City Approves SmartZone Budgets
The downtown SmartZone runs along North Monroe Avenue and Michigan Street, and is anchored by the Van Andel Research Institute and wet lab incubator space that’s scheduled to open later this year in Grand Valley State University’s Center for Health Professions building.
A satellite zone, the Plymouth Industrial SmartZone, is on Plymouth Road and includes Siemens Dematic. Both zones are separate tax increment financing districts funded by tax increment revenues, in addition to grants from the Michigan Economic Development Corp. (MEDC) for SmartZone program start up.
The Plymouth Industrial zone won’t begin to accrue revenue until 2004, said City Business Advocate Susan Shannon. But the SmartZone’s downtown tax increment financing district will capture nearly $211,000 in taxes this year.
Slightly more than $109,000 of that is budgeted to cover legal fees, matching funds for an MEDC marketing grant, and the SmartZone Authority’s $75,000 share of upgrading the conduit in Michigan Street for a new fiber optic cable link to GVSU’s Health Professions building and other facilities.
The remaining $101,000 generated by the downtown SmartZone district will be carried over to 2004, Shannon said.
“This is a new fund and we want to start building it up, so we don’t want to spend everything we have,” she told commissioners. “As we start to build this fund up we can do some really big projects.”
In 2004, the downtown and Plymouth Road zones are expected to generate $217,100 and $31,521, respectively. Future revenue from the Plymouth Industrial SmartZone will be used to pay back $4.5 million in bonds the SmartZone Authority will issue to pay for relocation of the city’s Water System Administration facility, which is being moved to allow for Siemens Dematic’s expansion.
Shannon said $207,000 of the downtown SmartZone’s 2004 revenues are budgeted for administrative costs, infrastructure improvements, land acquisition and for operation of a Business Accelerator Center, which will offer new high tech companies assistance in business development, access to venture capital, market research, legal services and the transfer of technology to the marketplace.
The MEDC is providing $300,000 in grant monies over three years for business accelerator operations, and GVSU is contributing another $300,000. The SmartZone Authority will contribute $25,000 a year to operations, as well, Shannon said.
She said operation of the business accelerator, estimated at $300,000 a year, will probably be one of the biggest expenditures over the years to come.
“What we found in the research was that high tech companies, a great part of them, are not going to relocate from another city. You have to learn how to grow your own and nurture your own. So the business accelerator is a program the state encouraged us to provide.”The downtown SmartZone’s 2004 budget also sets aside $10,000 for site plan development and $100,000 for possible infrastructure improvement that might be requested by high tech companies locating in the zone.