January 22, 2010 - AECOM was engaged by a consortium that included Genesee County and the City of Flint to complete a Comprehensive Economic Development Strategy (CEDS) for the entirety of Genesee County. Core goals of this CEDS strategy are clear:

1. Secure federal funding for priority economic development projects that benefit the entire county
2. Focus strategic thinking on economic development, to start moving the County forward again
3. Recommend short-term strategies to retain jobs, along with mid-term and long-term strategies to re-ignite job creation.

The CEDS approach included extensive interviews, focus groups, and visioning sessions with key public, private, and institutional stakeholders, the CEDS Steering Committee, and county residents, covering south, central, and northern portions of the county. These interviews reinforced a clear sense of frustration with the status quo across the county regarding economic development and job creation, and a clear need to identify practical strategies that can help the entire county move forward, in a more focused and cohesive manner.

Countywide Job Growth

A core goal of the CEDS plan is to foster job creation. Opportunities fall into three categories:

Capital Projects - For the short-term, a focus on capital spending for specific economic development projects that can sustain construction employment, and lay the groundwork for long-term economic progress. The CEDS plan identifies about 1.2 million in potential projects across the county, with about $400 million in work that could have broader long-term economic benefits. In principal, a tenyear plan to reinvest $1 billion in core infrastructure across the county could support creation of over 16,000 jobs and about $1.8 billion in wages, both in the construction industry, and in other sectors.

Maximize Existing Linkages - Over the short-term, a focus on jobs sustained by maximizing existing local opportunities, building from a core focus in job retention and expansion. Short-term targets for economic development are as follows:

• Stable automotive and health care sectors
• Construction employment tied to capital projects
• Continuation of government contract acquisition through PTAC
• Further alignment and growth of key industries including education and medical services
• Small business support and incubation

Long-term Job Growth Opportunities - There are a host of long-term job growth opportunities in Genesee County that link with a cohesive countywide strategy and focused leadership. The core emphasis of long-term industry attraction strategies should focus upon emerging connections between the medical, educational, agribusiness and the importance of access to water. Principals of sustainability should provide the backbone of industry development countywide. Target industries for long-term growth and development in Genesee County are fourfold:

• Water-intensive industries like food processing, manufacturing, farming, and chemical manufacturing.
• Renewable Energy including biofuels production, renewable energy generation and renewable energy component manufacturing.
• Cloud Computing/Technology Sustainability: Public investment in “green” infrastructure, organic and urban farming, downtown redevelopment, and advanced material technologies.

Job Growth Opportunities and Targets – Looking forward, job growth implications must reflect the reality of continued difficulty in the short-term, offset by opportunities for job growth in the mid- and long-term. Considerations include:

• Looking back to the 2003 / 2005 period, excluding manufacturing, the private sector did add jobs across the county, at an annualized rate of 700 new positions per year.
• Through 2011, allowing for auto industry stability, we realistic expect the county to add 200 to 300 positions per year, supported by existing programs such as PTAC.
• Looking beyond 2011, there is an essential need to drive job growth, building to a pace of 1,000 new positions per year. Achieving such a target is closely associated with the need for a more focused, cohesive approach to countywide economic development. This pace of growth would be consistent with historic trends in other Midwestern cities with industrial / blue collar traditions.

Core areas of job growth over the next 10 years include the following:

• Health care and education
• Finance, insurance, and real estate
• Professional and technical services
• Transportation and utilities

The plan suggests that through a focused approach to economic development, that a 12-year target of up to 9,000 new jobs be considered for the entire County.

Core Weaknesses and Threats

• The decline of GM has dramatically reshaped the local economy, which is far less integrated today compared to 20 years ago. In general, local companies are more dependent on their international supply chains for goods and services, and less linked to other local suppliers.
• Fragmented public leadership and duplication of public services
• A fragmented and under-funded approach to countywide economic development
• The reality of continued public sector financial challenges for the next 24 months, fed by nearterm reductions in state shared revenue and further reductions in property value.
• An array of historic traditions which have held the county back, and discouraged planning and regional coordination.
• In the context of a growing college and university cluster, the county appears to have difficulty attracting PhD level educators.

