so far indicate that providing growthoriented companies (‘intent to grow’) with high-level market research is a good way to
enhance their ‘capacity’ for growth. A Regional Economic Gardening Support Service
allows the high cost for market research to be spread across multiple cost centers, thus
lowering the costs for individual projects. It also allows a project to secure sponsored
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October 2010
funding for a regional effort versus having to find funding to subsidize individual market
research projects.”28
This service would include an engagement with an experienced marketing consultant for 40
to 50 hours of professional time. The time would be spent conducting primary and secondary
research to support a thorough analysis of the strengths and weaknesses of the current
markets in which the client company operates and a listing of potential new customers and
channel partners. Finally, the report will include recommendations for specific actions to be
taken by the company to implement the report.
Process for Companies
The local partner would typically be the first contact between the gardening service and the
customer. When a company is targeted as a potential customer, the local contact meets with its
leadership to outline the program’s benefits. If the company and local contact determine that the
company is a good fit for the program, they complete a brief application that provides the basis
for the work by the engagement team. Next, the engagement team leader meets with the
company to determine whether there is a good fit between
the two. If there is, then an agreement is signed between
the company and the State.
As the process unfolds, the engagement team gathers the
needed information from the company and other sources.
When a company is
targeted as a potential
customer, the local
contact meets with its
leadership to outline the
program’s benefits.
The team then analyzes the data and develops a report that
includes findings and recommendations. The report is then presented in a face-to-face meeting
with the customer.
Pricing
Pricing of the services reflects the notion that any public investment in private businesses must
be somehow related to the prospect for public benefit. This drives the decision on how the costs
of the services would be shared between the public sector and the private users of the services. If
a small company uses the services and provides more jobs or grows more quickly than it would
28
Mark Clevey, memo, addressed to Jeffrey Padden, June 29, 2010, Summary of SBAM RBEG Projects.
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October 2010
have otherwise, it is clear that the public benefits from the availability of more jobs, more tax
revenues, and more wealth. Such growth may also strengthen the overall economy, which can
lead to an upward cycle of prosperity. There are also private benefits. The owners of the
company will likely earn more income and benefit from owning a more valuable asset. Since
both the public and private sectors benefit from the results of the services proposed here, it is
sensible that both should invest in them.
In principle, this cost-sharing should be in rough proportion to the public and private benefits. It
is difficult, however, to estimate that ratio, since the results will not occur for some time. The
path of growth is uncertain under the best of conditions. Some companies will grow more than
others, some will provide more high-wage jobs, and so forth. In addition, there are other factors
that affect the price that business customers would pay. Pricing of public services to businesses
must take into account the effect of various price points on the perceived value of the service; if
it is underpriced, some prospective customers may believe it is “cheap,” not just inexpensive.
Also, in Michigan’s current fiscal environment, the ability of government to invest even in
activities likely to have a long-term benefit is limited. In sum, the price should reflect the value
to the public and private sectors, be attractive to prospective customers, and be feasible for
government.
For the economic gardening services, the split between private investment and public investment
will be fairly simple. The State will absorb the costs of the
MEDC staff assigned to lead the initiative, and customers
will pay the discounted costs of the consultants. The costs
of the local efforts would be partly offset by a percustomer fee that the companies would pay through the
consultants. .
A strong focus on
choosing quality providers
and a process that is
customer friendly are
important components of
the marketing process.
Private providers who will participate in the engagement teams and other services will bid on the
opportunity to participate. It is expected that fees to provide the standard services will be
Page 32
October 2010
reduced by an average of 40 percent.29 The advantage to private providers that would elicit such
discounts is the access to clients with dramatically reduced marketing costs.
Marketing Strategy
Marketing the gardening strategy effectively is key to its success. Companies in the 2009 Public
Policy Associates, Incorporated research indicated that quality of the service is the most
important determinant of their level of interest, so a strong focus on choosing quality providers
and a process that is customer friendly are important components of the marketing process.
The State will provide overall marketing support with a Web site, social media, press releases,
and promotional materials to support the local staff who will be the primary contacts with
companies. Since the local staff are closest to the potential customers and are probably already
working with many of them in other ways, they have credibility and knowledge of companies
that will be best suited and most interested in participating.
Scale
In order to have meaningful economic impact, the gardening services must touch a substantial
fraction of the targeted companies. As noted in the above section on Customer Base, it is
estimated that the services will be delivered to 500 to 600 companies per year. This represents
10 to 15 percent of the target market. In order to achieve this ambitious scale, the gardening
efforts will take advantage of state-level economies of scale and local knowledge. Thus, it will
be a combination of a centralized and decentralized
system, with the right entities playing the right
roles. To play the State role effectively at this scale,
a dedicated staff would be required. The rate at
which the program can be ramped up will depend
on the timing of hiring capable staff, creating strong
The rate at which the program
can be ramped up will depend
on hiring capable staff, creating
strong local partnerships, and
finding highly qualified private
providers
local partnerships, and finding highly qualified private providers with the capacity to serve these
companies, in addition to developing an appropriate marketing message that is appealing to the
target companies.
29
In some of the economic gardening work supported by the Edward Lowe Foundation, consultants have discounted
their standard fees by 40 percent to $105.
Page 33
October 2010
Financing
In the simplest of terms, there are three cost categories for the gardening strategy: State costs,
local costs, and private-provider costs. The State cost for staff and local partners during the pilot
phase, and a modest marketing budget will need to be incorporated into the current MEDC
budget or financed through new appropriations. In addition, the repurposing of many MEDC
operations to incorporate the gardening mission and strategy will mean that funds will be
repurposed, as well. This does not require new appropriations or funding streams, but may
require adjustments in the MEDC’s authorizing legislation.
For the local partners, the marginal cost is modest. Most would be incorporating their gardening
roles into work they already do and are paid for from public sources. Still, some costs would be
new, so local entities would be paid a fee for each customer they recruit to use an economic
gardening service.
Ultimately, fees to private providers would likely cover 100 percent of the costs of private
consultants and of the local fees. Needless to say, this funding model is very different than most
services organized by state governments.
Page 34
October 2010
Options for Implementation
With as many partners as will be involved in the economic gardening strategy, there will need to
be strong leadership on the state level to ensure that this program is seen as legitimate and
wholly supported by the state. Implementation with strong support from the top will require
careful coordination of and cooperation among multiple departments of state government and
other public and private agencies and organizations.
Governor’s Office
The governor-elect’s transition team and administration will play a key role in unveiling the
strategy and providing leadership at the onset and implementation of this strategy. It is critical
that there is buy-in from the governor-elect so that the strategy will be supported and promoted
as a positive step forward in the state’s economic development undertakings. We envision the
governor-elect’s transition team planning for implementation and the governor’s administration
carrying out that plan. In Florida, Governor Charlie Crist strongly and publicly endorsed
economic gardening, which undoubtedly contributed strongly to the legislative appropriation that
ensued.30
The governor-elect and his transition team will be briefed on this blueprint and asked to make its
implementation a high priority. We hope to work closely
with the transition team to ensure that the implementation
strategy is supported by the governor’s office. One
important task will be to work with the transition team to
organize and prepare for the new role for the Michigan
Economic Development Corporation (MEDC) to support
The governor-elect and
his transition team will be
briefed on this blueprint
and asked to make its
implementation a high
priority.
the strategy and dedicate a small staff to perform the MEDC’s role as previously mentioned.
Critical to that step is to appoint a chief executive officer (CEO) for the agency that fully
embraces economic gardening.
30
Office of Governor Charlie Crist, “Economic Gardening Stimulus Plan Targeting Florida’s Small Businesses,”
n.d., <http://www.flgov.com/otted_econstimplan>.
Page 35
October 2010
After the incoming governor has taken office, he will be asked to designate a point person to lead
implementation of the economic gardening strategy. Key leaders in his administration will be
briefed on the strategy and asked to make economic gardening a central message in the State of
the State address and include resources for it in the executive budget recommendation to the
Legislature. During the briefing, the governor’s office will be presented with other options for
what the governor’s role could be within the economic gardening strategy.
Legislature
It will be important to involve the Legislature in the implementation process for the economic
gardening strategy. The Legislature will be relied upon to appropriate resources to the MEDC
and other relevant state agencies as well as to provide leadership on the implementation process
itself. The first task will be to brief incoming leaders in both houses and of both parties. Next
will be one-on-one briefings of committee chairs and minority vice-chairs. We envision key
committees to include:
 Senate Appropriations Committee
 Senate Committee on Economic Development & Regulatory Reform
 Senate Commerce & Tourism Committee
 House Appropriations Committee
 House Commerce Committee
 House Committee on New Economy & Quality of Life
 Other relevant committees
Members of those committees and other key legislators will be briefed in small group settings.
All legislators will receive written communications about economic gardening.
If it is necessary, options for legislation will be presented to key legislators. Some examples of
this might be if there needs to be legislative action to amend the authorizing statute of the MEDC
or crafting of specific appropriations boilerplate language.
Page 36
October 2010
The Michigan Economic Development Corporation
As the MEDC will serve as a key partner in the economic gardening strategy, successful
collaboration with them from the beginning of the implementation process will be critical. Thus,
the MEDC will be consulted about its preferred role in the economic gardening strategy. It will
be important for the CEO of the MEDC to be fully engaged in the strategy from the outset, from
briefing key leaders in the MEDC on the economic gardening strategy framework to, later on in
the implementation process, ensuring that the MEDC’s resource needs are met. The MEDC can
also play a crucial role in encouraging its network of economic development professionals to
embrace and participate in the gardening strategy.
Communication of Implementation
There are a few key communication activities that should take place in order to ensure that this
strategy will be fully understood at the beginning of the implementation process. The first
communication task will be for the governor’s office to hold a press conference announcing that
the State will be undertaking the economic gardening strategy. If possible, it would be helpful if
members of the Michigan Economic Gardening Partnership—which would include
representatives from the MEDC, the Small Business Association of Michigan, universities and
community colleges, the Small Business and Technology Development Centers, the Edward
Lowe Foundation, other economic developers, and other business groups—were standing with
the governor during the press conference to show their support for the strategy. Preparation for a
media announcement would include development of appropriate branding, a press release, and a
press kit regarding the economic gardening strategy.
A powerful communication tool for the Governor is issuance of a Special Message to the
Legislature. Through this vehicle, the Governor can speak at more length than through the State
of the State address on an important topic such as economic gardening, and he can use it to set a
legislative agenda for action on it.
Finally, business writers and editors will be visited by key partners in the strategy to educate
them about the framework and goals of the strategy. It will be important to disseminate
Page 37
October 2010
information about the strategy to the press and other influential business writers and editors in
order to get positive public relations coverage.
Page 38
October 2010
Assessing Success: Research
Perhaps one of the most important elements of the strategy will be to measure its progress.
Appropriate evaluation of the outcomes of the strategy will be essential in not only the scale-up
of the strategy, but also in the continued support by key stakeholders and public officials. We
recommend that the effectiveness of the strategy be measured from the beginning. At the outset,
this can include: tracking the progress of participating companies, encouraging program input
from participating companies, conducting a public tracking survey of the entrepreneurial culture
and environment, and measuring trends in entrepreneurial activity.
