WEST MICHIGAN ECONOMIC PARTNERHIP
A NEXT MICHIGAN DEVELOPMENT CORPORATION
MEETING MINUTES
Wednesday May 8, 2013 at 1:30pm
Wisner Center, KDL Cascade Branch, 2870 Jacksmith Ave. SE, Grand Rapids, MI 49546
Present:
Cathy Brubaker-Clarke, Ben Swayze, Lisa Golder, Judy Kell, Mary Swanson
Kara Wood, Rob Beahan, Kelli VandenBerg
Rick Chapla, Maulin Pont
Karla Campbell (MEDC), Amy Lux (MEDC)
Staff:
Guests:
Meeting notices were posted at the offices of the participating units of government.
1. Call To Order
With quorum present, the meeting was called to order by Chair Cathy Brubaker-Clarke at 2:00 pm.
2. Approval of Agenda
MOVED, SECONDED AND CARRIED APPROVAL OF TODAY’S AGENDA.
3.
Approval of April 10, 2013 minutes
MOVED, SECONDED AND CARRIED THAT THE MINUTES OF THE APRIL 10, 2013 MEETING ARE
APPROVED.
4.
Approval of Bills
No bills at this moment to discuss.
5.
Old Business
a. Work Plan Update
The subcommittee is meeting next week and will update the board during June’s WMEP meeting.
b. Ren Zone discussion with Karla Campbell & Amy Lux from MEDC
Karla Campbell and Amy Lux, our Ren Zone leads at the MEDC, addressed the WMEP board on the
topics of Ren Zones and Marketing Zones. Documents were distributed establishing the process and
policy for both types of zones. Highlights are:

Ren Zones are the most lucrative tool the NMDCs have but at the same time, it is the
tool the MEDC hopes we use the least. This is due to a few changes: New companies
and/or new people would not be able to get Ren Zone benefits, even if they are
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already certified for that business tax benefit elsewhere in the state. Another change
is the phase out in personal property tax, which is a game changer and the decrease
in benefits for Ren Zone properties. Ren zones demand strict statutory
requirements that companies might not be able to maintain throughout the term of
the agreement and the MEDC is revoking a lot of Ren Zones lately due to this
reason. In addition, the MSF may require back taxes to be paid. However, an option
is PA198, which is the route highly encouraged by the MEDC. There are a lot more
statutory issues with a Ren Zone than with a PA 198 or a PA 328, and companies
will still get a lot of tax abatement without being held to such a strong agreement. It
might actually be more lucrative for the company than having a Ren Zone
designation, considering the changes stated earlier.

The MEDC has realized companies cannot forecast that far ahead (10 years as
required by Ren Zones). 3-5 years is a more realistic and accurate view to what is in
their control. Ren Zones should be considered for attraction projects, large
investments, large employment corporations, and business of that nature.

Cathy brought to attention that PA 198 and/or PA 328 are not new for some of the
local units of government that comprise the WMEP; Ren Zone designation was the
only new tool available for these LUGs. On the other hand, by virtue of participation
in the WMEP, cities like Kentwood, who wouldn’t normally have availability to PA
198 and/or PA 328, would now have access to this tool. (This information needs to
be confirmed by Karla.) The MEDC will revoke a Ren Zone if
requirements/agreements are not met; it is less likely to do so with a PA198/PA328.

To meet a Ren Zone threshold, the investments/job creations have to be big, should
be a new investment to Michigan (like an attraction project). It would be hard for an
existing company in Michigan to expand and get a Ren Zone designation for that
new site. Relocations have strict requirements also in terms of jobs transferred to
the total of proposed jobs created at the site. MSF requires the owner of the land to
enter into the agreement.

Ren Zones are highly discouraged now, unless you have an exceptional project. It
should not be the go-to tool in our “toolbox”.

Ren Zones are project and parcel specific and acres have to be in a contiguous area.
There is a total of 25 Ren Zone areas available for designation to all five NMDCs, on a
first come, first served basis

Next Michigan Marketing Zones: These are areas that, after designation by MEDC
and approval by MSF, have the potential to receive a Ren Zone designation, and only
within those marketing zones could an NMDC recommend a Ren Zone to be placed.
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They are not referred as “marketing zones” in the statue but that is the intent. It is
important to follow statutory rules.

