The Smart Zones

April 16, 2002
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GRAND RAPIDS — When the Business Journal asked Doug Rothwell back in 2000 to define the term "SmartZone," he replied, "It's an industrial park on steroids."

At the time, he also agreed Grand Rapids already had a SmartZone in a sense — the Van Andel Institute (VAI) — and that the city was in the driver's seat in seeking official designation as a zone for smart development.

At the same time, Rothwell, president of the Michigan Economic Development Corp., was tactfully deprecating about the ballyhoo that an unknown entity — Muskegon Area First — was generating in support for its application for a SmartZone designation of its own.

Rothwell was batting .500 that day.

A year ago April, Grand Rapids did, indeed, win one of the state's 11 designations for a SmartZone.

But so did Muskegon.

And Grand Valley State University (GVSU) is a big part of both zones.

SmartZones are economic development areas designed to foster technology-based businesses and job development. The cities in which they lie can capture the growth in property taxes within such zones for further zone development. Cities, for instance, can use such revenue to buy property, extend or improve utilities, market the zones to tech businesses and even to finance business incubators.

Indeed, such an incubator already is in operation in Muskegon — albeit a few blocks from that town's SmartZone, a lakefront brownfield where infrastructure now is under construction.

The incubators are two small firms in the basement of the headquarters of the Westwood Group, a building that also houses the community's chamber of commerce.

GVSU supports the zone jointly with county government and Muskegon City Hall.

GVSU's planned Business Acceleration Center — a 40,000- to 50,000-square-foot facility — is to occupy a lakefront site as the hub of a corporate research park devoted to technical development, within which retail, residential and recreational components are mixed. The center will house labs and more incubator space.

The technical focus is to be on energy, energy product development, and — the most critical hope for all SmartZones — commercial exploitation of R&D. GVSU's schools of business and engineering will play roles in R&D and commercialization.

  

Fittingly, the zone as a site was part of Muskegon's first two major economic transitions: from wilderness to 19th century lumbering, and from lumbering to 20th century heavy industry. Indeed, the narrow inlet on which it sits faces a large and unsightly aggregate storage site, the owners of which already have committed to relocation.

According to Muskegon Area First's executive director, Todd Battle, the zone's infrastructure project includes the long-awaited completion of U.S. 31's extension skirting downtown.

The Grand Rapids SmartZone is a GVSU partnership with City Hall, VAI, Grand Rapids Community College and The Right Place Program.

The zone's focus is biotechnology arising out of VAI research and linked to GVSU's nearby Center for Health Professions (to be completed in 2003), and Spectrum Health's recently started cardiac care center (due for completion in 2004).

The zone currently amounts to 115 acres, and has the unofficial distinction of being the northwest terminus-designate of Michigan's emerging health science corridor.

Officials expect the zone's business build-up to take some time, though renovation of some of the older buildings in the area already has begun. The city says it also has vacant property on the Grand River that it hopes to develop as non-contiguous parts of the zone.

Rothwell reports that a dozen businesses have already located in the state's SmartZones, something he finds encouraging. He explained that those firms made their decisions despite a recession that burdened almost all businesses last year. Moreover, he's happy because no SmartZones even existed in Michigan 10 months ago.

He said the MEDC plans to begin marketing the official SmartZone brand nationally this year and also will be marketing the zones by industry clusters.

According to officials who oversee the zones, all are courting and talking with potential prospects.

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