Over the longer term, the growth patterns of participating and similar but nonparticipating
companies should be compared to determine whether use of economic gardening tools results in
faster, more sustainable growth than is the case
without it. Tracking the development of
companies participating in the services offered
through the economic gardening strategy will most
likely be the most meaningful measure of how this
initiative is progressing. It will be best if a group
Appropriate evaluation of the
outcomes of the strategy will be
essential in not only the scale-up
of the strategy, but also in the
continued support by key
stakeholders and public officials.
of nonparticipating companies can be tracked as well during this time to use as a comparison
group, but if that is not possible, merely tracking the progress of the companies that do
participate will provide great information to everyone involved in the strategy. The four main
areas that will be tracked are:




Customer satisfaction
Sales
Jobs created
Investment
Satisfaction of participating companies with the program overall will be tracked to ensure that
companies are receiving the type and quality of services that were promised in a timely manner.
Variations within satisfaction could trigger a shift in either the providers or the structure of the
program. Trends in sales, jobs, and investment will give key partners an indication of whether
Page 39
October 2010
this program has been a positive influence on the health and well-being of the company’s
financial status.
Another success assessment will be to check in annually or possibly bi-annually with
participating companies and service providers to get formal feedback from them concerning
services that are being provided. Companies and service providers alike will be asked to identify
services that they find unnecessary, services that are vital and worth keeping, and any additional
services that they would find essential to their business operation and continued growth.
Soliciting this information from both the provider and user sides will afford a more
comprehensive view of what is happening at the
ground level in this program. It will also serve to
carefully monitor service providers and ensure that
there is a level of quality control built into the
process.
It will also be vitally important to ask each customer
Companies and service
providers alike will be asked to
identify services that they find
unnecessary, services that are
vital and worth keeping, and
any additional services they
would value.
to assess the quality of the service providers with
whom they work to ensure that the highest possible quality is maintained in the pool of
providers. With direct customer feedback of this kind, the process for recruiting and continuing
contracts of providers can be continuously refined.
As previously stated, one of the potential benefits of implementing an economic gardening
strategy will be that the state may shift from a culture that revolves around large businesses to
one that is focused on entrepreneurialism and expanding the positive environment for
entrepreneurs. To this end, we propose a public tracking survey of Michigan’s entrepreneurial
culture and environment. Not only will the public be queried on the state’s culture, but they will
also be asked to respond to questions concerning sense of place and environment for growing
businesses.
Finally, we propose to measure trends in the overall entrepreneurial activity within the state over
a number of years. An existing benchmark that can be used to assess progress is the Michigan
Entrepreneurial Score Card. This publication “. . . ranks and rates the entrepreneurial activity of
Page 40
October 2010
all fifty states,”31 and it has been published annually since 2005. Some traditional measures will
also be used, such as the number of business starts and closures, so that Michigan can be
compared with other states. More important, however, is to use more sophisticated indicators of
the contribution of high-growth firms to Michigan’s economic health. This means examining the
net number of jobs created by high-growth firms that are the target of the economic gardening
strategy. It is hoped that, in addition to stronger performance by the direct customers of the
gardening tools, other firms would benefit from the increasing expertise of the private-sector
service providers. By tracking these indicators of entrepreneurial activity over a number of
years, we will be able to detect patterns that may emerge. The data will also be used to
continually analyze and adjust the gardening strategy.
At the bottom line, research—not ideology or self-interest—must drive decisions about
Michigan’s economic development strategy and the role gardening plays in it. If we constantly
assess what is working, how well, and at what cost, we can make informed choices about what
tools to expand, what to contract, and what to eliminate. That constant refinement can only
benefit the Michigan economy and people.
31
Small Business Foundation of Michigan, The Michigan Entrepreneurship Score Card 2009-2010: Toward an
entrepreneurial economy, 2010, 7.
Page 41
October 2010
Propelling a
New Economic Direction
for Michigan
July 2010
Prepared for the
Prepared by:
119 Pere Marquette Drive
Lansing, MI 48912-1231
(517) 485-4477
Fax: 485-4488
July 2010
Table of Contents
Acknowledgements...........................................................................................................i
Introduction and Background ..........................................................................................1
Services Valued by Growth-Oriented Business Owners .................................................7
An Economic Gardening Strategy ...................................................................................9
Information ..................................................................................................................9
Infrastructure..............................................................................................................11
Environment...............................................................................................................14
How Michigan Can Benefit ...........................................................................................15
July 20, 2010
Dear Reader,
We are all aware of the current state of Michigan’s economic climate. For years, we have been
dependent on a few very large companies to provide the majority of jobs to workers in our state.
When those companies experienced hard times, the bottom fell out of our economy. Today, we
are in a unique position in our state’s history; we are in the position now to choose the economic
development strategy most likely to strengthen our faltering economy and provide great jobs to
the people of Michigan. We at the Small Business Association of Michigan are dedicated to
leading the way in this effort to improve our state.
This paper, “Propelling a New Economic Direction for Michigan,” outlines the approach that I,
along with others, believe will be successful in rebuilding our economy. While we see
Michigan’s current economic development strategy as an important part of the future, we believe
it is time for a significant shift in emphasis, one that adds another critical dimension to it. This
approach would temper the public sector’s traditional role of seeking out industry and business
from outside the state to come to Michigan via tax credits and incentives. Furthermore, it would
add a new role of cultivating the state’s environment to welcome and nurture small, high-growth
businesses that are proven to be the true job-makers. This cutting-edge approach, which is being
tested in a few areas around the country, is known as “economic gardening.”
We appreciate the financial support for the research that has made this paper possible. Without
the steadfast partnerships from the Edward Lowe Foundation, the Michigan Economic
Development Corporation, and the Small Business Foundation of Michigan, the paper could not
exist.
The paper in front of you is only a starting point. In addition to presenting a research-based
strategy for Michigan’s economic future, it also poses a number of questions for your
consideration. The answers to these questions and the feedback you provide to me will inform
the next phase of this research, which will be shared with the new administration after the
November general election. Please call me at (800) 362-5461 or e-mail me at
[email protected] to share your thoughts and responses to this paper. I look forward to
working with you on this important project for Michigan’s economic future.
Sincerely,
Robert D. Fowler
Acknowledgements
This paper was prepared for and in collaboration with the leadership of the Small
Business Association of Michigan. It is based on original and secondary research by
Public Policy Associates, Inc. (PPA) and on the experience of the principals in small
business policy and entrepreneurship over the past 25 years.
The PPA research on second-stage companies, which laid some of the groundwork for
this paper, was supported by the Edward Lowe Foundation, Michigan Economic
Development Corporation, and the Small Business Foundation of Michigan. The
support of these organizations is very much appreciated.
Funding for this paper was provided entirely by the Small Business Foundation of
Michigan.
The authors, Jeffrey D. Padden and Dana Swaney Frederick of Public Policy
Associates, Inc., appreciate the support provided by the funders, without which the
paper would not exist. Any factual errors it may contain are solely the responsibility of
the authors.
A New Economic Direction for Michigan Page i
July 2010
Introduction and Background
Throughout the first decade of the new millennium, Michigan has experienced an unprecedented
economic decline. After a century of prosperity centered around automobile manufacturing, the
domestic auto industry collapsed and with it Michigan’s economic core. Efforts were undertaken
throughout the decade to revive that industry, but no credible observers believe that the auto
industry in Michigan will regain its peak level of employment. Nevertheless, specific tax breaks
and a whole new business tax structure were aimed in that direction.1 Efforts to attract or even
retain manufacturing firms consistently failed to achieve the hoped-for levels of success. A
recent analysis of tax credits issued by the Michigan Economic Growth Authority (MEGA)
shows that, on average, only 294 jobs were created of each 1,000 jobs expected.2 Most would
agree, however, that the MEGA process, which does not pay tax credits until jobs are actually
created, avoids many of the pitfalls of programs in other states. In fact, a detailed estimate by the
W.E. Upjohn Institute for Employment Research shows that, while MEGA is modest in scale, it
is a cost-effective means of using tax credits to stimulate job creation and has resulted in net job
creation.3 Clearly, though, these efforts to stimulate economic growth through tax credits have
been less successful than hoped.
While its objectives are laudable and well-intentioned, the Michigan Economic Development
Corporation (MEDC) takes a conventional approach to attracting new companies to Michigan
and conducting retention visits with current employers. Those visits, however, serve mostly as
an early warning system for companies that may be considering moving out of state or laying off
workers. They do not provide companies with the tools to become more competitive or to grow
successfully. Thus, the economic development strategy of the State of Michigan has simply not
had sufficient power to cope with the transition from the economy of the past to the economy of
the future.
1
Timothy J. Bartik and George Erickcek, “The Employment and Fiscal Effects of Michigan’s MEGA Tax Credit
Program,” W.E. Upjohn Institute for Employment Research (April 2010).
<http://www.upjohninst.org/publications/wp/10-164.pdf>. Based on MEDC data, the authors report that, “Over the
life of the program, about 49 percent of the credits have been in the motor vehicle and motor-vehicle-parts
industries, and 31 percent in other manufacturing industries.” p7.
2
Michael D. LaFaive and James M. Hohman, “The Michigan Economic Development Corporation: A Review and
Analysis” (August 31, 2009). <http://www.mackinac.org/10933>
3
Bartik and Erickcek, “The Employment and Fiscal Effects of Michigan’s MEGA Tax Credit Program,” W.E.
Upjohn Institute for Employment Research (April 2010).
A New Economic Direction for Michigan
Page 1
July 2010
Another vestige of our century of auto-related success is
that Michigan no longer has a strong culture of
entrepreneurship. Those who open a business are often
seen not as economic pioneers but as outsiders unable to
succeed in the corporate world.
The core of this new
direction for economic
development in Michigan
is a shift from hunting to
gardening.
Clearly, the time has come for the government and people of Michigan to embrace a new
direction for economic development. While some of the old approaches may merit retention, we
suggest here that new strategies and tools—based on a new understanding of economic reality—
must be added to Michigan’s economic development portfolio.
The core of this change is a shift from hunting for new businesses to economic gardening. In
economic development, as in the animal kingdom, hunting involves stalking individual prey and
making a kill. It means trying to recruit or retain large companies that could choose to locate
elsewhere. The tools used to “make the kill” have, as noted above, become less successful; our
spears have become dull, our arrows are broken. Economic gardening, by contrast, entails
cultivating and nurturing local growth-oriented companies that can yield a harvest of new jobs.
As Small Business Association of Michigan Chair Cynthia Kay put it, “Economic gardening
means growing our own small businesses in Michigan from the ground up . . . . It’s important
because most job growth comes from our own small businesses, not big businesses—neither the
ones that we have here in the state nor the ones that are lured to locate here by expensive tax
breaks.”4
Over the past 15 years, employment in large, mature companies in Michigan has declined while
employment in smaller, younger companies has grown. By looking at net change in employment
separately for companies within Michigan and those that moved in or out, a more vivid picture
emerges. Michigan firms with more than 500 employees had a net loss of nearly 388,000 jobs
through expansions and contractions. Michigan’s economic hunting strategy did not fare well,
either: 16,000 jobs were gained from firms that moved in, but 21,000 were lost through those
that moved out.5 Small businesses have for decades been seen as a major engine for economic
4
Cynthia Kay (SBAM Chair), comment made at SBAM’s Annual Meeting & Networking Luncheon, Kellogg Hotel
& Conference Center, June 24, 2010.
