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1000 ‎Rochester Hills Dr‎

Rochester Hills‎, ‎MI ‎

48309‎

(‎248‎) ‎656‎-‎4600‎

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www‎.‎rochesterhills‎.‎org‎

Rochester Hills

Minutes

Local Development Finance Authority

Brandy Boyd‎, ‎Clarence Brantley‎, ‎Michael Damone‎, ‎Michael Ellis‎, ‎Lois Golden‎, ‎Lori Hartnell‎, ‎

Darlene Janulis‎, ‎Michael Kaszubski‎, ‎Daniel Romzek‎, ‎Stephan Slavik‎

7:30 AM

Conference Room 221

Thursday, April 25, 2013

CALL TO ORDER

Chairperson Stephan Slavik called the Special Meeting to order at ‎7‎: ‎28 ‎

a‎.‎m‎. ‎in Conference Room ‎221‎.‎

ROLL CALL

Michael Kaszubski‎, ‎Michael Damone‎, ‎Michael Ellis‎, ‎Stephan Slavik‎, ‎

Darlene Janulis and Brandy Boyd‎

Present

6 -

Clarence Brantley, Lois Golden, Lori Hartnell and Daniel Romzek

Absent

4 -

Quorum present‎

Also present‎: ‎Ed Anzek‎, ‎Director of Planning and Economic Development‎

Pamela Valentik‎, ‎Manager of Economic Development‎

Kurt Dawson‎, ‎Director of Assessing‎/‎Treasury‎

Keith Sawdon‎, ‎Director of Fiscal‎

Maureen Gentry‎, ‎Recording Secretary‎

APPROVAL OF MINUTES

2013-0138

November ‎15‎, ‎2012 ‎Special Meeting‎

A motion was made by Ellis‎, ‎seconded by Boyd‎, ‎that this matter be Approved as ‎

Presented‎. ‎The motion carried by the following vote‎:‎

Aye

Kaszubski, Damone, Ellis, Slavik, Janulis and Boyd

6 -

Absent

Brantley, Golden, Hartnell and Romzek

4 -

COMMUNICATIONS

There were no Communications brought forward‎.‎

NEW BUSINESS

2013-0123

Request for Election of Officers ‎- ‎Chairperson‎, ‎Vice Chairperson‎, ‎Secretary and ‎

Treasurer for a one‎-‎year term to expire the first meeting in April ‎2014‎

Upon motion by Ellis‎, ‎seconded by Janulis‎, ‎Stephan Slavik was ‎

unanimously re‎-‎elected as Chairman for a one‎-‎year term to expire the first ‎

meeting in April ‎2014‎.‎

Upon motion by Slavik‎, ‎seconded by Janulis‎, ‎Mike Ellis was unanimously ‎

re‎-‎elected as Vice Chairperson for a one‎-‎year term to expire the first ‎

meeting in April ‎2014‎.‎

Upon motion by Ellis‎, ‎seconded by Boyd‎, ‎Maureen Gentry was unanimously ‎

elected as Secretary for a one‎-‎year term to expire the first meeting in April ‎

2014‎.‎

Upon motion by Janulis‎, ‎seconded by Ellis‎, ‎Kurt Dawson was unanimously ‎

re‎-‎elected as Treasurer for a one‎-‎year term to expire the first meeting in ‎

April ‎2014‎.‎

Approved

2013-0139

Presentation on Redevelopment Resources identified by Strategic ‎

Communication Solutions ‎- ‎John Kerr‎, ‎SCS‎

Ms‎. ‎Valentik stated that she and Mr‎. ‎Anzek were pleased to bring Mr‎. ‎Kerr ‎

before the LDFA Board‎. ‎She noted that in the past year‎, ‎the City had ‎

contracted with Strategic Communication Solutions ‎(‎SCS‎) ‎to represent ‎

the City on a number of levels‎. ‎They would be looking at what resources ‎

were available to help businesses within the LDFA and what programs ‎

were out there for development of the LDFA area in correlation with the ‎

City’s Development Plan‎. ‎She turned the discussion over to Mr‎. ‎Kerr‎.‎

Mr‎. ‎Kerr advised that SCS provided services to the City on a variety of ‎

levels‎, ‎including government relations‎. ‎He hoped that they would see ‎

from his skill set that he brought a different element to the table‎, ‎and that ‎

