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SmartZone
may bring businesses north into Keweenaw
HOUGHTON ’Äì
A
recent announcement by the Michigan Economic Development
Corporation indicates the Michigan Tech EnterPrise
SmartZone (MTEPS) for establishing and helping
technology-based businesses will soon become a
reality for Hancock and Houghton. However, the
SmartZone may extend north to Calumet, Lake Linden
and Keweenaw County, according to spokespersons for
the Keweenaw Industrial Council (KIC), which was
instrumental in the effort to bring a SmartZone to
the Keweenaw Peninsula.
A partnership between the
cities of Hancock and Houghton and Michigan
Technological University, the SmartZone aims to
stimulate the growth of
technology-based businesses and jobs in the area.
The Michigan legislation creating SmartZones will
allow the two cities to form a local development
financing authority (LDFA) to capture school taxes
that now go to the state for up to 15 years. These
will be used for purchasing property, for
establishing business incubators and other buildings
and for funding management and marketing. There will
be no increase in local taxes, nor will schools lose
revenues. These captured taxes are intended to be
the primary financing mechanism for the SmartZones
and can only be used for SmartZone-related
activities.
The Upper Peninsula Power
Company and Wisconsin Public Service have jointly
committed $15,000 and are considering future
commitments. In addition to Michigan Technological
University, other organizations are currently
developing plans that will formalize their
relationships with the SmartZone to provide either
in-kind or financial support or both.
One of the aims of the
SmartZone is to create more than 1,600 jobs over
the next 15 years, including 550 science and
engineering jobs, and to generate $230 million of
local retail spending and $14 million of new local
tax revenues.
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Phil Musser, far right, executive
director of the Keweenaw Industrial Council and member of the
Common Ground Initiative for sustainable development, spoke
at a meeting of Keweenaw County township land use planning
committee members earlier this year in the Eagle Harbor Town
Hall. Also pictured, from left, are Christa Walck, Common
Ground Core Group chair; Bill Luokkanen, Allouez Township supervisor; Jim Heikkila,
Keweenaw County Road Commission engineer; Doug Sherk, Eagle Harbor
Land Use Planning Steering Committee co-chair; and (hidden behind
Sherk) Common Ground member Jim Boyce. (Keweenaw
Today file photo)
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KIC Executive Director Phil
Musser, who has
participated in the Common
Ground Initiative
for sustainable development in both Houghton
and Keweenaw counties, said the SmartZone has the
potential to expand to the north end of the Keweenaw
Peninsula.
’ÄúThis is probably the most
important economic development initiative this area
has had in terms of its potential economic
impact,’Äù Musser said Wednesday, April 11, after
the MEDC announcement. ’ÄúIt will diversify and
strengthen the economy; it will create high-paying
jobs here that will result in additional monies
being spent for local goods and services; and it
will increase our tax base.’Äù
Musser said the whole point of
the SmartZone is to spin off technologies from
Michigan Tech and to attract technology companies to
the area. He noted the Keweenaw
Industrial Council, which has already
supported new businesses in the area, has had the
experience of seeing businesses spread out through
the two-county area.
’ÄúIt would be reasonable to
assume that there would be additional technology
companies that will want to locate in Keweenaw
County,’Äù Musser said.
He noted the SmartZone will
attract entrepreneurs wanting a non-urban, excellent
quality of life; excellent access to Michigan
Tech’Äôs technical resources and Finlandia
University’Äôs design resources; and one-stop access
to financial, marketing and other resources.
In addition to his
participation in Common Ground, Musser has been
active in assisting the Keweenaw County township
land use planning committees and said he hopes to
speak at a future joint meeting of these planning
groups.
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Tim Lyons, Keweenaw Industrial
Council board member and director of Lake Linden's
Entrepreneurial Center, spoke at the Common Ground
Workshop in Houghton last December. The Center provides
office space and high-speed Internet service for technology-based
businesses. (Keweenaw
Today file photo)
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Tim Lyons, KIC board member and director of the
Entrepreneurial Center in Lake Linden, said his
Center has no official SmartZone status but is
successful in helping businesses grow. The
Entrepreneurial Center is located in a former school
building reconverted into large, attractive offices
and offering high-speed Internet connections. As a
business incubator, the Center has a purpose similar
to that of the SmartZone. A technology-driven
business has hurdles to overcome, Lyons said. They
have to prove their technology works, and they have
to learn how to run a business.