5
Edward Lowe Foundation (2010). <http://youreconomy.org/>
Page 2
July 2010
growth; during some periods, such businesses have been cited as accounting for all net job
growth in the state.6 But economic gardening is not a formula for simply throwing public money
at all small businesses. Michigan has, by the most conservative measure, about 230,000 small
businesses, and a subset of them account for a large share of job growth; in fact, between 2001
and 2008, most reported either no change or declines in employment.7 According to Dane
Stangler of the Kauffman Foundation, “Buried within the universe of companies are those firms
that occasionally break away from the pack and create an extraordinary number of jobs . . . . Just
1 percent of companies . . . generate 40 percent of jobs in any given year.”8 Most of the one
percent, he points out, start out small and young. Michigan data are consistent with this analysis.
It is clear that not all small companies grow. Many business owners are content with a steadystate business model, once their company is able to provide a reliable and adequate income.
Others operate businesses in local markets, such as independent dry cleaners or restaurants, that
do not support larger enterprises.
The Kauffman analysis makes it clear that the real engine of successful economies is highgrowth firms. A community that can increase the number of such firms is far more likely to
prosper than one that focuses solely on chasing the next smokestack. For Littleton, Colorado,
this led to an epiphany: what matters is small companies
that will become larger. Says Christian Gibbons, Director
of Business/Industry Affairs for Littleton, “…[W]e got out
of the small versus large debate. The real issue was about
rate of growth.” Since the number of firms that truly drive
The Kauffman analysis
makes it clear that the
real engine of successful
economies is high growth
firms.
growth is small, cultivating and nurturing them is far more feasible than attempting to aid every
small company. Since this notion runs counter to decades of conventional wisdom and popular
economic mythology, it is obvious that public policies aimed at economic development through
the cultivation of small business must change, too.
Thus, this paper articulates an approach that is considerably different from past efforts in that it:
6
Dane Stangler and Robert E. Litan, “Where Will the Jobs Come From?,” Kauffman Foundation (November 2009.)
<http://www.kauffman.org/uploadedFiles/where_will_the_jobs_come_from.pdf>
7
Public Policy Associates, Inc., “Small Business Barometer 2008-IV Wave 58: Final Report” (December 2008).
8
Stangler, Dane, “High-Growth Firms and the Future of the American Economy,” Ewing Marion Kauffman
Foundation (2010), 5.
Page 3
July 2010
dollars.
 Focuses on small companies that intend to grow.
value to them and that they are willing to pay for services that have value. 9
The public expects the State of Michigan to provide help to business owners and to those
considering launching a business, but it is short on understanding what to do or how to do it.
Often, it is suggested that, while providing support, “government should not pick winners and
losers,” which implies that all comers should be treated equally. For small businesses, this might
mean that all would receive the same level of support or that none would receive any help at all.
The numbers, though, make the former impossible and political reality rules out the latter.
There are currently over 230,000 business establishments in Michigan that have between 1 and
99 employees.10 In addition, there are about 640,000 self-employed individuals.11 That is a total
of 870,000 small businesses. If the government were to provide $1,000 worth of help (cash,
technical assistance, etc.) to each of them, the cost would be $870 million per year and the return
would be negligible. Clearly that is not a feasible strategy; the entire budget of the Michigan
Economic Development Corporation is approximately $212 million.
Given such staggering costs, it is tempting to say that government should simply exit the
economic development business. This is a view deeply held and actively espoused by the
Mackinac Center for Public Policy, an influential conservative think tank in Midland, Michigan.
In comments to Crain’s Detroit Business, Michael LaFaive, Director of Fiscal Policy for the
Mackinac Center for Public Policy, said, “The MEDC is an expensive bureaucracy and ‘arguably
the least necessary entity in state government.’”12 We do not think that such a laissez faire
9
While access to capital is widely understood to be an important element of any business development strategy, it is
not addressed in this paper. The reason is that many of the tools for improving access to capital are already in place,
and they fit equally well with traditional strategies and economic gardening.
10
U.S. Census Bureau, 2007 County Business Patterns (August 28, 2009).
<http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=CB0700A2&-geo_id=04000US26&search_results=01000US&-_lang=en>
11
U.S. Census Bureau, 2008 Nonemployer Statistics (2008).
12
Amy Lane, “State Debates MEDC’s Value,” Crain’s Detroit Business (May 5, 2003).
<http://www.crainsdetroit.com/article/20030505/SUB/305050863>
Page 4
July 2010
approach resonates with either public expectations or the best available economic analysis; there
is a need for government to play an active role. Thus, rather than to follow either an all or
nothing path, we suggest that the state take a more metered approach.
The public sector currently supports start-up or pre-start-up companies through the Small
Business and Technology Development Center network and the United States Small Business
Administration. While there are outstanding and important exceptions, most of the companies
they support are local-market enterprises that never become significant job creators. Public
sector investment in such firms should be limited. As the odds for economic impact improve,
however, more public investment of various kinds can be justified.
It may appear that the options for an effective public sector role in supporting economic growth
are not promising. We have asserted that: (1) Economic hunting alone is not effective,
(2) supporting every small business is not economically feasible and pays only minimal returns,
and (3) exiting altogether the economic development business is neither appropriate nor
politically feasible. There is, however, a fourth way that capitalizes on the strengths of
government while avoiding many of its inherent limitations and weaknesses.
The strategy suggested here is about positioning the public sector to help increase the odds that
small firms that intend to grow will to do so successfully. It would build directly on the data that
show the importance of high-growth small firms in creating jobs. And, it would not attempt to
pick winners and losers, but instead would allow business owners to self-select based on their
assessment of the likely value of the services. While the services would be marketed to those
small companies that intend to grow, they would not be closed to anyone.
Another important and related element of the strategy is the notion that any public investment in
private businesses must be somehow related to the prospect for public benefit. This should, in
turn, drive the decision on how the costs of any services would be shared between the public
sector and the private users of the services. If a small
jobs, more tax revenues, and more wealth. Such growth
. . . any public investment
in private businesses must
be somehow related to the
prospect for public
benefit.
July 2010
company uses the services and provides more jobs or
grows more quickly than it would have otherwise, it is
clear that the public benefits from the availability of more
Page 5
may also strengthen the overall economy, which can lead to an upward cycle of prosperity.
There are also private benefits. The owners of the company will likely earn more income and
benefit from owning a more valuable asset. Since both the public and private sectors benefit
from the results of the services proposed here, it is sensible that both should invest in them.
In principle, this cost-sharing should be in rough proportion to the public and private benefits. It
is difficult, however, to estimate that ratio, since the results will not occur for some time. The
path of growth is uncertain under the best of conditions. Some companies will grow more than
others, some will provide more valuable jobs, and so forth. In addition, there are other factors
that affect the price that business customers would pay. Pricing of public services to businesses
must take into account the effect of various price points on the perceived value of the service; if
it is underpriced, some prospective customers may believe it is “cheap,” not just inexpensive.
Also, in Michigan’s current fiscal environment, the ability of government to invest even in
activities likely to have a long-term benefit is limited. In sum, the price should reflect the value
to the public and private sectors, be attractive to
The price of public services to
businesses should reflect the
value to the public and private
sectors, be attractive to
prospective customers, and be
feasible for government.
prospective customers, and be feasible for
government.
While the evidence for the role of high-growth small
firms in economic growth is clear, the link between
economic gardening and stimulation of such firms is
not. For that reason, we suggest that the strategic shift described in this paper be thoroughly
documented and evaluated to determine its effectiveness. If it has the hoped-for effects, that
research will allow the approach to serve as a model for the nation. If not, it will support further
decisions regarding how to improve the strategy.
It is very clear, however, that Michigan’s current economic development strategy does not reflect
this analysis of how economies grow. The public demands that government “do something,” and
the current approach lets public officials say they are. The total investment in that old strategy,
however, is not justified by the results. The opportunity to broaden our portfolio of tactics to add
the tools of economic gardening will never be more palpable or urgent.
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July 2010
Questions for Consideration:
The section above discusses the current climate in Michigan for business owners and the role
that the MEDC and other government agencies have undertaken in economic development. Is it
clear from the material that economic gardening is likely to lead to stronger economic growth
than traditional approaches?
With such a change, what is the optimal economic development role for state agencies such as
the MEDC? Can the MEDC embrace a role that embraces economic gardening and market
making? Can it get better leverage on investments of tax dollars by doing so?
Services Valued by Growth-Oriented Business Owners
The continued success of companies that intend to grow is rooted not only in their internal
capacity to support that growth, but also in the types and value of services and resources that are
available to them. Second-stage business owners who are serious about growing their companies
effectively cannot know everything necessary to do so; therefore, many times business leaders
must turn toward outside resources and services that will assist in their growth.
In June 2009, Public Policy Associates, Inc. (PPA) completed a study for SBAM about historic
and current use of growth resources and the interest in future resources among second-stage
businesses in Michigan.13 PPA collected data through an
online survey and four focus groups with business leaders.
This study asked business leaders to rate the value and
usefulness of services and resources to their business. It
identified a number of services and resources that were
Michigan growth-oriented
business leaders value
industry-specific, external
information that can be
learned on a self-directed
basis.
highly valued by those queried. There were two external
resources that the majority of businesses who completed the survey viewed as “very helpful”:
having external service providers with which they have an ongoing relationship (i.e., an
accountant, lawyer, etc.), and self-directed learning (i.e., Internet research, books, guides, etc.).
Focus group participants indicated, for the most part, that they were willing to utilize external
13
Public Policy Associates, Inc., Second-Stage Business Research Prepared for Small Business Foundation of
Michigan (June 2009). That research was funded by the Michigan Economic Development Corporation, the Edward
Lowe Foundation, and the Small Business Foundation of Michigan.
Page 7
July 2010
resources in the future. They identified a few resources as helpful for their continued growth: a
customized market research service, a growth assessment service, and a source for finding toplevel talent. Respondents to both the survey and focus groups indicated that the best-suited
external resources for their companies, no matter what they were, were those that were seen to be
fresh (not pre-packaged), customized services that are stemmed in industry-specific expertise.
Examples of services like those that PPA found to be very useful by Michigan second-stage
business leaders have been demonstrated in a few places in other parts of the country. The City
of Littleton, Colorado was the birthplace of the economic gardening movement. The City of
Littleton provided a number of tools, among other things, to aid in small businesses’ growth.
These tools included information resources to entrepreneurs in the area to help them grow their
businesses, like Geographic Information Systems (GIS) services; databases that can develop
marketing lists, industry trends, and answer custom business questions; as well as training and
seminars dealing with business, management, and customer strategies.14 These services appear
to gel with resources Michigan second-stage business leaders value: industry-specific, external
information that can be learned on a self-directed basis.
Following the City of Littleton’s example, the state of Florida, through the University of Central
Florida (UCF), has undertaken a similar model of
There are select resources
and services that business
owners value and consider
to positively impact their
ability to grow and prosper.
offering services to its second-stage businesses in six
regions throughout the state to aid in their growth.