he could be an active and resourceful support system to the LDFA team‎. ‎

He gave some background for SCS‎, ‎and noted that they were a ‎

multi‎-‎client lobbying firm that had been around since ‎2002‎. ‎They worked ‎

with many local units‎, ‎but they also worked with other non‎-‎profits and ‎

private‎-‎sector companies‎. ‎Traditionally‎, ‎they helped communities build ‎

relationships in Lansing and Washington‎, ‎D‎.‎C‎. ‎navigating different ‎

departments and finding resources available to accomplish their goals‎. ‎

They provided direct government relations and legislative tracking and ‎

research‎. ‎They attended all City Council meetings in Rochester Hills ‎

and his colleague Bill Bullard‎, ‎a former local County Commissioner and ‎

former State Senator‎, ‎had been their eyes and ears in Lansing‎. ‎They ‎

provided monthly reports to the City on pieces of legislation that could ‎

positively or negatively impact the community‎. ‎

Mr‎. ‎Kerr added that SCS also had a public relations communications ‎

strategy component to what they did‎. ‎If it was a program that the City was ‎

attempting to implement or an initiative that required some ‎

communication with constituents and the citizens‎, ‎they also assisted the ‎

City in providing messaging‎. ‎A new aspect of the firm was finding Federal ‎

and State grants and mixing that with government affairs‎. ‎His ‎

background was in economic development‎. ‎He related that resources ‎

had dwindled at the State level‎, ‎and he found that it was very important ‎

not only to have the ability to identify where the resources were and to be ‎

able to leverage an incentive‎, ‎but they had to know the congressional ‎

delegation and legislators to understand how to best access things‎. ‎He ‎

found that mixing government affairs and economic development had ‎

been quite productive from where he came‎, ‎and he hoped to bring that to ‎

Rochester Hills‎. ‎He mentioned that Robert Law was the principal of the ‎

company‎. ‎He was a former State Legislator and Chief of Staff for ‎

Governor Milliken‎. ‎Mr‎. ‎Kerr also worked with Dan Pero‎, ‎Governor ‎

Engler’s former Chief of Staff‎. ‎Rhonda Cook was the former Director of ‎

Government Affairs for MDOT‎, ‎and combined‎, ‎they brought a lot to the ‎

table in all aspects of government‎. ‎He was an urban and regional ‎

planner by trade‎, ‎and he graduated from Michigan State‎. ‎He spent the ‎

last ‎13 ‎years working for the Detroit Wayne County Port Authority as the ‎

Director of Economic Development‎. ‎During his time there‎, ‎he developed ‎

some of their first programs‎. ‎Their Brownfield programs were quite active‎, ‎

and they provided remediation opportunities for non‎-‎profits and the ‎

private sector to leverage new developments‎. ‎He was the fiduciary agent ‎

for the Port Security Grant Program‎, ‎and he also had experience working ‎

with the Federal Highway Department of Commerce‎. ‎He spent a lot of ‎

time studying the Federal “alphabet soup” and figuring out ways to bring ‎

resources back to Detroit and Wayne County to help develop the ‎

waterfront and preserve the Authority‎.‎

Mr‎. ‎Kerr advised that the biggest project he worked on at the Authority was ‎

a ‎$‎22 ‎million public dock and terminal trade building next to the ‎

Renaissance Center‎. ‎He claimed that it was not easy‎. ‎His Director at the ‎

time said that there was ‎$‎7‎.‎5 ‎million to build it‎, ‎and that basically bought ‎

about ‎85 ‎steel piles‎. ‎They pieced together additional sources of funds‎, ‎

predominately all discretionary grants‎. ‎It was important for them to write a ‎

good grant and also to work closely with their congressional delegations‎. ‎

Senator Levin was a big supporter of the riverfront redevelopment efforts‎, ‎

and they forged a close relationship with him‎. ‎Mr‎. ‎Kerr said that ‎

hopefully‎, ‎the relationships with Federal departments were things he ‎

could continue to bring to Rochester Hills‎. ‎

Mr‎. ‎Kerr noted that he also helped negotiate the Port Authority’s first bond ‎

deal‎. ‎The Port Authority‎, ‎like the LDFA‎, ‎had the ability to issue revenue ‎

bonds‎. ‎They financed a project for General Motors‎. ‎It was a creative‎, ‎out ‎

of the box‎-‎type of effort that was not a traditional Port project‎. ‎He was not ‎

