Economic Development, Government, and Lakeshore

Holland awaits SmartZone decision

June 12, 2015
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Holland is one step closer to creating a new satellite SmartZone.

A new bill recently approved by the Michigan House of Representatives that amends the number of communities able to apply for satellite SmartZone designation has been referred to the Senate Committee on Economic Development and International Investment.

House Bill No. 4226 seeks to amend the 1986 Local Development Financing Act to allow the designation of six additional SmartZones through a competitive application process conducted by the Michigan Economic Development Corp.

If passed by the Senate and signed into law by Gov. Rick Snyder, the bill would amend the Local Development Financing Act and a subsequent section introduced in 2008 under Public Act 104 to allow for an increase from three to nine designated satellite SmartZones throughout the state.

The six additional geographical areas would rely on a formal partnership with an existing SmartZone, or certified technology park, to stimulate economic development, entrepreneurism, and talent retention and recruitment.

The bill was introduced in February by Daniela Garcia, R-Holland, and sponsored by a bipartisan group of legislators including Amanda Price, Roger Victory, Kurt Heise, Michael McCready, Bradford Jacobsen, Harvey Santana, Henry Yanez, Sam Singh, Andy Schor, Winnie Brinks and Brandon Dillon.

Garcia said the additional satellite technology parks will allow communities to submit an application for SmartZone satellite status and provide another boost to the local economy.

“SmartZones demonstrate how collaborative relationships can have a positive impact on a community. Utilizing these proven local economic development models across the state will yield more successes and increased private sector investment,” said Garcia in a press release. “I’m thrilled my hometown of Holland will have the ability to apply for a SmartZone satellite designation through the enactment of my legislation.”

Holland’s SmartZone Financing Authority Board met last fall to elect officials and approve a formal partnership with the existing Grand Rapids SmartZone to support the growth of technology-related businesses and the overall entrepreneurial ecosystem in the region.

The process to implement a satellite designation in the lakeshore community is stalled, however, unless the legislation moves forward, since HB 4226 will allow Holland to capture state education taxes, according to Jennifer Owens, president of Lakeshore Advantage.

Under the 2008 amendment of the 1986 Act, the state treasurer was able to approve up to three satellite SmartZones with an agreement with an existing SmartZone to capture state education tax and intermediate school operating tax increments, according to the House Fiscal Agency’s May 4 legislative analysis.

“This legislation allows our community to be able to capture state education taxes, which is a very important element for the SmartZone to be successful, so without the legislation there will be no SmartZone in Holland,” said Owens.

The Senate committee considered the legislation and heard testimony late last week.

As the organization serving as executive director of the satellite SmartZone in Holland, Owens said she would be testifying on behalf of the bill at the meeting.

“Our organization will be contracted by Holland Township and the city of Holland to implement the SmartZone program,” said Owens. “We think it is very important for our organization to testify about the economic impact of this bill and why it is so important to formalize our partnership with the city of Grand Rapids and also extend this resource to our community.”

The Grand Rapids SmartZone was approved in 2002 by MEDC and the certified technology park includes collaboration between the city of Grand Rapids, The Right Place, Van Andel Institute, Grand Valley State University and Grand Rapids Community College. It is one of 15 designated SmartZones throughout the state and provides incubator services to support growth, including business development mentoring, entrepreneurial training, market analysis, management recruitment and product development.

Owens said the bill is written enabling the MEDC to conduct a competitive bid process and approve up to three satellite SmartZones in two rounds. The new bill, as passed by the House, indicated the initial application period would begin on the effective date of the amendment with a deadline of Oct. 1 and approved no later than Nov. 1. The second application period would begin Jan. 1, 2016, and end July 1, 2016.

Based on tax values over a period of roughly 15 years, Owens said if the value continued to increase, the organization conservatively estimates the community would be able to bring in approximately $6.3 million in the region to support entrepreneurial endeavors, infrastructure and a community allowing startups to grow.

“Looking at the roughly 1,000 acres we have put into the zone, we feel it is very prime for new development and, based on that increase in taxes, we will be able to capture a portion and put it back into helping set up companies to grow and succeed,” said Owens.

Holland’s satellite SmartZone would sit on approximately 1,000 acres in the city and Holland Township along Lake Macatawa, which includes the Michigan State University Bioeconomy Institute, 242 Howard Ave.

The MSU Bioeconomy Institute would serve a similar role to that of Grand Rapids’ Medical Mile, which anchors the Grand Rapids SmartZone, according to Garcia.

“With the expansion of SmartZone satellites, MSU’s 35,000 square feet of space can be used as an incubator for entrepreneurial efforts,” said Garcia. “Local partnerships and collaborations have been critically important in making Ottawa County economically strong, and a SmartZone satellite will help to continue the great process that has already been achieved.”

Owens said the entrepreneurial ecosystem is located throughout the West Michigan region, and the designation of a satellite SmartZone will bring resources to Holland and Holland Township.

“It also allows us to learn from the existing programs and support what has been there in the city of Grand Rapids, and it really formalizes the partnership. It will allow us to work regularly together to make sure our regional entrepreneurial ecosystem is strong,” said Owens. “That has made us very excited about the future for partnership and collaboration as a result of this program.”

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