Along with other services, UCF is offering information
resources similar to those in Littleton, as well as
decision-making tools (e.g., strategy analysis, capital
referrals). UCF develops the tools, and they are distributed to businesses via technical assistance
teams that work in the six regions.15 Again, these tools are similar to resources identified by
Michigan business leaders as those that are of high value to successful growth.
Based on PPA’s research, it is clear that there are select resources and services that business
owners value and consider to positively impact their ability to grow and prosper, even in
Michigan’s current economic condition. And other locales in Colorado, Florida, Wyoming,
14
15
City of Littleton, “Economic Gardening” (2010). <http://www.littletongov.org/bia/economicgardening/>
GrowFL, “Cultivating Growth Companies” (2010). <http://www.growfl.com/>
Page 8
July 2010
Georgia, Oregon, Connecticut, Wisconsin, Mississippi, and Tacoma, Washington are beginning
to use similar tools to aid their businesses. Although there is no empirical evidence that business
success can be attributed to these programs, business leaders themselves identify these tools as
useful and valuable in their individual businesses.
An Economic Gardening Strategy
The new economic direction for Michigan focuses on strengthening small firms that are
positioned for growth. It does not preselect industries or firms. Instead, the firms select
themselves based on the value that business owners see in the offered services. This approach
assumes that many of the firms that can power a robust economic future are already here and that
helping them grow successfully is a path toward that future. A Michigan economic garden will
nurture these existing companies, but will also stimulate more individuals to launch their own
growth-oriented firms.
The change from hunting to economic gardening broadens the focus from reducing costs through
tax breaks, subsidized training, and similar devices to improving competitiveness through
increasing market knowledge, management skills, and access to technology. Michigan’s
economic development strategy appears centered on compensating for deficits—real or
perceived. Are our taxes too high? Are our regulations too cumbersome? Is our workforce
inadequately trained? Political reality continues to dictate that we will continue to attempt to
address these issues, as we have done for the past quarter century; many would point out, for
example, that in a bidding war between the states over tax breaks for business attraction, it is
foolhardy to disarm unilaterally. Whether such approaches continue or not, it is clearly time for
Michigan to focus more intensively on strengthening the assets of its growing businesses. We
need more than a deficit-based strategy.
The sections below on information and infrastructure address this shift head on. The section on
environment shows how places conducive to the change might look and feel.
Information
The economic garden must be cultivated with a package of services that provide information to
growth-oriented companies that improve their ability to prosper. The following examples of
Page 9
July 2010
these services, based on experiences around the nation and on the PPA research in Michigan,
illustrate what might be particularly valuable in advancing the economic gardening strategy.
 Customized market research. A centerpiece of the Littleton work and in states like Florida,
Georgia, and Wyoming is providing growth-oriented firms with high-quality market
research. Such research requires access to a variety of costly proprietary data sources, and
they are simply out of reach for small companies. Experienced consultants work with
companies to help them access, analyze, and use the intelligence they gain about their current
and potential markets. This process is more systematic, focused, and intensive than what
most business owners could carry out alone or with in-house staff.
SBAM has experimented with delivery of such services in two Michigan counties. Although
it is too early to gauge results in terms of job growth, the project director reports that,
“Preliminary findings from the work completed so far indicate that providing growthoriented companies (‘intent to grow’) with high-level market research is a good way to
enhance their ‘capacity’ for growth. A Regional Economic Gardening Support Service
allows the high cost for market research to be spread across multiple cost centers, thus
lowering the costs for individual projects. It also allows a project to secure sponsored
funding for a regional effort versus having to find funding to subsidize individual market
research projects.”16
 Growth diagnostics. The PPA research cited above showed that many growth-oriented small
firms would value help in identifying the barriers that could impede their efforts to grow and
in mapping a strategy for overcoming them. This service would be carried out by expert
general management consultants who have experience providing this type of service to
similar companies. By organizing a market for this work, the consultants could provide the
service at discounted rates. Again, this would put the price of the service within reach of
small, developing companies.
 Connecting top management talent. The PPA research found that growth-oriented small
firms saw some value in assistance in finding top leadership talent for their companies. This
type of service would not only broker connections between small firms and available top
16
Mark Clevey memo to Jeffrey Padden, June 29, 2010, Summary of SBAM RBEG Projects.
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July 2010
talent, but also vet the candidates’ qualifications. A young, fast-growing company may need
sophisticated leadership capabilities in a variety of areas—finance, sales, operations, etc.—
before they can afford them full time. Thus, they need a way recruit people who can play
these roles on an as-needed basis, eventually becoming a full-time leadership team. Ann
Arbor SPARK has begun to provide such a service to businesses in that region. SPARK
provides opportunity for high-level job seekers to post their profiles on SPARK’s Web site.
SPARK then connects potential employers with such job seekers by means of position
matching, networking events, and a monthly newsletter updating firms on those in the talent
pool.
 Temporary expertise. High-growth small firms see value in bringing in content experts on a
short-term basis to address specific problems or capitalize on emerging opportunities. These
might include experts in financial strategy, manufacturing processes, marketing, or other
areas. Again, a brokering function that makes such experts available to companies that
otherwise would have difficulty identifying or screening them may be of value.
The ideas above illustrate the kinds of tools that could increase the capability and capacity of
growth-oriented firms to succeed in reaching new markets, competing effectively, and adding
new jobs. What other tools would complement them? Where and how have such tools been
tested? How should those services be distributed to growth-oriented businesses throughout the
state? What evidence exists about their effectiveness in increasing the successful growth of
businesses, strengthening economies, and creating jobs? As an economic gardening strategy is
rolled out, how should ongoing analysis of its effectiveness be built in?
Infrastructure
Michigan has an impressive infrastructure that must be incorporated into the economic gardening
strategy. This infrastructure includes the Small Business and Technology Development Center
(SBTDC) network, public libraries across the state, a
Michigan has an impressive
infrastructure that must be
incorporated into the
economic gardening
strategy.
world-renowned university system, the Michigan
Economic Development Corporation, and other assets.
Page 11
July 2010
The Small Business and Technology Development Center network delivers business
management consultation and training to about 10,000 customers each year. Its capacity and
statewide reach make it an important delivery system. The value of its contribution to
Michigan’s economy could increase if the SBTDC network were to more explicitly focus on
providing tools and support to firms with high growth potential. It can serve as a distribution
system for the informational tools described in the previous section.
Public libraries, which over the past two decades have transformed into sophisticated
information clearinghouses, could also be part of a statewide delivery system. The range of
market intelligence licensed by the state could be made available to entrepreneurs through
libraries, which would add significant capacity to the system.
Michigan’s 15 public universities are a critically important asset for economic gardening. There
is a strong correlation between innovation and economic growth, one which is well-documented
in the economic development literature,17 and Michigan’s universities can be sources of process
and product innovations that can be commercialized by
entrepreneurial firms. The University Research
Corridor, comprised of Michigan’s top research
institutions, is committed to strengthening the role that
they play in fostering a stronger economy. While
Technology transfer must
include supporting
university faculty, staff, and
students who wish to
commercialize discoveries.
various strategies for technology transfer have been
attempted for decades, the stage seems to be set now—with strong commitments and actions
from key university presidents—to improve and expand that process. This should entail much
more than simply licensing intellectual property developed in the universities. In addition, it
means supporting university faculty, staff, and students who wish to translate discoveries from
the research to the commercial stage. One innovative approach to this is building structural links
between the sciences and business schools and encouraging partnerships between students across
those disciplines.
17
S. Michael Camp, “The Innovation-Entrepreneurship NEXUS: A National Assessment of Entrepreneurship and
Regional Economic Growth and Development,” SBA Office of Advocacy and Edward Lowe Foundation (April
2005). <http://www.sba.gov/advo/research/rs256tot.pdf>
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July 2010
While universities can contribute intellectual seeds to new companies, they can also provide the
fertilizer of market research. They could be at the center of the customized market research
service described above. The business and communications schools can make great
contributions to the methods for identifying prospective customers and how to reach them
effectively.
The Michigan Economic Development Corporation has been Michigan’s principal state-level
economic development organization. Over the years, however, it has not been asked to embrace
an economic gardening approach. Such a shift in Michigan’s approach, therefore, suggests that
its role could change to encompass new and different responsibilities and actions. It may be
possible to redeploy some of the assets of the organization to carry out a modified mission. This
would require equipping the MEDC staff with the skills and expertise to provide a different mix
of services. It might involve serving as the broker for the types of high-value services described
above, working through statewide delivery systems.
The Michigan Manufacturing Technology Center (MMTC) functions as part of the National
Institute of Standards and Technology Hollings Manufacturing Extension Partnership and is a
partner of MEDC.18 The MMTC describes itself as an “integral part of Michigan’s statewide
manufacturing strategy.” The MMTC provides training opportunities and consulting to small
and medium-sized businesses; by doing this with many businesses, they foster competition
among the firms. According to a survey administered on MMTC’s behalf to its clients in the
2007-2008 fiscal year, over $66 million in investments have been made in MMTC’s clients, over
2,000 employees have been hired or retained by MMTC’s clients, and their clients have reported
over $48 million in cost savings.19 In many ways, this service models important aspects of an
economic gardening strategy.
This section lists four assets of potential value in developing, marketing, and delivering an
economic gardening strategy. What others should be included? Specifically, how can
Michigan’s community colleges be included? How can all of our assets be used effectively to
support economic gardening?
18
19
Michigan Manufacturing Technology Center (2010). <http://www.mmtc.org/About/about.aspx>
Michigan Manufacturing Technology Center (2010). <http://www.mmtc.org/Why/why_choose_mmtc.aspx>
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July 2010
How would the universities, libraries, SBTDCs, and the MEDC need to change in order to
support this strategy? In their current configurations, are they capable of focusing as suggested
here? How would these assets be knitted together into a unified whole? Do they represent
sufficient expertise and capacity to design, develop, and distribute a robust array of economic
gardening tools?
Environment
For Michigan to fully capitalize on the potential for economic gardening, it must shake off the
hundred-year history of a paternalistic economy and pursue a culture of entrepreneurship. Such
an effort would include creation of new reward systems, public investment, and recognition.
Perhaps success in this transition would be best signaled by this change: college graduates and
mid-career migrants from the corporate world who launch their own firms would be seen as local
folk heroes and role models. Cynthia Kay puts it even more powerfully. She envisions a future
in which, “…a young person gets a job at a big company and everyone asks them: ‘What’s
wrong with you? Why haven’t you started your small business yet?’”
Ideally, progress through this transition could be
For Michigan to fully capitalize
on economic gardening, it must
shake off the hundred-year
history of a paternalistic
economy and a pursue culture of
entrepreneurship.
measured by tracking changes in public opinions
and attitudes about entrepreneurship, entrepreneurs,
and their importance to the economy.