suggesting that the LDFA should get into the same types of businesses‎, ‎

but he thought it was an interesting project‎, ‎and he wanted to share it ‎

because he learned a lot‎. ‎He was also the Government Affairs Director ‎

for the Port Authority‎. ‎He was before the Detroit City Council a lot ‎

providing budget updates‎. ‎The Board was constructed with an appointee ‎

by the Mayor‎, ‎two appointees by the Wayne County Commission‎, ‎and the ‎

Governor also appointed a member‎. ‎MDOT provided funding‎. ‎He stated ‎

that he had a lot of experience working with local units of government‎. ‎

Mr‎. ‎Kerr advised that Port Authorities had been used as conduit issuers ‎

throughout the regional United States‎. ‎While he was there‎, ‎General ‎

Motors was interested in bringing some of its employees downtown‎. ‎

There was a ‎1‎,‎200‎-‎space parking facility on the waterfront today‎. ‎General ‎

Motors maintained ownership of the property‎, ‎and they entered into a ‎

ground lease‎, ‎financed the improvements‎, ‎and leased it back to GM‎. ‎By ‎

using the Port Authority‎, ‎they were able to finance ‎100‎% ‎of the ‎

transaction‎, ‎rather than GM having to put equity into the deal‎. ‎Because of ‎

the way they structured it with a ground lease and operating lease above‎, ‎

they were able to capture depreciation and use that as equity‎, ‎and GM ‎

maintained long‎-‎term control of the asset‎. ‎It was probably a project that ‎

could have been done on its own‎, ‎but they were able to assist GM and ‎

save them money in the process‎. ‎He said that in a sense‎, ‎that was what ‎

LDFAs did in terms of lending abilities to the private sector to help them ‎

accomplish what they needed within the boundaries of the district‎.‎

Mr‎. ‎Kerr related that in August of ‎2012‎, ‎which was before his time‎, ‎the City ‎

spelled out what they wanted SCS to accomplish for them‎. ‎They were to ‎

support Ms‎. ‎Valentik and Mr‎. ‎Anzek in economic development and ‎

business attraction‎. ‎They were asked to use efforts to enhance the ‎

Museum‎. ‎He commented that parks and recreation was a big reason ‎

residents were so thrilled with Rochester Hills‎. ‎SCS would continue to ‎

help enhance that area‎. ‎They were to assist police and fire‎, ‎identify ‎

government efficiencies‎; ‎sustain types of alternative energy projects‎; ‎and ‎

work on site clean‎-‎up and opportunities for habitat restoration‎. ‎In the last ‎

three months‎, ‎they had assisted the City with its trust fund grant‎, ‎which ‎

was collaboration with other communities‎, ‎and they would continue to ‎

assist the City in working with other cities‎. ‎There was a grant announced a ‎

few weeks ago that the City won ‎$‎51‎,‎000‎.‎00 ‎because DPS would start ‎

working with the Road Commission‎. ‎Mr‎. ‎Kerr added that SCS was ‎

starting to develop some support strategy for the LDFA to help further its ‎

goals‎. ‎

Mr‎. ‎Kerr gave some background on how LDFAs established what they ‎

did‎. ‎In ‎1986‎, ‎LDFAs started to allow the use of Tax Increment Financing ‎

to fund public infrastructure improvements‎. ‎The purpose was to promote ‎

economic growth and job creation‎. ‎Within an LDFA‎, ‎a project had to be a ‎

public facility for eligible property‎. ‎Eligible property could mean land ‎

improvements‎, ‎building structures‎, ‎machinery and equipment and ‎

furniture and fixtures‎, ‎as long as it went to support one of the four primary ‎

purposes of the LDFA‎. ‎Those were to support manufacturing of ‎

processing of goods and materials‎; ‎agricultural processes‎; ‎hi‎-‎tech activity ‎

