Muskegon Could Be A National Lure

June 17, 2002
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MUSKEGON — Siemens Corp.’s decision to become involved in the SmartZone envisioned along Muskegon’s waterfront significantly broadens the high-tech business park’s appeal to potential tenants well beyond West Michigan.

Instead of looking for tenants from just around the general region, backers of the Muskegon Lakefront SmartZone say they expect potential prospects to arise from at least around the Midwest, and possibly from across the nation and internationally. Elevating the business park’s appeal is the opportunity to partner with Siemens in the research of emerging fuel-cell technologies to produce electricity for residential and commercial buildings.

“It will put Muskegon as a place where people will want to locate,” said Chris Kelly, a partner in the Muskegon law firm Parmenter-O’Toole whose partners are undertaking the development.

Siemens has agreed to partner with Grand Valley State University to develop a fuel-cell research center as well as build a fuel-cell generating plant that will provide electricity to the business park, which will focus on the research, development and commercialization of energy-related technologies and products. Siemens’ local investment could reach $34 million.

The involvement of the New York City-based Siemens Corp. — which has more than 80,000 employees in the U.S. and recorded 2001 revenues of $19.1 billion as the American arm of German-based Siemens AG — will ultimately give the Muskegon Lakefront SmartZone a “more national sense” that may help to lure other large corporations to Muskegon, said John Mundell III of CB Richard Ellis/Grand Rapids.

“I think it’s just the tip of the iceberg,” said Mundell, vice president and office adviser for CB Richard Ellis/Grand Rapids, which is marketing the project to prospective developers and tenants. “There’s going to be other world-class companies coming.”

Working under the corporate structure of Lakefront Development LLC, the partners in Parmenter O’Toole envision turning the 34-acre former Teledyne property, located along Muskegon Lake and adjacent to downtown, into a mixed-use development consisting of professional office buildings, 140 condominium units, retail stores and a marina. Lakefront Development is marketing individual parcels to developers.

With Siemens’ new partnership with Grand Valley State University, Mundell expects to see potential developers begin coming forward for varying aspects of the development.

“You’re going to see the developers start pulling the trigger,” he said. “It was such a far-reaching project at one point. Now it’s the reality.”

The ambitious project, which began in 1998 as an effort by Parmenter-O’Toole simply to build a new office building for itself and evolved into a public-private initiative that’s seen as a vital component to Muskegon’s continued revitalization, received a SmartZone designation in April 2001 from the Michigan Economic Development Corp.

The status enables the city of Muskegon to provide tax-increment financing and makes developers eligible for state tax credits, both of which are designed to lure and support high-tech business development. The city also has established the parcel as a brownfield site, which qualifies developers for additional tax credits.

Lakefront Development will build the first office building within the business park to house Parmenter-O’Toole’s law offices and has donated two acres to Grand Valley State University for the research center, which also will house a business incubator for energy-related start-up companies, and Siemens’ fuel-cell plant. The business park has 14 individual parcels available ranging from two to 10 acres in size.

Interest in the project is strong and Kelly expects to have signed contracts for 10 of the parcels by early fall from firms now based in western Michigan. He believes out-of-town companies will show an interest in the business park once construction is well along in a year or so.

“We’ve got to live up to the announcement,” Kelly said.

But even then, landing more major corporations the size and stature of Siemens won’t come easily, Kelly said. Trying to sell a large corporation on the SmartZone means dealing with a large corporate structure and working your way up the chain, he said.

“Whenever you go to the higher level to attract tenants or companies, the bigger they are, the more red tape there is, the more contracts you have to go through,” he said. “You’re no longer going to have a local guy making a decision.”           

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