Entrepreneurs tend to cluster in areas that are
attractive to and friendly toward them and, as noted
above, that means more than business costs. Much research in recent years has demonstrated
that entrepreneurs prefer to associate with their kind in a mix of social and professional
interactions.20 As local networks of entrepreneurs begin to materialize, word spreads and the
community becomes attractive to others of like mind and ambition. The kinds of communities
that appear to foster this process are sometimes referred to as new urban communities. They are
20
Toby Stuart, “The Importance of Networks,” Ewing Marion Kauffman Foundation (2007)
<http://www.kauffman.org/research-and-policy/importance-of-networks.aspx> and Martin Neil, Karen Dynan, and
Douglas Elliot, “The Future of Small Business Entrepreneurship: Jobs Generator for the U.S. Economy,” The
Brookings Institute (June 2010). <http://www.brookings.edu/papers/2010/0604_innovation_small_business.aspx>
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July 2010
characterized by developments that include residential, retail, and commercial uses; dense
population that creates a sense of activity and energy; amenities such as bars, restaurants,
galleries, music venues, and others; and those amenities are within walking distance of one
another. One of our most valuable—and most mobile—assets is our college graduates. They
can be a source of entrepreneurial potential, and the attractive communities described here can
keep more of them in Michigan where they could start there own firms or become the highly
talented human capital needed by others.
This implies that an appropriate role of government could be creating or stimulating the right
environment, one that is attractive to and supportive of high-growth companies. Such a role can
be played by using current resources to tilt local and regional development toward creating these
new urban communities. Resources available to Michigan for such work include Community
Development Block Grant funds, Neighborhood Stabilization Program dollars, and other
resources administered by the Michigan State Housing Development Authority. The Michigan
State Housing Development Authority (MSHDA) is focused on the importance of the “sense of
place” to Michigan’s economic future, and the link between place and entrepreneurship is
critical. Thus, MSHDA and other proponents of place-making must be seen as a key player in
creating Michigan’s economy of the future.
It is clear that Michigan should create a physical environment that is friendly towards
entrepreneurs and supportive of small business growth, but how can the work of MSHDA to
create attractive places be integrated with strategies to support entrepreneurship and economic
gardening?
While an economic gardening strategy can be launched with the current tax code and regulatory
apparatus in place, improving both would be helpful. Is there any evidence that the political
environment for doing so is different now than it has been over the past 20 years under both
Republican and Democratic governors? If so, what changes in taxes and regulations would be
useful?
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July 2010
How Michigan Can Benefit
The stakes are high and the potential benefits are clear. Michigan’s government and people must
embrace the economy of the future, and doing so means different ways of thinking about
economic development and prosperity. Instead of relying only on the hunt for the large prey, we
must grow our own in economic gardens across the state. We must value and support the
entrepreneurs and companies that are the engines of economic growth. If we do so, we take our
economic future into our own hands, rather than
competing with the lowest-cost—and therefore poorest—
venue for labor around the nation and globe.
By using our existing resources differently, we have the
potential to perhaps double the number of successful,
Michigan must embrace the
economy of the future, and
doing so means different
ways of thinking about
economic development and
prosperity.
high-growth firms in the state, which would dramatically
improve the jobs picture in Michigan. The tools exist to create the information, infrastructure,
and environment to make that happen.
Michigan can be the first state in the nation to fully integrate economic gardening into the core of
its economic development strategy. As such, we will become a center of gravity for economic
thinkers, for the media, and for business people who want to live in a state on the cutting edge.
Including a strong focus on intellectually rigorous evaluation of the initiative will allow us to
constantly refine our efforts and to serve as a learning center for the country.
We now know that a more effective approach is possible, and we are continuing the research and
development work to develop it. What remains is to build the public and political consensus
around the proposition that it is time to cultivate Michigan’s economic gardens.
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July 2010
P L A N N I N G L AW P R I M E R
Procedural Due Process in Practice
by Dwight H. Merriam, AICP, and Robert J. Sitkowski, AIA
“The history of liberty has
largely been the history of the
observance of procedural safeguards.” McNabb v. United States,
318 U.S. 332 (1943) (Justice
Frankfurter)
Readers of the Planning Commissioners Journal know that citizen participation as a member of
WHAT IS PROCEDURAL DUE PROCESS
AND WHEN DOES IT APPLY?
The Fifth Amendment to the U. S.
Constitution provides that “No person ...
shall ... be deprived of property, without
© PAUL HOFFMAN
a planning commission, zoning board of
appeals, or historic preservation board
requires an understanding of planning law. Most commission and
board members are familiar with
complex concepts like “takings” and
“arbitrary and capricious actions”
under the U.S. and State Constitutions. Indeed, those of you who have
an abiding interest in planning law
may actually weave cases like Dolan
and Lucas into a relatively normal
conversation!
This article adds a necessary
component to this lexicon by examining the important but often overlooked concept of “procedural due
process,” mandating constitutional
requirements in the day-to-day
operations of bodies which make
decisions concerning the use of
land.
We all should have at least some
understanding of procedural due process
because it is intended to ensure that government acts in a fundamentally fair and
reasonable manner when making decisions that affect private individuals. Broad
concepts like “fundamental fairness” frequently become the basis for challenging
land use decisions. This article is intended
to help commission members learn what
the law expects, in practical terms.
The article begins by examining the
meaning of procedural due process and
when it applies. In the second part, it cov-
ers specific acts that ensure fairness: adequate notice; an unbiased decision-maker;
avoidance of ex-parte contacts; an opportunity to be heard; the right to present evidence; prompt decision-making; a record
of the proceeding; and a written decision
based on the record and supported by reasons and findings of fact.
P L A N N I N G
due process of law.” This mandate, known
as the “Due Process Clause,” applies to
the state governments through the Fourteenth Amendment, which provides in
pertinent part: “... nor shall any state
deprive any person of life, liberty, or property without due process of law.” Over
time, this safeguard (applied to local governments through “Dillon’s Rule,” which
provides that local governments have only
so much power as the state may grant) has
come to protect individuals from arbitrary
governmental action, no matter what level
of government is acting.
C O M M I S S I O N E R S
J O U R N A L
5
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N U M B E R
The Due Process Clause plays a unique
dual role in land use law because courts
have determined that it possesses two distinct components — substantive and procedural.
Procedural and Substantive Due
Process, p.6. The hallmark of the “procedural” aspect, the focus of this article, is the
right to a fair and open process. Sounds
simple enough, but as with most areas
involving constitutional law, complexities
lurk behind the obvious.
Some Limitations
As an initial matter, it is important to
recognize that the Constitution does
not require government to afford
procedural due process unless it
deprives an individual of an interest
in life, liberty or property.
More
Than the Minimum, p.6. It is equally certain that land use decision-making
does not affect life or liberty interests. So, we are left with the single
threshold question: “is there a property interest involved?”
This is the point where things
can get away from us if we’re not
careful. One would normally and
understandably say: “of course a
property interest is involved whenever land use decisions are made,
because such decisions, by definition, concern the use of property.”
Therefore, using this reasoning,
anyone who owns or leases property
should be entitled to Constitutional due
process protections whenever there is a
government land use decision affecting
his or her property. This common sense
reasoning, while seemingly persuasive, is
nonetheless incorrect.
The body of law in this area focuses on
the property rights inherent in the permit
sought, and not those attributed to the
mere ownership of land. Only those with an
interest in land, of course, may submit a
continued on page 6
3 1
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S U M M E R
1 9 9 8
Procedural and
Substantive
Due Process
The Due Process Clause requires that
both the process and the result of governmental decision-making be equitable. Procedural due process ensures that decisions
are reached in a fundamentally fair manner. Substantive due process, on the other
hand, ensures that regulations imposed
by the government rationally and reasonably advance a legitimate governmental
purpose.
More Than
the Minimum
continued from page 5
permit application in most cases, but that
is not the point of the Constitutional
inquiry. The real question is: how does
one demonstrate a sufficient interest in
the granting of a permit to be entitled to
procedural due process protections?
The “Clear Entitlement” Test
The United States Supreme Court, in
the well-known (at least to lawyers) case
of Board of Regents v. Roth, 408 U.S. 564
(1972), developed what is referred to as
the “clear entitlement” test to determine
whether the property interest at stake
warrants due process protection under
the Constitution. It may be easiest to
understand this test in the following way:
if the government has no choice but to
grant a permit in the event that the applicant meets certain criteria established by
regulation, then a protected property
interest is involved — and procedural
due process protections must be provided. This occurs, for example, when a zoning board or other body sitting in a
permitting capacity applies adopted policies or regulations to specific individuals
and circumstances. In other words, when
the body is acting in an “adjudicative”
manner.
Contrast this with “legislative” decisions where the local body (most commonly the governing body) is setting
policy of a general application — for example, by enacting a zoning ordinance or by
designating an historic district. The exercise of “legislative” functions is usually not
subject to the detailed hearing, notice, and
public participation requirements imposed
on “adjudicative” functions.
Many planning commissions, however, do not act precisely as either
“adjudi-cative” or “legislative”bodies, but
fall somewhere in between. This is especially the case in those states where a
planning commission reviews permit
applications according to adopted criteria, but does not make the final decision.
Since the commission does not function
as an “adjudicative” body in the strictest
sense, one could argue that it does not
have to provide procedural due process
protections such as adequate notice and
the opportunity to be heard. Our advice,
however, is that where a commission
makes recommendations that the ultimate permit-granting authority (usually
the local governing body) may rely on in
making its own determination to approve
or deny a permit, prudence dictates that
the commission also follow the principles
of procedural due process.
Having just gone through the basics
of the Supreme Court’s “clear entitlement” test, we must now caution you
that courts can invalidate local actions
because of the unfairness of the action
even if they conclude that the Constitution’s due process clause does not apply! If
a court is sufficiently outraged by the
unfairness or bias of the local decisionmaking process it may search for (and
find) some other basis for invalidating
the decision. A good example of this is a
recent California Court of Appeals decision, Clark v. City of Hermosa Beach, summarized in the sidebar.
Clark v. City of
Hermosa Beach, p.7.
WHAT IS REQUIRED TO SATISFY
PROCEDURAL DUE PROCESS?
Procedural due process requires that
governmental proceedings be conducted
in an orderly, fundamentally fair, judicious, and impartial manner.
In the balance of this article,
© PAUL HOFFMAN
We have presented in this
article what we consider the minimum
requirements of procedural due process
under the United States Constitution. In
other words, you can regard these
requirements and any others under your
state laws as a foundation on which you
can build a more elaborate framework.
If your commission decides that it
would be appropriate in your community
to afford procedural protections to those
who may not have a constitutionally-protected property interest, you may do so.
These types of additional procedural protections might include formal notice to
recognized neighborhood groups when
applications are filed for properties within
their area and accommodations for representatives of these groups to testify at
public meetings or hearings.
Procedural Due Process
P L A N N I N G
J O U R N A L
6
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N U M B E R
3 1
/
S U M M E R
1 9 9 8
we will discuss what we feel are the
minimum requirements for a defensible
proceeding. Please note, however, that
requirements may vary in your jurisdiction depending on your state statutes and
how your courts have interpreted them.
Our goal is to alert you to the issues. You
should be guided by your commission’s
legal counsel in determining the full
scope of procedural due process required
in reviewing permit applications.