’ÄúThis (SmartZone) could be an
economic boon to the entire area, second only to the
copper mining days of 100 years ago,’Äù said Lyons,
who organized the first Calumet
Heritage Celebration last summer. ’ÄúIt
is my personal goal to try to get more things
happening on the north end ’Äì
to get the Keweenaw Industrial Council more actively
working with the northern communities.’Äù
The
KIC, one of the
SmartZone sponsors, includes several member
businesses from the area north of Hancock, including
some in Keweenaw County, Lyons noted.
’ÄúTheir
heart (KIC’Äôs) really is in the right place to
encourage economic growth from technology businesses
in the whole regional area, both Houghton and
Keweenaw counties,’Äù he added.
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Keweenaw County
Board Chairman Frank
Stubenrauch
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Keweenaw
County Board of Commissioners Chairman Frank
Stubenrauch said he thought the SmartZone would
probably center around Houghton and Hancock near
Michigan Tech and Finlandia University, but with
computer technology it could be anywhere reasonably
close to those centers.
’ÄúWe’Äôd welcome anything like that (in Keweenaw
County),’Äù Stubenrauch said. ’ÄúIt would be an
addition to the tourist industry ’ĶThey would be
non-polluting and highly paid enterprises. I don’Äôt
think many people would object to that.’Äù
The Michigan Tech EnterPrise
SmartZone (MTEPS) will focus on increasing
the number of engineering and technology jobs in the
area, commercializing
research developed at Michigan Tech, and retaining
science and engineering
graduates from the university.
"This further cements
Michigan Tech's role as an economic development
force in the state," said Michigan Tech
president Curt Tompkins.
The SmartZone encompasses the
entire cities of Hancock and Houghton. Any
non-residential site within those boundaries can
become eligible for SmartZone involvement. The
partnership plans to establish incubators for new
companies as well as existing companies who want to
open high tech branch offices in the area.
Two of the SmartZone
participating companies are already in place: DCT,
with a staff of 27 engineers in the Republic Bank
building; and MSX International, with an engineering
group in the UPPCO building. Both companies hire
Michigan Tech graduates and take advantage of their proximity
to the university.
MTEPS has an ambitious agenda
over the next 15 years. Among its goals are to
create 550 science and engineering jobs and 1,100
support jobs, develop or renovate five buildings and
add at least 20 new high-tech companies. Partnership
officials say they will use Michigan Tech's
strengths to attract new companies in
such sectors as automotive design, high-tech
manufacturing, wood products,
biotechnology and information technology.
According to Pete Radecki,
executive director of corporate services at Michigan
Tech, the Ford Motor Company Fund plans to make a
major financial commitment to house the university's
"engineering enterprise" program. The
program involves student teams working with
companies to solve real-world
problems. This building would also house a business
incubator.
Following the submission of the
SmartZone application in Fall, 2000, a SmartZone
Launch Committee was formed to lay the groundwork
for SmartZone establishment. The Launch Committee
includes representatives of the Cities of Hancock
and Houghton, Michigan Tech and the Keweenaw
Industrial Council. The Committee will continue to
function only until the LDFA and MTEPS are
established and operational.
George Butvilas, vice-chairman
of Republic Bank Corporation and chair of the Launch
Committee, is optimistic about the SmartZone’Äôs
future.
"I am very pleased that we
have been able to bring together the cities, the
university and many business leaders in support of
this program," Butvilas said.
"This will have a substantial,
long-term, beneficial impact on the Copper
Country."
The MTEPS will have at least a
nine-person Board of Directiors, including one
representative each from the Cities of Hancock and
Houghton, two from Michigan Technological
University, one from the Keweenaw Industrial
Council, one from the Michigan Economic Development
Corporation (MEDC), the MTEPS Executive Director and
two Board members with national business reputations
and expertise in commercializing technologies and
financing technology companies.
Over the next few months the Cities of Hancock and
Houghton will develop and approve a comprehensive
LDFA (local development financing authority) plan,
establish the LDFA ’Äì
to be formed as a 501(c ) (3) non-profit
corporation ’Äì and begin to capture the taxes that will
provide some of the funding for SmartZone
implementation. The Michigan Tech Board of Control
must now approve the university's ongoing
involvement with the SmartZone, including its
membership on the MTEPS Board of Directors. The
Keweenaw Industrial Council Board of Directors will,
similarly, need to approve its ongoing involvement
in MTEPS and its commitment to providing business
services to MTEPS clients. Once approvals and final
agreement on MTEPS and LDFA working relationships
have been established, MTEPS will complete its Board
of Directors appointment and proceed to advertise
for and hire staff.
Click
here to comment on this article ’Ķ
’Äì
Michele Anderson
April
12, 2001
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