for research and product development ‎(‎engineering‎, ‎lab testing‎, ‎

development of technology‎)‎; ‎and transit‎-‎oriented development‎. ‎LDFAs ‎

had about five main financing options‎: ‎Using tax increment revenues ‎

from eligible properties to contribute towards investment‎; ‎accepting ‎

contributions from local units of government‎; ‎receiving revenues from ‎

ownership of property‎; ‎issuing revenue bonds‎; ‎and getting loans from the ‎

Michigan Strategic Fund or the MEDC ‎(‎Michigan Economic ‎

Development Corporation‎). ‎

Mr‎. ‎Kerr talked in more detail about the abilities of the LDFA‎. ‎He stated ‎

that the LDFA could study and analyze underemployment and growth ‎

opportunities‎, ‎and he referred to the M‎-‎59 ‎Corridor Plan prepared by ‎

McKenna Associates‎. ‎The LDFA could plan and propose construction‎, ‎

renovation and repair of public facilities‎; ‎develop long range plans‎; ‎

implement any plan of development‎, ‎consistent with the Act‎; ‎make and ‎

enter into contracts separate from the City of Rochester Hills‎; ‎acquire‎, ‎

own‎, ‎lease‎, ‎demolish or rehab real or personal property to achieve the ‎

purpose of the Act‎; ‎improve land‎; ‎prepare sites for buildings‎, ‎including ‎

demolishing‎, ‎constructing‎, ‎rehabbing‎, ‎equipping and improving‎; ‎maintain ‎

or operate a building for the use of a public or private person or ‎

corporation‎; ‎charge and collect fees or rent for the use of a building or ‎

property under the Board’s control and pledge those fees or rent for the ‎

repayment of revenue bonds that might be issued‎; ‎lease a building or ‎

property that was under the Board’s control‎; ‎accept grants and donations ‎

from public or private sources‎; ‎acquire and construct public facilities ‎- ‎

roads‎, ‎water‎, ‎sewer‎, ‎etc‎.‎; ‎incur soft costs in connection with those powers ‎

(‎architects‎, ‎engineers‎, ‎legal fees‎)‎; ‎and plan and implement barrier‎-‎free ‎

improvements to the public facilities that were financed and constructed‎. ‎

He commented that the LDFA had a wide range of powers and ‎

capabilities‎. ‎

Mr‎. ‎Kerr referred to the next few slides‎, ‎and said that the reason he put ‎

them together was that he wanted the Board to see what Oakland County ‎

offered as far as financing and grants‎, ‎noting that the environment had ‎

changed a little regarding that‎. ‎The County and State were really focused ‎

on economic gardening and early stage development ‎- ‎venture capital ‎

and entrepreneurial efforts could be seen through some of the offerings‎. ‎

SBA ‎504 ‎and ‎708 ‎loans had been around for a number of years‎, ‎and they ‎

could compliment investment within the LDFA for manufacturing ‎

purposes‎. ‎He believed that bonds up to ‎$‎20 ‎million could be issued for ‎

a wider variety of uses other than manufacturing‎. ‎Those were ways they ‎

could lure and leverage investment within the boundaries of the LDFA‎. ‎

They were things the LDFA could offer companies seeking to locate within ‎

the LDFA‎. ‎Microloans and SBIR grants were for high tech‎, ‎early stage ‎

companies to encourage growth‎. ‎They saw that in INCubators a lot‎. ‎

There were grant programs‎, ‎consistent with the MEDC that were very ‎

much focused on job training and job retention efforts‎. ‎There was a ‎

heavy emphasis at the State level‎, ‎and if a company was looking to ‎

relocate from out of state‎, ‎they would come into play‎. ‎If a company was ‎

looking to expand‎, ‎it was harder to find grant programs from the MEDC to ‎

offset that‎. ‎They were also focused on downtowns‎, ‎city centers and ‎

commercial corridors‎. ‎

Mr‎. ‎Kerr mentioned the slide he had prepared from the MEDC website‎. ‎

There were eight or nine programs focused on angel investors‎, ‎venture ‎

capital and early stage growth‎. ‎He pointed out some of the more ‎

traditional financing programs that would be attractive for companies ‎

looking to invest within the LDFA‎, ‎such as the Community Development ‎

Block Grants‎. ‎He felt that it was important for the members to ‎

understand the “lay of the land‎.‎” A lot of their clients were asking for ‎

grants so they could get companies to locate‎, ‎and it was important to see ‎

that the focus from the State level had trickled down to the County to help ‎

find new companies for tomorrow ‎- ‎small business‎, ‎early stage and ‎

entrepreneurial growth‎. ‎There was a real focus by the MEDC to attract ‎

new business growth and early stage growth‎. ‎The MEDC had divided its ‎

offerings into three opportunities‎: ‎equity‎, ‎debt markets and grant ‎

programs‎. ‎There were also programs being offered for foreign investment ‎

coming into the LDFA district‎. ‎There was a lot of investment for Chinese ‎

companies coming into the State‎, ‎and it was a creative way to provide ‎

visas for investors looking to come to the United States‎. ‎

Mr‎. ‎Kerr noted the Federal financing opportunities‎, ‎which were not grants‎. ‎