Also, bear in mind that while your
proceedings must conform with the
requirements of procedural due process,
they need not be conducted in a formal
“trial-like” manner. Indeed, running a
commission hearing like a trial will end
up intimidating virtually everyone
involved (except for the lawyers). Procedural due process can usually be provided within the confines of a relatively
informal atmosphere.
1.Adequate Notice
Notice requirements are normally
found in state enabling laws and in local
zoning and subdivision ordinances. They
direct who is to receive notice and what
form the notice must take. Courts generally consider these requirements as
mandatory and jurisdictional, which
means that a failure to comply will invalidate the action taken.
The person whose property is at issue
and the person who has applied for a permit (sometimes the same person) ordinarily must get notice. To ensure fairness,
most communities also provide notice to
neighbors or property owners within a
specified radius, even if state law does
not mandate this. A commission should
also give some type of notice of its hearings to the general public. Most states
require, at a minimum, that notice of
hearings be published in a newspaper of
general circulation.
The following cases illustrate actions
constituting insufficient notice, and
underscore the importance of strictly following your jurisdiction’s notice requirements.
• An Illinois court held that notice of
a rezoning application was not reasonably calculated to reach those who
should have been informed so as to afford
them an opportunity to present their
P L A N N I N G
objections when this notice was buried in
the back pages of a newspaper. American
Oil Corp. v. City of Chicago, 331 N.E.2d
67 (Ill. App. Ct. 1975).
• The Utah Supreme Court held that
a city planning and zoning commission
failed to comply with statutory notice
requirements when it gave no notice of
its hearing on a proposed project master
plan, and then an ordinance enacting the
same was passed by the governing body.
Call v. City of West Jordan, 727 P.2d 180
(Ariz. 1986).
Clark v. City of
Hermosa Beach
Sometimes a court will invalidate a
land use decision when it determines that
the local body has engaged in an egregiously unfair pattern of conduct,
notwithstanding a finding that the Due
Process Clause does not strictly apply.
This was the case in Clark v. City of
Hermosa Beach, 56 Cal. Rptr.2d 223
(2d Dist. 1996).
The plaintiffs in Clark applied to the
Hermosa Beach Planning Commission for
permits to demolish the duplex they
owned and replace it with a new two-unit
condominium. The planning commission
approved the permits, but this approval
was appealed to the city council. The city
council then denied the permits, finding
that the size of the proposed structure
was excessive.
The California Court of Appeals, in
reviewing the city council’s decision, first
applied the U.S. Supreme Court’s “clear
entitlement” test. The court found that
the plaintiffs were not entitled to procedural due process under the Constitution
(primarily because they had applied for a
conditional use permit, which the court
found the city council to possess considerable discretion in deciding whether to
issue; thus, the plaintiff had no protected
property interest). Nevertheless, the court
threw out the city council’s decision. The
court expressed shock at the bias of certain city councilors and, relying on the
common-law doctrine of conflict of interest, concluded that the plaintiffs had been
unlawfully denied a fair hearing.
The lesson in Clark for land use decision-makers is that a court may well find
a way to reverse a government action
based on an unfair process if it is sufficiently outraged — even if Constitutional
due process entitlements do not come
into play.
2. An Unbiased Decision-Maker
Commission members must be free
from conflicts of interest and bias. At the
least, such behavior can lead to a crisis of
confidence in the commission’s ability to
deal fairly with applicants. But bias and
conflict of interest can also result in a
court invalidating the commission’s
decision.
• The Maine Supreme Court held that
a landowner was denied due process
when only two of five commission members who heard the evidence were on the
commission when it issued its findings,
and one of the new members had been a
vocal opponent of the project at the hearing. As the Court noted: “Procedural due
process ... assumes that Board findings
will be made only by those members who
have heard the evidence and assessed the
credibility of the various witnesses.” The
Court further held that only those Board
members who had not previously
opposed or supported the project could
participate at a future rehearing. Pelkey v.
City of Presque Isle, 577 A.2d 341
(Me.1990).
• The Georgia Supreme Court vacated a county commission rezoning of two
lots from residential to commercial
because two of the three commissioners
had a financial interest in the rezoning.
Wyman v. Popham, 312 S.E.2d 795 (Ga.
1984).
3. Ex-Parte Contacts
Related to the previous point, it is
fundamentally unfair to engage in exparte contacts — contacts outside of the
public hearing process with a party
involved or potentially involved in a
continued on page 8
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Procedural Due Process
matter before your commission. These are
“one-sided” conversations because you
are allowing one party to have a discussion with you in the absence of other parties. You must scrupulously avoid these
conversations.
• The Maine Supreme Court held that
a planning board’s meetings with opponents of a subdivision proposal were exparte in nature (and violated due process)
since the applicant was not notified of
them. Mutton Hill Estates Inc. v. Oakland,
468 A.2d 989 (Me. 1983), appeal after
remand, 488 A2d 151 (1985).
Should you inadvertently commit an
ex-parte contact, you must reveal it on the
record before you vote on the matter. As
Gregory Dale has stated in one of his
“Ethics & the Planning Commission”
articles in the Planning Commissioners
Journal, “there is nothing more frustrating
for the losing party than to have the
impression that the other side prevailed
through the use of ‘back door’ politics.
And nothing is more important to you as a
planning commissioner than your credibility and integrity.” PCJ #2, Jan./Feb.
1992, “Ex-Parte Contacts.”
Most states have also enacted “Sunshine Acts” and “Open Meetings” laws
that define what constitutes a public
meeting and require that all deliberations
(with a few specified exceptions) take
place in a public forum. You should have
your commission’s attorney brief you on
what these laws require.
4. Opportunity to be Heard
Every hearing, formal or informal,
must allow all interested parties a fair and
reasonable opportunity to present arguments and evidence supporting their position. This does not mean that a
commission cannot place reasonable time
restrictions on presentations and testimony. In general, courts weigh an individual’s
interest in an opportunity to be heard
against the public interest in fair but efficient hearings.
• A Colorado court held that a board
of adjustment violated due process when
it took additional testimony at a second
public hearing after telling an applicant
P L A N N I N G
© PAUL HOFFMAN
continued from page 7
that his presence was not necessary
because no testimony would be taken.
Sclavenitis v. City of Cherry Hills Bd. of
Adjustment and Appeals, 751 P.2d 661
(Colo. Ct. App. 1988).
• A California court held that a governing body, by waiving notice requirements and limiting the developer’s
opportunity to speak, violated due
process. Cohan v. City of Thousand Oaks,
35 Cal. Rptr.2d 782 (2d Dist. 1994).
5. The Right to Present Evidence
A commission must reach its decision
after hearing all of the evidence and after
permitting the evidence to be examined
and commented upon by all interested
parties. Each side must be allowed to
rebut the other’s arguments and evidence.
• A New York court held that an applicant was entitled to a rehearing when the
zoning board’s denial was based on a planning department report containing evidence that the applicant did not have an
opportunity to rebut. Sunset Sanitation
Service Corp. v. Bd. of Zoning Appeals, 569
N.Y.S.2d 141 (2d Dep’t 1991).
The right of cross-examination in the
context of land use hearings varies with
the nature of the proceeding and with
requirements of state law. Some states
require commissions to allow cross-examination. Because the prospect of facing
formal cross-examination may make residents reluctant to speak (thus depriving
your commission of valuable evidence)
we recommend that your proceedings
allow for only as much cross-examination
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as is legally necessary. This is a particularly important issue to consult with your
commission’s attorney about in advance.
6. Prompt Decision-Making
The right to be heard includes the
right to a prompt decision. Common
sense dictates that you should make your
decision within a reasonable time in light
of the substantial financial and personal
capital expended by all sides in land use
applications. In fact, many states and
localities require land use decisions to be
made in a particular time frame and to be
published in a certain manner.
7. A Record of the Proceeding
The record is the basis for your decision. Moreover, in “record appeal” states,
the court relies on this record when it
reviews a commission’s action; you must
build a meticulous record at every hearing
in these jurisdictions. In “de novo appeal”
states, the court holds its own hearing as if
the commission had not previously rendered a decision (but even in these states,
we would advise commissions to preserve
in some form the evidence presented and
considered at the hearing).
The record of the proceedings is a
compilation of testimony from the hearings, written information provided by witnesses, staff reports and recommendations, and any other information used to
form the basis for the decision. Testimony
may be recorded in various forms: a formal transcript prepared by a professional
court reporter, written minutes, or audio
or video recordings.
3 1
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1 9 9 8
8. A Written Decision Based on the
Record and Supported by Reasons and
Findings of Fact
Courts will generally uphold local
land use decisions so long as they are
supported by facts contained in the
record. However, courts will overturn
local land use decisions as “arbitrary and
capricious” when they are not the product of sufficient fact-finding.
• A Minnesota court reversed a county board’s decision to deny a conditional
use permit for a sewage treatment plant,
noting that: “The minutes of the county
board contain no findings of fact explaining the decision ... The board gives no
factual basis for its findings. It merely
recites the language of the zoning ordinance. ... There is no way to determine
from the record before this court what
the county board’s thinking was when it
denied the conditional use permit.” City
of Barnum v. County of Carlton, 386
N.W.2d 770 (Minn. App. 1986).
• A New York court held that generalized, ultimately refuted, objections by
neighbors are not sufficient to support a
denial of a special use permit. In re
Markowitz v. Town Board, 606 N.Y.S.2d
705 (2d Dep’t 1994), appeal denied, 616
N.E.2d 157 (1994).
• The Nevada Supreme Court found a
city council’s denial of a rezoning request
for a hotel and casino (which the planning commission had recommended be
approved) to be arbitrary and capricious.
The Court found that council members
made their decision based on “campaign
promises” and “pledges to constituents”
instead of on whether the rezoning conformed with the city’s master plan. Nova
Horizon v. City Council of Reno, 769 P.2d
721 (Nev. 1989).
The best way to avoid a charge of
arbitrary and capricious action is to
ensure that the reasons you give for your
decision are supported by facts contained
in the record of the hearing. While many
states and localities expressly require
findings of fact and a statement of reasons, sound practice dictates that your
commission adopt this practice even if
your state’s laws are silent on this topic.
Your decision should also be based on
your ordinance and plan criteria, and
P L A N N I N G
Resources:
should be consistent with previous decisions of your commission dealing with
similar circumstances.
Remember that the point of creating a
written decision is to distill the facts,
articulate your assumptions, and clearly
describe how you are applying the facts
to the legal requirements of your ordinance. The decision should also be written in a manner that others can
understand. In other words, discipline
yourself to not use “legalese” and “planner-speak.”
• Allor, “Outline of Articles of By-Laws for a
Planning Commission,” No.14, Planning
Commissioners Journal (Spring 1994).
• Alperin and Burge, “Land Use Hearings
and the Due Process Clause,” Vol. 37,
No. 5, Municipal Lawyer 10 (September/
October 1996).
• Blaesser and Weinstein, eds., Land Use
and the Constitution: Principles for Planning Practice, Planners Press, 1989.
• Bley and Axelrad, “The Search for Constitutionally Protected ‘Property’ in Land
Use Law,” Vol. 29, No. 2, The Urban
Lawyer 251 (1997).
