The Michigan Economic Development Corp. has officially approved the designation of a satellite SmartZone encompassing 1,000 acres along Lake Macatawa in Holland.
The approval comes more than a year after the Holland SmartZone Financing Authority Board announced a formal partnership with the Grand Rapids SmartZone to create a satellite location.
The Holland satellite SmartZone relies on a formal partnership with the existing Grand Rapids SmartZone, which has been operational since 2002, and the official designation will allow collaboration between the two communities to support the growth of technology- or research-related businesses and jobs.
Jennifer Owens, president of Lakeshore Advantage, said her reaction to the MEDC approval is extreme excitement and she is ready to have the regional partnership move from a concept to a reality.
“It has been more than a year in the making through lots of twists and turns throughout, and we are just really excited to have implementation,” said Owens.
As a designated satellite SmartZone, the Holland location will be able to use a tax increment financing plan to collect nearly 50 percent of increases in property tax value to reinvest into supporting technology business development. The existing Grand Rapids SmartZone also will be able to extend its tax capture by an additional 15 years with its partnership with Holland, according to the press release.
Kara Woods, economic development director for the city of Grand Rapids, said Grand Rapids SmartZone officials are pleased to continue the work on the important regional partnership.
“It will continue to allow us to work toward making our regional entrepreneurial ecosystem strong,” said Woods. “We are very excited about the future collaboration that will result from this program.”
Fredrick Molnar, MEDC vice president of entrepreneurship and innovation, said the MEDC is impressed with the collaboration between the Holland and Grand Rapids SmartZones.
“Both have positioned themselves well to move the high-tech startup business initiative forward, creating more and higher wage jobs in western Michigan,” said Molnar.
Owens said the hope is to deploy existing programs of the Grand Rapids SmartZone for use by Holland-area companies, rather than having to re-invent the wheel.
“The key point for us is, when it relates to entrepreneurship in West Michigan, we are really one region,” said Owens.
“This is really a great chance for us to learn what has worked and maybe what has not worked in the last 13 years of the Grand Rapids SmartZone and put those tried-and-true programming and support services to work in the Holland area.”
Daniela Garcia, state representative for the 90th District, introduced House Bill No. 4226 earlier this year with sponsorship from a bipartisan group of legislators to amend the 1986 Local Development Financing Act and a section from Public Act 104 from 2008 to allow the designation of additional satellite SmartZones.
The legislation also had support from Senate Majority Leader Arlan Meekhof and ultimately was approved by Gov. Rick Snyder July 21, 2015, and enrolled as Public Act 125. The new Public Act allowed the MEDC to approve up to six additional satellite locations through a competitive application process.
Other organizations that helped move the regional partnership forward were Ottawa County, West Coast Chamber of Commerce, Grand Rapids Area Chamber of Commerce, Community Foundation of the Holland/Zeeland area, The Right Place, Talent 2025, eMerge, Varnum and MSU, among others.
Lakeshore Advantage has been contracted by Holland’s Local Development Financing Authority Board for the SmartZone to help administer the program, according to Owens.
The regional economic development organization’s role involves working on a strategic plan, facilitating board discussions on prioritization of resources, and helping to implement the program priorities.
“There (are) pretty intense reports that are not only presented to the local units of government but also the Department of Treasury and the (MEDC) to make sure the funds are put to work in the way the law allows,” said Owens.
“We will be taking on the reporting element to provide how those resources are being spent and the results on the investment.”
The next step in the process of moving the SmartZone program forward is formally presenting a business and tax increment financing plan to the Local Development Financing Authority Board, Holland City Council, Holland Charter Township board of trustees, MEDC and the Michigan Department of Treasury.
Depending on plan approval, the zone would begin generating tax collection revenue in late 2016.
Owens indicated the zone is estimated to collect nearly $7.5 million in tax increment during the next 15-year period, which is up from Lakeshore Advantage’s initial forecast of $6.3 million last October.
“We had to redo that estimate based on a new year for tax capture because the last estimate was based on 2014,” said Owens.
“It is a conservative estimate for the amount we think will be captured and that is based on a 1 percent growth rate. We are very optimistic, given the prime real estate in the SmartZone, that we will see growth significantly higher than the 1 percent rate.”
The Holland satellite SmartZone also is focusing on providing an informational series, launching in early January, by a team of experts who will provide educational support for businesses and entrepreneurs, according to Owens.
“We also will be potentially launching a team of professionals who will provide in-kind support to these entrepreneurs to assist them on what their needs might be,” said Owens.
“Initially, we are going to kind of create the environment before we jump right into attracting companies. First, we want to create that net and then move toward what is the future in terms of relocation or growth in a SmartZone.”
Holland’s satellite SmartZone boundaries comprise approximately 1,000 acres in Holland and Holland Township, running from the 138,000-square-foot Michigan State University Bioeconomy Institute at 242 Howard Ave. along the northern shoreline of Lake Macatawa.
MSU has made a commitment as the university research partner for the satellite SmartZone.
The geographic location of the SmartZone has been a “primary area of investment” for the local units of government for the community, and the resources may be able to support growth along the waterfront, according to Owens.
“We are hopeful this tool potentially may be able to help create some of those infrastructure investments that will encourage growth. For instance, the board has talked quite a bit about broadband investment as a priority,” said Owens. “(Broadband) would allow for high-speed access, and the waterfront may help stimulate additional business growth.”