He mentioned the opportunities for recreational enhancement‎, ‎and said ‎

that there was quite a bit of opportunity for habitat restoration‎. ‎That was ‎

good for Rochester Hills‎, ‎but a little more of a challenge for the LDFA‎, ‎

because it was not necessarily what its charge was‎. ‎He highlighted a ‎

Federal program called the Foreign Trade Zone Program‎, ‎which was a ‎

program administered by the Port Authority‎. ‎The Foreign Trade Zone was ‎

put in place for a lot of LDFAs‎, ‎with warehouse opportunities and ‎

manufacturing facilities‎. ‎It was created to level the playing field with the ‎

auto companies back in the day‎. ‎It was an opportunity for people to ‎

import multiple components to manufacture a single product and be ‎

taxed once‎. ‎It eliminated duties on the different pieces brought in‎. ‎The ‎

auto companies found that helpful back before NAFTA‎, ‎because they ‎

could bring in products and not have to pay a tax on every single ‎

component‎. ‎When NAFTA came into play‎, ‎and things were happening ‎

between Mexico and Canada‎, ‎it became less of an opportunity‎, ‎but there ‎

was now a lot of Chinese investment within the U‎.‎S‎.‎, ‎including Michigan‎, ‎

and that program had become more popular for companies coming into ‎

the States that still had business relationships overseas‎. ‎He indicated ‎

that a Foreign Trade Zone was something to consider to lure investment ‎

into the LDFA‎. ‎He suggested that they could set up Suburban Softball as ‎

a Foreign Trade Zone and use it as a marketing tool‎. ‎

Mr‎. ‎Kerr brought up the challenges for LDFAs‎. ‎When times were good ‎

and the economy was booming‎, ‎taxes were collected‎, ‎and they could set ‎

themselves up for a lot of investment opportunity‎. ‎When the economy ‎

was slow‎, ‎it made things very challenging‎. ‎It would be even more ‎

challenging with the elimination of the Personal Property Tax ‎(‎PPT‎). ‎He ‎

said that SCS made its clients aware of legislative efforts and if possible‎, ‎

lobbied on behalf of a city to advocate or not‎. ‎The climate in Michigan ‎

was to eliminate taxes to lure investment‎. ‎Michigan had the seventh ‎

most competitive tax structure in the country‎. ‎It was good on one hand‎, ‎

and it was appealing to companies and corporations‎, ‎but for LDFAs‎, ‎

DDAs and others‎, ‎it was more difficult‎, ‎because it was one less tax ‎

capture‎. ‎It was one less opportunity for LDFAs to raise money‎. ‎He ‎

mentioned the Detroit Zoo issue‎, ‎where entities were not paying their ‎

share of that tax capture‎. ‎The truth was that legally‎, ‎they probably had a ‎

case‎. ‎It was not the intent of the voters for that to happen‎, ‎and legislation ‎