As per MEDC process and procedure, and as far as the WMEP is concerned, we will
have, at most, seven Marketing Zones (one for each LUG plus one for each county)
that shall not exceed 200 acres each, for a total of 1,400 acres (if all seven zones are
designated). The process is to identify the area(s), submit to the Official Boundary at
MEDC, provide a map of all the zones, showing parcels, parcel numbers, ownership,
with acreage clearly marked on all maps. The MEDC meets to approve/deny.

MEDC marketing funds are matching funds. It is the WMEP’s decision how to market
the properties. Properties marketed do not have to be in the marketing zone. The
MSF Fund Manager has the delegated authority to designate the marketing zones
selected by a NMDC.

In terms of contiguous area, the MEDC can be flexible for marketing, but the statue
is 200 acres. The MEDC will ask an attorney for the interpretation and definition of
contiguous in order to get a clear understanding of this matter. All seven marketing
zones can be in one city/county/township. Karla said we need to operate, when we
are thinking of this, as “one big township”.

All marketing zones approved will end at the same time: December 21, 2023. The
longer we wait, the less time the area remains a marketing zone. This was a policy
decision because the MEDC did not want the Ren Zone program to go for too long,
for marketing purposes.

There are two kinds of zones: Marketing Zones (until 2023) and Ren Zones (up to 10
years, 7 full years plus 3 years for phase out). However, as far as the WMEP is
concerned, there is only one type of zone designation, and that is the Marketing
Zones for a total of 1,400 acres. The Ren Zones can be designated at any time after
the Marketing Zones are designated. Keep in mind, for the purpose of marketing
zones; if all seven marketing zones are designated but we stayed under the 1,400
acres, there are provisions that allow us to expand later, as long as we don’t surpass
the maximum acreage. We cannot subtract land, or switch land either. Areas should
be shovel-ready.

Marketing designation is statutory and is comprised to the area within the
boundaries of the cities, villages, and townships which are parties to the interlocal
agreement.

Amy will email us the Marketing Zone application. The MEDC committee that will
designate the zones is going to be comprised of Valerie Hoag, senior vice president
for Business Development, Karla, Amy and an attorney. Information about the land
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owner needs to be included, but only for Ren Zone purposes is the owner asked to
enter into an agreement (not for Marketing Zones).

Terminology is really important, when using the word Ren Zone, particularly when
putting it in writing or with site selectors, for example.

The statue limits the use of MSF designated Ren Zone if the company would qualify
to get a Ren Zone under Next Michigan.

Proof of financing, background checks on companies for both state and federal
standings, and the sort may be subject to the Freedom of Information Act but
confidentiality can be requested. Rick suggested that this needs to be done even
before it goes to the state, to avoid any embarrassing situations later.

There is a development agreement template from MEDC that is to be used.
Companies sign first before meeting to avoid wasting time negotiating at the
meeting.

No public hearing requirements imposed by the state are required for marketing
zone designation. MEDC prefers a local resolution rather than an MEDC resolution;
both can be done if wanted.
c. Discussion of possible Ren Zones for each community
Because of time constraints, it was decided by the Board to move the rest of the agenda items for
discussion to the next meeting of the WMEP on June 12, 2013. This meeting will take place at 3:00
p.m. in Kentwood. The Board was asked to bring maps that include addresses, pictures, and
approximation on acreage.
6.
New Business
a. Grand agreement from MEDC
To be discussed at the next WMEP meeting.
b. Memorandum of understanding
To be discussed at the next WMEP meeting.
7.
Reports
To be discussed at the next WMEP meeting, if any reports are available.
8.
Public Comment / Board comments
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No public comments.
9.
Other Business
Rick brought to the attention of the Board that the grant agreement for the marketing funds does
have a one for one requirement. The Grand Rapids Community Foundation already declined a
request from Rick. Cathy recommended $3K into the 2014 City of Muskegon budget. The Board will
further discuss the issue of funding at a future meeting.
10.
Adjournment
With no other matters to attend at this time, the meeting adjourned at 3:20 p.m.