MEDC Designates 10 SmartZones

June 5, 2002
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GRAND RAPIDS — The Michigan Economic Development Corporation (MEDC) announced Wednesday that downtown Grand Rapids has won designation as one of the state’s 10 SmartZones.

Nine other areas selected for the designation also were revealed at a press conference at the Van Andel Institute (VAI) last week.

The city, Grand Rapids Community College (GRCC), Grand Valley State University (GVSU), The Right Place Program and the VAI partnered to develop the Grand Rapids SmartZone.

MEDC’s Jeff Kaczmarek, senior vice president of Business Services, said the SmartZone designations represent another nationally recognized “first” for the state of Michigan.

Michigan was the first to introduce Renaissance Zones, the first to fund a network of Technical Educational Centers, and the first to introduce a brownfield redevelopment program, which is widely recognized as one of the best programs in the country, he said.

“With the new SmartZone program, we’ve got another new tool now that’s going to help put Michigan on the national and international map,” Kaczmarek said. 

The program aims to stimulate the growth of technology-based businesses and jobs by creating recognized clusters of technological business and research institutions throughout the state.

The most successful technology hubs, both nationwide and worldwide, are those built around a clustering concept that combines the capabilities of research institutions, business and the local community to form synergistic relationships that can stimulate value-added technology development, Kaczmarek noted.

He said the Grand Rapids SmartZone will build on the singular strength of the VAI, as well as the sustained rebirth of downtown Grand Rapids and the commitment of regional institutions of higher learning. 

More specifically, he said, the zone will support the growing needs of new life sciences enterprises developed through the establishment of a Life Sciences Product Development Center, which will be housed in GVSU’s new Center for Health Professions building on the corner of Michigan Street and Lafayette Avenue. Ground will be broken on the new building next month.

Under Michigan’s SmartZone program, designated zones can capture all local property taxes within zone boundaries for use within the zone, as well as up to 50 percent of school operating taxes for up to 15 years.

According to the MEDC, SmartZone communities also are eligible to receive funding from the MEDC’s Core Communities Fund until tax increment revenues begin to materialize. 

The SmartZone program was established through amendments to the Local Development Financing Act, which allows municipalities to use tax increment financing for such purposes as property acquisition, infrastructure, business incubators, management and marketing.

The MEDC released a request for proposals on Aug. 3 last year, calling for applications from municipalities interested in receiving SmartZone designation. 

Over the last several months the MEDC reviewed more than 18 proposals, Kaczmarek said. Like Grand Rapids, the majority of areas selected for SmartZone designation are concentrated in the southern part of the state.

“Now the hard work starts,” said Birgit Klohs, president of The Right Place Program. “The heart of our zone application was the VAI. We wanted to focus on this very unique institution that has been built up on this hill.

“The synergies that are growing on this hill are really remarkable if you look at the institute, Spectrum Health and the new GVSU Center for Health Professions. Those synergies will help us really market this zone.”

Dave Van Andel, VAI chairman and CEO, said the institute is “thrilled” to have the SmartZone nearby because it means that the discoveries and ideas generated at the VAI have a better chance of seeing practical application in a short period of time.

“The awarding of this designation will enable the discoveries and scientific developments we expect to come through the VAI to be harnessed more effectively and have a greater economic impact as a result of that,” Van Andel remarked.

GVSU President Arend Lubbers said the university brings two immediate contributions to the SmartZone. The first is the Center for Health Professions, which will provide space for the research that will be key to the technology transfer envisioned for the SmartZone.

“Second, Seidman School of Business at Grand Valley is uniquely qualified to help entrepreneurs who have high-tech dreams but who need real world business experience to help bring their ideas to market,” Lubbers said.

“Grand Valley’s designation by the federal government as state headquarters for the Small Business Development program has brought to Grand Rapids exactly the kind of support these new high-tech entrepreneurs need. The timing could not have been better.” 

Juan Olivarez, GRCC president, said the greater Grand Rapids community will benefit tremendously from the collaboration efforts of the SmartZone partnership.

“The impact our combined efforts can have on science research and disease prevention at the global level will be mirrored in the economic development opportunities locally,” Olivarez remarked.

He said GRCC, along with GVSU, stands ready to create one-, two- and four-year programs in the applied sciences and to synchronize training to the needs of technology related institutions and emerging businesses.

The five partners of the Grand Rapids SmartZone are bringing together what each does best to create a solid economy for the future, noted Grand Rapids Mayor John Logie. The partnership will open a whole new frontier for Grand Rapids.

“Our goal here is to be No. 1 of the 10 cities that created SmartZones today,” Logie said. “You just watch us.”

The MEDC’s major goals for SmartZones are to:

  • Increase public awareness of Michigan as a great climate in which to both start and grow tech-based companies.

  • Develop a common brand that will give Michigan SmartZones recognizable distinction.

  • Create “nurturing” environments in each of the 10 SmartZones for the establishment and growth of small and emerging high-tech firms.

  • Foster a working partnership among business leaders, universities and units of government within the zone by requiring them to work together to earn the designation and oversee their zone.    

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