was coming from Lansing to clarify the issue‎. ‎It would open Pandora’s ‎

Box as far as how LDFAs were spending money‎. ‎One community was ‎

suing its DDA because they were getting tax capture but services were ‎

being cut‎. ‎He advised that a representative in Lansing‎, ‎Jeff Farrington‎, ‎

was interested in doing complete economic development reform‎. ‎In Mr‎. ‎

Kerr’s opinion‎, ‎the whole Detroit Zoo issue was going to open a big ‎

conversation about how local units of government were funded and how ‎

LDFAs and TIFs really operated within communities‎, ‎and it could have ‎

future impact‎. ‎He advised that SCS would come back down the road and ‎

provide updates so the City was familiar with what was happening in ‎

Lansing‎. ‎

Mr‎. ‎Kerr concluded his presentation by asking the LDFA members what ‎

they envisioned as its role‎, ‎and how his company could offer support‎. ‎

They provided broader support to Mr‎. ‎Anzek and Ms‎. ‎Valentik by looking ‎

for resources to leverage within the district‎, ‎and they were also trying to ‎

offer opportunities to make site locators ‎- ‎consultants who assisted the ‎

private sector in finding locations ‎- ‎aware of the opportunities in ‎

Rochester Hills‎. ‎They were trying to think outside the box with limited ‎

resources‎. ‎He hoped the presentation was informative and it would be ‎

one of several he would give down the road as Lansing or economic ‎

development updates came up‎. ‎He stated that he looked forward to ‎

working with everyone in the future‎.‎

Ms‎. ‎Valentik advised that Mr‎. ‎Kerr had been very helpful working with her ‎

and Mr‎. ‎Anzek in the last month‎. ‎They had conversations about ‎

strategizing and how they could market properties in Rochester Hills‎, ‎

such as the City’s property on Hamlin or the Suburban Softball site‎. ‎Mr‎. ‎

Kerr had also been helpful in trying to come up with options of how they ‎

would offer financing for the Hamlin Rd‎. ‎property‎. ‎As they were starting to ‎

get more calls and interest‎, ‎the question always came up about what the ‎

price was‎. ‎They tried to turn the conversation more towards what project it ‎

was that someone planned to bring to the property‎, ‎the long term plans ‎

and the jobs created‎. ‎

Mr‎. ‎Anzek recapped that with the decline of the economy‎, ‎the City had not ‎

generated any revenue for the SmartZone‎. ‎They put some away several ‎

years ago but had to hold it until tax appeals were done‎. ‎There was a ‎

question from companies about the value of their properties‎. ‎The City ‎

made a partial payment to Oakland University last year from those funds‎. ‎

They also put the University on notice that it was highly unlikely that they ‎

would see any new revenue captured for the SmartZone‎. ‎

Mr‎. ‎Anzek mentioned discussing creative financing and the possibility of ‎

the LDFA matching a grant‎. ‎He said that they might have to call a special ‎

meeting if that opportunity arose‎. ‎He noted that the LDFA partially ‎

funded SCS’s efforts‎, ‎and that he and Ms‎. ‎Valentik wanted the Board to ‎

hear from SCS directly‎. ‎

Mr‎. ‎Damone asked Ms‎. ‎Valentik who the City’s biggest competitors were‎. ‎

Ms‎. ‎Valentik responded that it depended upon which industry‎, ‎and that ‎

where a company was from could be important‎. ‎She mentioned that so ‎

far this year‎, ‎she had been on two business development trips‎. ‎She went ‎

to Automate in Chicago‎, ‎which was a trade show specifically targeted ‎

towards robotics and automation‎. ‎It was one of the biggest shows in North ‎

America‎. ‎Staff targeted that show because of FANUC Robotics and ‎

Motoman in Rochester Hills‎. ‎There were other OEMs in the area‎. ‎She ‎

felt that the competition within that supply chain tended to be a little more ‎

in the Midwest‎. ‎She noted that she also went to Germany at the end of ‎

February for a business development trip‎. ‎While she was there‎, ‎she met ‎

with two of the City’s companies that also had locations in Germany ‎- ‎

Hommel Etamic and BOS Automotive‎. ‎Because of what was going on in ‎

Europe right now‎, ‎they were looking to bring some of their German ‎

operations to North America‎. ‎The City’s competition with both of those ‎

projects was down south‎, ‎because they did so much work with the ‎

European OEMs and many of them had facilities down south‎. ‎They ‎

would set up operations here if they needed to be close to the Big ‎3‎, ‎but in ‎

relation to North America‎, ‎they were starting to look more at the southern ‎

United States more than Michigan‎. ‎The City was also competing with ‎

Mexico on some levels‎. ‎Companies wanted to bring manufacturing back ‎

to North America‎, ‎and they were competing with Mexico‎. ‎She stated that ‎

the City was in a good position to complete with Mexico‎, ‎although five ‎

years ago‎, ‎that was not the case‎. ‎The Governor had done a lot to level ‎

the playing field and to lower the overall cost of doing business in ‎

Michigan‎. ‎The State’s tax structure made it competitive‎. ‎Companies that ‎

had set up in Mexico had bad experiences‎, ‎so she felt that the City was in ‎

a good position to attract manufacturing‎, ‎especially from the German ‎

companies‎. ‎They saw the United States as a star for establishing ‎

manufacturing as they watched the European markets‎. ‎Ms‎. ‎Valentik ‎

concluded that if it was automotive‎, ‎the City was competing with southern ‎

states or Mexico‎; ‎if it was other areas‎, ‎they were competing more with the ‎

Midwest‎.‎

Mr‎. ‎Damone said that the programs the City needed to offer had to ‎

compete with the programs of the other locations‎. ‎Ms‎. ‎Valentik agreed‎, ‎

and said they were trying to look at not just the programs that brought ‎

down the cost of doing business‎, ‎but at the other elements that made it ‎

difficult or easier for companies to establish an operation in the City‎. ‎

They talked a lot about work force‎, ‎training‎, ‎quality of life and safety and ‎