Strengths and Opportunities:

• The County offers a considerable supply of labor with competitive wage levels and skills that are applicable to numerous advanced manufacturing opportunities.
• The county offers tremendous institutional resources, including Kettering University, U of M Flint, Mott College, Baker College, GRCC, the Career Alliance, and a regionally significant health care cluster. These sectors are now more important to the area economy than manufacturing.
• A considerable inventory of vacant land and office, industrial, and distribution space is available at highly competitive rates.
• Robust rail and interstate transportation infrastructure is also in place to support existing office and industrial space, with connections to nationwide rail and interstate supply chains. County schools are also connected by a fibre-optic system, which is significant.
• Institutional financial support through groups such as the C.S. Mott Foundation, along with a broad array of incentive tools.
• Access to fresh water, in a national context where fresh water supplies are increasingly limited 
• Recently implemented renewable energy projects build a framework for further opportunities.
• A considerable base of recreational, civic, and cultural amenities across the County.
• GM investment about $200 million locally for the Chevy Volt could correlate with broader renewable energy and sustainability strategies.

The study confirmed the reality of broader structural factors that are beyond local control:

• The current recession is “a generational event”, which is dramatically reshaping the public and private sectors across the county. Significant short term challenges include access to capital for struggling private sector firms and looming public sector fiscal impacts and restructuring.
• Beyond the recession, the US is also dealing with the Impact of changing household structures, driven by Baby Boom households, many of whom are facing delayed retirement.
• The reality of long-term growth in energy and fuel prices locally and across the country, which is gradually influencing housing choices and locations for residences and businesses.
• The state economy across Michigan has been challenged since 2006. While near-term questions remain about the direction of state government leadership, the state’s underlying competitive position is still reasonably attractive compared to other Midwestern states.

Policy Framework
The path forward should be framed by the following elements:

• The public sector will be facing two difficult years ahead, which will have broader implications for how the entire county moves forward.
• There is critical need to build consensus at the county level, including organization strength with focused leadership and budget support for countywide economic development. These are the essential elements of any job creation and identification plan.
• Identifying core infrastructure projects that have broader long-term economic benefits, tied to potential local/state/federal funding.
• Developing a series of efforts to reinforce the current level of diversification in the economy, focused on education and health care. It should be recognized that economic conditions will improve only slowly over the next twenty four months.
• Making a decision to get organized, and take a less accidental and more deliberate approach to economic development.

CEDS Plan Short-Term Priorities
The strategy identifies a series of priorities within the next two years. The goal of initial priorities is to build a foundation upon which future growth will be based. Key priorities include:

Priority: Develop strategies to actively manage the evolving public sector fiscal crisis over the next twelve to twenty-four months.

Priority: Strengthen support for economic development with a clear mandate to pursue a countywide economic development agenda. Near-term issues include developing a streamlined permitting and web-based GIS database that includes an inventory of “shovel ready” properties.

Priority: Build consensus around priority projects and secure funding for initial implementation. Core themes include aviation, regional water, infrastructure & transportation.

Priority: The City of Flint implements citywide and downtown comprehensive plans

Resources
Financial resources will be critical to supporting economic development projects as well as delivery of basic county services. Locally, there are an array of project-specific financial tools that are available for specific opportunities, including TIF / tax credits / brownfield grants / existing revolving loan programs. The strategy also highlights a key strategic question, which is the need and support for a “community bank” to provide local access to capital. Nationally, there are several models for local capital formation:

• Pre-Seed Grant Funding for new concepts
• Seed / Investment Funding for projects with evolving business plans
• Loan Programs (SBA / Other) for more established business plans

The core challenge with these models is scale; most pre-seed and seed capital sources need to have between $10 million and $20 million in capital.

Please see attachment for the full report

Attachments:

CEDS Final Draft Report 1-22-10

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