Development Bustling

August 18, 2006
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Although possibly more an indication of the nation's economy than that of West Michigan, local development groups are reporting a surge of interest in the region.

The senior West Michigan development agency, The Right Place Inc. in Grand Rapids, saw as many leads by June this year as it had in the entirety of 2005.

"You really have a national economy that is doing quite well," said Right Place President Birgit Klohs. "We in Michigan are down about ourselves, but there are still many companies that need to address customers in the Midwest. Michigan is still very much on the map; it's not for every company, but we are still a powerful economic state."

If a company is looking to distribute in the Midwest or the eastern seaboard, it will take at least a cursory look at Michigan, Klohs said. With its pro-business climate and solid work force, West Michigan stands out against other regions of the state.

Also, it helps that the region has a large inventory of available modern facilities. Practically all of the prospects Klohs has seen are looking for existing facilities, as opposed to undeveloped sites. This speaks to the character of prospects available in the development market, with relatively few possibilities for region-altering projects such as an OEM plant.

These leads come from two primary sources. Most of the national-caliber prospects contact the Michigan Economic Development Corp. and are filtered through to local agencies. A smaller percentage of out-of-area prospects are generated through an agency's own marketing programs, in which the 22-year-old Grand Rapids group is a national leader among its peers.

Klohs estimates that she does not learn the identity of roughly 90 percent of these leads. Large firms generally work through a site acquisition consultant, who will form a short list of possible sites for the client to consider. For a large portion of leads, Klohs said, there is no contact past the initial interest. For those that do give West Michigan a closer look, the process becomes what Klohs called "a delicate dance" that can take years of effort to place a local site as a finalist.

"It's a very delicate situation how you manage that lead," she said. "It only even becomes a prospect once you actually get them to come and visit the community. … Obviously, the more activity you have in lead generation, the more chances you have to show somebody the community."

Randy Thelen, president of two-year-old Holland economic development agency Lakeshore Advantage, believes that many of the same prospects looking at the greater Grand Rapids area have also stopped by Holland. Compared to his experience with similar, older agencies in other regions, Lakeshore Advantage has seen a significant surge in lead generation. He reported a particular spike in the past 90 days.

"We haven't seen any major ones pull the trigger, so I don't know if we have an increase in buyers yet," Thelen said. "But there is certainly an interest in inquiries."

Most of the leads Thelen has seen are Midwest-based companies investigating whether to establish a West Michigan presence. These run the gamut of industries, including several manufacturing firms and a number of technology interests. In the conversations he has had, firms have been as interested in the region's readily available labor force as in its vacant buildings.

"That's what's really driving the market," he said. "They see an inventory of buildings and talent and want to check us out."

Not all of the leads are coming from outside of the region, Klohs noted. In the other, less glamorous, side of economic development, interest from local companies to expand or relocate is also strong. At The Right Place, retention leads have kept pace with attraction leads, Klohs said, also matching last year's total in June.    

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