security‎. ‎One company that had a plant in Mexico had a shooting and ‎

they lost the Plant Manager‎. ‎They had to get into the softer sells‎, ‎and ‎

work force and training were two big things‎.‎

Mr‎. ‎Anzek said that if a site was in the LDFA‎, ‎the LDFA could offer seed ‎

money‎, ‎such as roadway improvements‎, ‎curb cuts‎, ‎waterline extensions ‎

and things of that nature‎, ‎which helped soften a company’s out of pocket ‎

costs upfront‎. ‎Those were nice incentives‎, ‎because things like building ‎

water mains and roads did not have a return ‎- ‎it was just cash out ‎- ‎and ‎

they were other tools in the toolbox‎.‎

Mr‎. ‎Ellis asked what‎, ‎outside of costs when they were competing with ‎

South Carolina‎, ‎for example‎, ‎other elements they were competing against ‎

that were difficult‎. ‎Ms‎. ‎Valentik advised that utilities could become an ‎

issue‎, ‎as well as speed of approvals‎. ‎It was something they really did not ‎

know until they were in the midst of a project‎. ‎Access to workforce and the ‎

quality of the workforce was important‎. ‎Michigan tended to win a little ‎

more by having higher skilled workers‎. ‎It had a strong concentration of ‎

engineers‎. ‎Even though some people thought they had left the State‎, ‎

Michigan still had the highest concentration of engineers‎. ‎Ms‎. ‎Valentik ‎

noted that she had gone on a retention visit recently with one of the City’s ‎

staffing companies that specialized in engineers‎, ‎and found that usually a ‎

new grad coming out of engineering school would make about ‎

$‎10‎,‎000‎.‎00 ‎more in Michigan than in the rest of the country‎. ‎They were ‎

still struggling to fill all of the engineering positions‎, ‎and that message ‎

was getting a little louder‎. ‎The City had always sold itself on its workforce ‎

when competing with down south‎, ‎but the pool of talent was getting ‎

smaller‎. ‎The State was trying to do things to attract people back to ‎

Michigan‎, ‎but they were very aggressive down south‎. ‎She said that she ‎

had a retention visit with a company in one of the City’s technology parks‎. ‎

They shared that a couple of weeks ago‎, ‎they had someone from North ‎

Carolina walking through the park‎, ‎knocking on doors to try to meet with ‎

the Presidents to talk about moving their operations to North Carolina‎. ‎

Ms‎. ‎Janulis asked Ms‎. ‎Valentik if she felt that the way the LDFA was ‎

structured if it gave her enough latitude to bring businesses back‎, ‎or ‎

whether she felt the LDFA should change directions in some manner‎.‎

Mr‎. ‎Anzek stated that the LDFA board had been great and very supportive ‎

of business‎. ‎Ms‎. ‎Janulis wondered if‎, ‎with the SmartZone and how they ‎

were structured‎, ‎whether they were strong enough or if Staff saw ‎

opportunities where the LDFA should be looking at expanding in order to ‎

bring in more business‎.‎

Mr‎. ‎Anzek thought that instead of doing things one way‎, ‎if the LDFA would ‎

give a match for a grant‎, ‎for example‎, ‎it might be a winning scenario to ‎

land a company they were pursuing‎. ‎Ms‎. ‎Janulis clarified that Staff was ‎

open‎-‎minded about bringing the members together if they saw a ‎

worthwhile project coming to the City and the LDFA could accommodate‎. ‎

Mr‎. ‎Anzek agreed‎, ‎and said that Mr‎. ‎Kerr could identify a grant‎, ‎bring it to ‎