SUMMING UP:
If you abide by the basic principles
outlined above, your actions should survive any judicial scrutiny. You can ensure
that these practices become a part of your
day-to-day commission routine by incorporating procedural safeguards into your
bylaws or ordinance.
Ensuring due process may seem to be
an expensive and time-consuming
proposition. But as land use lawyer Ted
Carey has noted, “lack of process costs
even more money. ... Virtually anything
that’s questionable should be accorded
procedural due process steps. Its a small
price to pay for a very large insurance
policy.” Land Use and the Constitution,
p. 46. ◆
• Kovacic and McMaster, “Drafting Land
Use Findings,” No. 4, Planning Commissioners Journal (May/June 1992)
• Netherton, “The Due Process Issue in
Zoning for Historic Preservation,” Vol.
19, No. 1, The Urban Lawyer 77 (1987).
• White and Edmundson, Procedural Due
Process in Plain English: A Guide for
Preservation Commissions, National Trust
for Historic Preservation, 1994.
Dwight H. Merriam,
AICP, and Robert J.
Sitkowski, AIA, are lawyers with Robinson &
Cole LLP in Hartford,
Connecticut, where they
practice land use law.
Merriam has been a director of the American Planning Association, and is past President of the
American Institute of Certified Planners. He is coauthor of The Takings Issue (to be published this
year by Island Press) and also co-authored “The
Supreme Court Takes on ‘Takings’ “ in PCJ #8
(Jan./Feb. 1993).
Thanks!
Our thanks to the following
participants on our on-line editorial review board forcommenting on
articles appearing in this issue:
Chris Bradshaw, Reno J. Cecora,
Jane English, Erik Ferguson,
Doug Greene, Wendy Grey,
Doug Hageman, Carl Kohn,
Lee A. Krohn, Wayne Lemmon,
King Leonard, Ross Moldoff,
Terrence D. Moore, Gene Moser,
Mark Padgett, John Palatiello,
Jerald Powell, Ray Quay,
Martin Sanchez, Irv Schiffman,
Bryan Stumpf, Barbara Sweet,
Lindsley Williams, Jim Yarbrough
If you would like to assist us by
reviewing draft articles, complete
the sign up form at our Web site:
www.plannersweb.com/guest.html
Sitkowski was the
1994 winner of the American Planning Association,
Planning & Law Division’s R. Marlin Smith
Student Writing Competition, and is a member of
the American Institute of
Architects.
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City of Troy
New Business Checklist
Welcome to Troy, MI – Michigan’s premier address for business, retail and commerce! With our ideal
location, excellent City services and friendly business environment, you will find that Troy is a great place to
start and grow your business. To get you started, the following checklist has been prepared to assist you in
launching your business. You will find that Troy’s plan review, building, permitting and inspection processes
are fast, efficient and user-friendly. We look forward to serving you, and once again, welcome to Troy.
What do you want to do?
Please Contact
Finding a Site for Purchase or Lease
Find a site for lease or purchase
Schedule a pre-purchase/lease meeting
Complete a pre-purchase walk-through inspection
Glenn Lapin Economic Development Specialist
248.524.3314, [email protected]
Site Plan Review
Ensure your business is in compliance with Zoning Ordinance
Determine if Site Plan Review is required
Get development approval
Brent Savidant - Planning Director
248.524.3366
[email protected]
Building Inspection
Determine if a building inspection is needed
Determine if proposal is permitted
Alterations of a building or property may require the submittal of
a Site Plan for review
Steve Burns or Rick Kessler
248.524.3367
[email protected]
[email protected]
Fire Safety
File an Occupancy Permit Application
The Fire Department will contact you after review
Schedule a fire inspection
Ensure the building and/or fire protection systems are adequate
David Roberts Assistant Fire Chief/Fire Marshal
248.524.3419
[email protected]
Signs
Determine if your business requires a sign permit,
see Ordinance Ch. 85
Paul Evans - Zoning Specialist
Assessments
Create a Personal Property Account
Nino Licari - City Assessor
Business Licensing
Contact our City Clerk's Office for business license requirements
For State of Michigan licensing requirements:
http://michigan.gov/statelicensesearch
Aileen Bittner - City Clerk
248.524.3317
[email protected]
Other Important Contacts
Food service establishments:
contact the Oakland County Health Department
County and State registries for assumed business names
Oakland County Health Division
248.858.1280, www.oakgov.com
www.oakgov.com/clerkrod
www.michigan.gov/lara
For any additional questions, please contact Glenn Lapin (see above).
Presentation to MEDC
April 15, 2011
Highlights of
Economic Gardening/Development Toolbox
Survey of Michigan Businesses
Members of the
Michigan Manufacturers Association
1
Agenda
• Survey Overview & Methodology
• Respondent Demographics
• Preferred Tools - All Companies
• Preferred Tools – Different Sub-Groups
• Profiles of More Likely Users of Selected Tools
• Observations & Discussion
2
Overview
• Online survey of members of the Michigan
Manufacturers Association and the Small Business
Association of Michigan
• To better understand relative perceived value of
economic gardening and economic development “tools”
to support growth of Michigan businesses in general,
and Stage 2 companies in particular.
• Survey conducted and analyzed by Shepherd Advisors
in March/April 2011
3
24 Tools Considered
• Economic Gardening Tools
– Informational
– Connectivity
– Infrastructure
• Traditional Economic Development Tools
– Financing
– Regulatory
• MEDC Programs Under Consideration
4
Survey Methodology
• Online survey was conducted March 30- April 5, 2011
• Surveyed members of the Michigan Manufacturers Association and
the Small Business Association of Michigan
– Invitations send to a pool of 8215 Michigan businesses – 526 2urveys received
– 6.3% response rate, of which 75% were complete responses
• Respondents provided:
– Company demographics
– Perceived value of 24 economic gardening/development tools to help growth.
• Ratings ranged from 1-Not at all valuable to 5 – Very Valuable
– Top 5 tools as priorities from the entire list of tools
– Preferences for the types of groups to provide services.
• Survey only measured opinions of Michigan business respondents
regarding their perceived value of various economic
gardening/development tools. Survey does not include any analysis
of the potential economic impact that these tools may provide.
5
Respondent Demographics
Type of Companies
Location
Number of Employees
Annual Revenues
Sales Growth Expectations
Staff Growth Expectations
6
Types of Companies that Took The Survey
What industry is your company engaged in
31%
Manufacturing
Professional & Technical Services
13%
• 93% Privately
Held
• 7% Public
9%
Finance and Insurance
Retail Trade
7%
Health Care and Social Assistance
5%
Construction
5%
2%
Arts, Entertainment, and Recreation
Information
2%
Agriculture, Forestry, Fishing
2%
Wholesale Trade
2%
Accommodation and Food Services
2%
Transportation & Warehousing
2%
Education Services
2%
•
Other
17%
0%
5%
10%
15%
20%
25%
30%
35%
Other = (Self Reported
Other + categories
with less than 1%)
Survey respondents include
large and small companies from across the state
Businesses' Primary Location Region of Michigan
Great
Lakes Bay
Region
5%
West
Michigan
31%
UP
2%
Southeast
Michigan
31%
Number of Employees
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
23%
19%
4%
1-4
Central
Michigan
22%
Northern
Lower
Peninsula
9%
38%
34%
33%
17%
5%
11%
6%
5%
5-9
10-49 50-99 100Manufacturing
All Other 249
2%
1%
250499
3%
500+
Annual Revenues
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
41%
33%
30%
22%
17%
7%
5%
7%
5%
7%
3%
1%
3%
6%
2%
1%
8
<$500K $500K - $1M - $10M - $25M- $50M - $100M - $500 M
$1M
$10M $25M $50M $100M $500M
+
About a third of survey respondents
planned on annual sales growth of 16% or more
Projected rate of annual sales growth
over the next 2 years
70%
60%
59%
Manufacturing
55%
All Other
50%
40%
30%
20%
10%
23%
18%
18%
5% 6%
5%
7%
2%
0%
1% to 15%
16% to 25%
26% to 50%
51% or larger
annual increase annual increase annual increase annual increase
Don't know
9
One in five respondents planned on adding 10
or more staff over the next 2 years
Plans to add staff over next two years
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
41%
43%
42%
Manufacturing
All Other
24%
20%
7%
2% 2%
Reduce staff
3%
5% 5%
1%
Maintain
Add 1-9 staff Add 10-49 staff Add 50-99 staff
current staffing
levels
Don't know
10
Preferred Tools – All Companies
To Improve Marketing/Sales Effectiveness
To Improve Senior Management Capabilities
To Improve Access to Capital
Other Tools to Support Growth
Ratings & Top 5 Priorities
Preferred Service Delivery Channels
11
Web Presence & Targeted Market Research Rate
Most Valuable for >50% of Respondents
Tools to Improve Marketing and Sales Effectiveness
IMPROVING YOUR WEB PRESENCE
22%
TARGETED MARKET RESEARCH
19%
BUY MICHIGAN
12%
9%
0%
•
20%
16%
GEOGRAPHIC INFO SYSTEMS (GIS)
4
31%
13%
INDUSTRY & MARKET ASSESSMENTS
EXPORT ASSISTANCE
34%
14%
9%
7%
10%
20%
30%
40%
50%
60%
5
Graphs show percent of survey takers who rated each tool
either 4 or 5 (Very Valuable) on a scale of 1-5
“Identifying Company’s to Partner With” seen as
“Very Valuable” to Nearly 30%
Tools to Improve Company's Sr. Management Capabilities
IDENTIFYING COMPANIES TO PARTNER WITH
25%
PEER-TO-PEER GROUPS
24%
19%
MANAGEMENT TRAINING
24%
18%
GROWTH STRATEGY CONSULTATION
28%
22%
GROWTH READINESS ASSESSMENT
18%
20%
RECRUITING SKILLED MANAGERS
16%
EXTERNAL GROWTH MANAGEMENT EXPERTS
15%
PART-TIME EXECUTIVE-LEVEL MANAGEMENT
12%
0%
4
10%
17%
12%
10%
7%
20%
30%
40%
50%
60%
5
13
Most Companies Want Cheap Financing, Many
Want Grants, A Good Number Want Equity
Tools to Access Capital for Growth
ACCESS TO LOW OR NO
INTEREST FINANCING
ACCESS TO GRANTS for
R&D
ACCESS TO EQUITY
CAPITAL
0%
14%
40%
12%
29%
10%
16%
10%
20%
30%
4
40%
50%
60%
5
14
Tax Credits, Skilled Workforce, and Centralized
Tax/Reg Center are Quite Valuable for >50%
Other Tools that Could help Company Grow
20%
ACCESS TO TAX CREDITS
SKILLED WORKFORCE -
22%
CENTRALIZED TAX & REGULATION INFORMATION -
21%
AN OMBUDSMAN or “One Stop Shop”
31%
32%
18%
GRANT WRITING ASSISTANCE
17%
15%
12%
R&D CONNECTIONS TO UNIVERSITIES
R&D CONNECTIONS WITH NATIONAL RESEARCH LABS
37%
7%
0%
17%
12%
4
8%
10%
20%
30%
40%
5
50%
60%
15
Value Ratings Across All Tools
IMPROVING WEB PRESENCE
LOW/NO INTEREST FINANCING
SKILLED WORKFORCE
IDENTIFYING COs. TO PARTNER W/
CENTRALIZED TAX & REG. INFO.
