GRAND RAPIDS — The city has accepted a $2 million Core Communities Fund grant from the Michigan Economic Development Corp. (MEDC) to kick start development of the Grand Rapids SmartZone.
City commissioners approved Tuesday two agreements with the MEDC, one that officially accepted the $2 million grant and another outlining responsibilities of the city and its SmartZone partners, Grand Rapids Community College, Grand Valley State University, the Right Place Program and the Van Andel Institute.
The MEDC plans to begin marketing the SmartZone brand nationally and by industry cluster this year. Under the agreement, the city will be allowed to use the SmartZone trademark and the local zone will be included in the MEDC’s SmartZone marketing and advertising campaigns.
The Grand Rapids SmartZone is designed to attract and stimulate growth of high tech businesses and jobs, particularly in the biotech sector. The roughly 115-acre zone encompasses the Van Andel Institute, Grand Valley State University’s new Center for Health Professions and the North Monroe Business District.
The MEDC’s Core Communities Fund (CCF), established through a $50 million state appropriation, provides eligible communities with gap-financing assistance in the form of loans and grants.
Communities awarded SmartZone status can apply for financing to expedite zone development. Funding awards are limited to $10 million per eligible community.
The city applied for the grant a year ago at the same time it submitted its proposal for SmartZone designation. It received SmartZone designation last April, along with 10 other Michigan communities.
Susan Novakoski, an MEDC spokesperson, said three of the state’s 11 SmartZone communities — Battle Creek, Lansing and Oakland County — have not applied for CCF funding.
The amount of CCF funding awarded to zones that did apply ranged from $500,000 to $10 million.
Kalamazoo received $500,000; Muskegon, $1 million; Wayne County’s Pinnacle project, $5 million; and Ann Arbor, $10 million. SmartZones in Houghton-Hancock, Mount Pleasant and Detroit all were awarded $2 million.
The Grand Rapids SmartZone did not request more than $2 million, she said.
Novakoski said application for CCF funding is an open and competitive process. The criteria used for all CCF are: project impact; project marketability; lack of adequate infrastructure or financing sources for it; local administrative capacity; and the level of local matching funds.
“Awardees agree to expedite the local development process by fast-track permitting procedures, streamlined regulatory requirements and standardized construction and building codes,” she noted.
Last October, the city established a Local Development Finance Authority, which is authorized to capture property tax growth within designated zone boundaries for up to 15 years to fund infrastructure enhancements, incubator space and marketing for the zone.
When the grant was originally applied for, the expectation was that it would be used to build incubator space, but the LDFA has yet to present its final SmartZone development plan for City Commission approval.