PEER-TO-PEER GROUPS
MANAGEMENT TRAINING
ACCESS TO GRANTS for R&D
GROWTH STRATEGY CONSULT.
GROWTH READINESS ASSESS.
AN OMBUDSMAN or “ONE STOP SHOP"
BUY MICHIGAN
INDUSTRY & MKT ASSESSMENTS
ACCESS TO EQUITY CAPITAL
EXTERNAL GROWTH MGT EXPERTS
R&D CONNECTIONS TO UNIV
GEOGRAPHIC INFO SYSTEMS (GIS)
PART-TIME EXECUTIVE-LEVEL MGT
EXPORT ASSISTANCE
R&D CONNECTIONS-NAT. LABS
20%
37%
22%
34%
14%
40%
22%
31%
25%
28%
21%
32%
19%
31%
24%
19%
24%
18%
12%
29%
22%
18%
20%
17%
18%
17%
13%
20%
15%
17%
4
16%
14%
16%
12%
10%
16%
15%
10%
12%
12%
12%
9%
12%
7%
9%
7%
7%
8%
0%
10%
20%
30%
40%
5
50%
60%
“Top 5” Tool Selected Across All Businesses
Low/No Interest Financing
Improving Web Presence
Identifying Cos. to Partner With
Targeted Mkt Research
Skilled Workforce
Access to Tax Credits
Management Training
Growth Strategy Consultation
Centralized Tax and Reg. Info.
Access to Grants
Industry & Mkt Assessments
Peer-to-Peer Groups
"Buy Michigan"
Access to Equity Capital
Recruiting Skilled Mgrs. & Execs.
An Ombudsman for Gov't Issues
Grant Writing Assistance
R&D Connections - Universities
Growth Readiness Assessment
Executive-Level Mgt Sharing
Export Assistance
GIS
R&D Connections - National Labs
External Growth Mgt Experts
46%
39%
39%
34%
34%
32%
25%
24%
22%
22%
22%
21%
19%
13%
10%
10%
10%
9%
8%
8%
8%
Shows % of all respondents who picked each
Tool as a top 5 priority
Traditional Economic Development Tool
Economic Gardening Tool
New MEDC Tool
5%
4%
3%
0%
10%
20%
30%
40%
50%
Economic Development Organizations and Trade
Associations are Highly “Preferred” Partners
Types of organizations preferred to work with to receive these services
Types of organizations preferred to work with to receive these services
Percent of respondents w ho selected each cateogry w hen picking top 3
Percent of respondents who selected each category when picking 3
Local economic development organizations
35%
Trade associations
35%
33%
Regional economic development organizations
30%
No Preference
24%
Chambers of commerce
20%
Business innovation and incubation centers
19%
Universities & community colleges
State government agencies
14%
0% 5% 10% 15% 20% 25% 30% 35% 40%
18
Preferred Tools - Different Sub-groups
Manufacturing vs. All Others
Lower vs. Higher Sales Growth Expectations
Varying Business Size (Revenues)
Stage 2 Growth Companies
19
“Top 5” Services by Industry
(Beyond Low/No Cost Financing)
Tool
Manufacturing
All Other
Skilled Workforce
49%
27%
37%
29%
Targeted Marketing Research
36%
33%
Access to Grants
31%
17%
Identifying Companies to Partner With
29%
43%
Improving Your Web Presence
26%
45%
Management Training
24%
26%
19%
26%
•
•
•
Tables show % of respondents in each subgroup who selected
that tool as a top 5 priority
The darker shading indicates that more than 40% of
respondents in that subgroup selected the tool
The lighter shading indicates that the tool was selected a
valuable tool for that subgroup
20
“Top 5” Services by Sales Growth Expectations
1-15% Sales
Growth
16% or Greater
Growth
Identifying Companies to Partner
With
40%
35%
39%
30%
37%
30%
Skilled Workforce
33%
37%
30%
30%
Management Training
25%
24%
Centralized Tax and Regulation
Information
24%
20%
Tools
21
“Top 5” Selected Services by Company Revenues
Tool
Under $1M
$1-$50M
$50+ Million
48%
36%
12%
45%
37%
20%
Skilled Workforce
19%
45%
48%
33%
36%
24%
28%
31%
52%
Management Training
21%
30%
12%
Centralized Tax and Regulation Info
21%
22%
36%
Access to Grants
23%
20%
32%
Peer-to-Peer Groups
26%
19%
12%
An Ombudsman for Gov Issues
7%
10%
32%
22
- Definition -
“Stage 2 Growth-Oriented Companies”
Companies w/ 10-99 Employees (237)
+
Companies w/ $1M - 50M in Sales (247)
= 299 Companies (57% of All Firms)
AND
Companies who expect to grow >16%
= 86 Stage 2 Growth Companies (29% of Stage 2)
23
Industry Profile
Manufacturing
47.7%
Professional & Technical Services
Retail Trade
Health Care and Social Assistance
12.8%
7.0%
4.7%
Finance and Insurance
3.5%
Information
3.5%
Wholesale Trade
3.5%
Construction
3.5%
Other
0.0%
14.2%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
24
Second Stage Growth Companies - % 4 and % 5
27%
24%
SKILLED WORKFORCE
ACCESS TO LOW/NO INTEREST FIN.
CENTRALIZED TAX & REG. INFO
IDENTIFYING COs TO PARTNER WITH
ACCESS TO GRANTS for R&D
IMPROVING YOUR WEB PRESENCE
GROWTH READINESS ASSESSMENT
PEER-TO-PEER GROUPS
MANAGEMENT TRAINING
GROWTH STRATEGY CONSULT.
AN OMBUDSMAN
INDUSTRY & MKT ASSESSMENTS
EXTERNAL GROWTH MGT EXPERTS
"BUY MICHIGAN"
ACCESS TO EQUITY CAPITAL
R&D CONNECTIONS TO UNIV.
PART-TIME EXECUTIVE-LEVEL MGT
GIS
R&D CONN. W/ NATIONAL LABS
EXPORT ASSISTANCE
43%
43%
14%
51%
27%
35%
32%
26%
18%
39%
25%
29%
31%
21%
19%
32%
30%
21%
27%
23%
30%
21%
24%
20%
27%
11%
19%
17%
22%
14%
25%
10%
12%
22%
14%
20%
14%
14%
13%
12%
13%
10%
9%
14%
9%
13%
0%
20%
40%
4
60%
5
25
80%
Second Stage Growth Companies –
“Top 5” Selected Tools
Low/No Interest Financing
Skilled Workforce
Identifying Cos. to Partner With
Management Training
Access to Grants
Improving Web Presence
Recruiting Skilled Mgrs & Execs.
Industry & Mkt Assessments
Centralized Tax and Reg. Info.
Peer-to-Peer Groups
"Buy Michigan"
Executive-Level Mgt Sharing
R&D Connections - Universities
Export Assistance
GIS
External Growth Mgt Experts
An Ombudsman
R&D Connections - National Labs
38%
36%
27%
26%
23%
23%
22%
21%
20%
17%
16%
16%
16%
16%
15%
12%
8%
7%
7%
6%
5%
5%
5%
3%
0%
5%
10%
26
15%
20%
25%
30%
35%
40%
45%
“Top 5” Selected Services of 2nd Stage Growth
Companies – Manufacturers vs. Others (Top 12)
Tool
Access to Low/No Interest Financing
Skilled Workforce
Management Training
Access to Grants
Peer-to-Peer Groups
Centralized Tax and Regulation
Information
•
•
•
All
38%
36%
27%
26%
23%
23%
22%
21%
20%
17%
16%
Manufacturers
37%
41%
24%
24%
20%
20%
32%
27%
12%
15%
15%
16%
15%
All Other
Industries
40%
31%
29%
27%
27%
27%
13%
16%
27%
20%
18%
18%
Tables show % of respondents in each subgroup who selected tool as a top 5 priority
The darker shading indicates that more than 40% of respondents in that subgroup selected the tool
The lighter shading indicates that the tool was selected a valuable tool for that subgroup
27
“Top 5” Selected Services of 2nd Stage Growth
Companies – Manufacturers vs. Others (Other 12)
Tool
Industry & Market Assessments
Recruiting Skilled Managers & Executives
"Buy Michigan" – Preferred Procurement
Executive-Level Management Sharing
Export Assistance
Build R&D Connections - Universities
An Ombudsman for Government Issues
External Growth Management Experts
Geographic Information Systems (GIS)
Build R&D Connections - National Labs
•
•
•
All
16%
16%
15%
12%
8%
7%
7%
6%
5%
5%
5%
3%
Manufacturers
17%
17%
15%
12%
5%
10%
10%
7%
0%
2%
5%
2%
All Other
Industries
16%
16%
16%
11%
11%
4%
4%
4%
9%
7%
4%
4%
Tables show % of respondents in each subgroup who selected tool as a top 5 priority
The darker shading indicates that more than 40% of respondents in that subgroup selected the tool
The lighter shading indicates that the tool was selected a valuable tool for that subgroup
28
Profiles of Likely Users of Selected Tools
Buy Michigan
Ombudsman
Export Assistance
29
Profile of Companies That Indicated Having a
“Buy Michigan” Program Would be “Very Valuable”
Those rating “Buy Michigan” as 5=Very Valuable
were disproportionately more likely to be:
• Planning to add 10 or more staff
• Planning for 16% or more in revenue growth
• A B2B company (rather than a B2C company)
Profile of Companies That Indicated Having an
“Ombudsman” Would be “Very Valuable”
Those rating “Ombudsman” as 5=Very Valuable
• Larger with over 50 employees
• Adding 10 or more staff
• Planning for revenue growth of 16% or more
• A Manufacturer (Slightly more likely)
31
Profile of Companies That Indicated Having
“Export Assistance” Would be “Very Valuable”
Those rating “Export Assistance” as 5=Very Valuable
• Manufacturers (nearly twice as likely)
– Fabricated metal product manufacturing
– Electrical equipment, appliance, and component manufacturing
• Have more than 100 employees and over $50M in revenues
• Adding 10 or more staff
• Planning for revenue growth of 16% or more
• More interested in R&D (connections and grants)
32
Observations & Discussion
33
Some Observations From Survey
• Manufacturers were more likely to have more sales, more employees,
and greater hiring expectations than non-manufacturers
• Stage 2 companies represented majority of survey respondents, and
Stage 2 Growth companies represented nearly 30% of all Stage 2
• On the whole, companies value most highly services that access lowcost capital, increase access to skilled workforce, and to increase
sales (web support, targeted market research, and partnerships)
• There are meaningful service preference differences between
manufacturers vs. non-manufacturers, smaller vs. larger companies
• Some services have broad appeal, while others are more niche
– Users of niche services can be broadly characterized and targeted
• Stage 2 Growth Companies place even greater value on workforce,
financing, market research, & web, strategy & management support
Discussion
•
•
•
•
Questions & Clarifications
Learnings
Considerations & Implications
Next Steps
Thank You!
35

ZONING ORDINANCE - Michigan Association of Planning

Transcription

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