Staff‎, ‎and Staff would bring it to the LDFA for a possible match‎. ‎SCS ‎

would work with elected officials and write the appropriate letters in support ‎

of a grant‎. ‎It was a different way of operating for the LDFA‎. ‎Ms‎. ‎Janulis ‎

thought it was most expeditious when there were some different ‎

opportunities‎. ‎Even three years ago‎, ‎they would not have thought of ‎

some of the things that were being developed‎. ‎She asked if she could ‎

get a copy of Mr‎. ‎Kerr’s presentation‎. ‎She felt that the members should ‎

familiarize themselves with the items presented‎, ‎so if opportunities came‎, ‎

they would be prepared‎. ‎They would be more familiar with some of the ‎

grants so if they had to come together‎, ‎they would feel more comfortable ‎

supporting something‎.‎

Mr‎. ‎Anzek said that if there were changes coming from Lansing‎, ‎they ‎

would forward that information to the Board‎. ‎The City used tax ‎

abatements‎, ‎but they had to find other financing programs to help make it ‎

attractive‎. ‎Ms‎. ‎Janulis thought that the Foreign Trade Zone was ‎

interesting‎. ‎

Mr‎. ‎Damone noted that Rochester Hills was not situated by water or a ‎

port‎, ‎and he asked how the City could initiate a Foreign Trade Zone if it ‎

did not have the same geographical concentration‎. ‎Mr‎. ‎Kerr explained ‎

that a City would gain a license by having a port of entry‎. ‎There were also ‎

secured warehouses that were Foreign Trade Zones‎. ‎It required a ‎

different level of security‎, ‎and it varied depending on the product being ‎

secured‎. ‎In Detroit‎, ‎there was an aluminum and steel coil that was ‎

maintained within fenced areas‎. ‎Although most of the Foreign Trades ‎

Zones were developed around water‎, ‎and Miami had a large one‎, ‎there ‎

was opportunity for a secured warehouse‎. ‎Mr‎. ‎Damone said that he saw ‎

the one in Miami‎, ‎and he indicated that it was incredible‎. ‎Mr‎. ‎Kerr agreed ‎

there were some very large ones‎. ‎

Mr‎. ‎Kerr said that Mr‎. ‎Anzek and Ms‎. ‎Valentik had asked him to see if ‎

there were LDFAs in other parts of the area doing really creative things‎. ‎

He said that Ms‎. ‎Janulis had wondered if they should perhaps be looking ‎

at things differently‎. ‎He had spoken to a friend ‎(‎and attorney‎) ‎at Miller ‎

Canfield who provided counsel for LDFAs‎. ‎His friend agreed that they ‎

had been challenged because of the lack of tax capture‎. ‎Mr‎. ‎Kerr stated ‎

that the SmartZone was a way to be creative‎, ‎but there was less revenue ‎

because of the economy‎. ‎He thought that to be creative within the ‎

boundaries of the LDFA‎, ‎they would be combining and layering different ‎

tax incentives and programs‎. ‎They talked about utilizing the Economic ‎

Development Corporation in more creative ways‎. ‎He thought that they ‎

could partner with other City components to enhance things within the ‎

LDFA district‎. ‎He stated that it would be very interesting in Lansing over ‎

the next several years‎, ‎and that it would be very important for him to ‎

provide information back to the LDFA‎.‎

Ms‎. ‎Janulis observed that the Governor had been going to a number of ‎

meetings at townships and cities and with the Michigan Municipal ‎

League‎. ‎He was suggesting certain tax changes‎, ‎and people had been ‎

asking where the Personal Property Tax ‎(‎PPT‎) ‎revenue would come from‎. ‎

He had been talking about that for about two years‎. ‎

Mr‎. ‎Kerr said that as far as economic development‎, ‎they saw the ‎

elimination of a lot of programs‎, ‎such as the Brownfield Tax Credit ‎

program‎. ‎That was the Governor’s philosophy‎. ‎They were seeing the ‎

impacts now of the lack of revenue sharing‎. ‎He agreed that a lot of cities ‎

were wondering what they were gong to do without the PPT‎.‎

Ms‎. ‎Janulis indicated that she did not feel the Governor had as much ‎

clout as he used to have‎. ‎There were supposedly secret meetings ‎

regarding education and three days later‎, ‎the State Superintendent of ‎

Education Mike Flanagan and Governor Snyder talked‎, ‎and Flanagan ‎

was now taking it over‎. ‎She remarked that it did pay to lobby‎. ‎

Chairperson Slavik asked if Staff had received any information about the ‎

engineering testing on the old Softball City site‎.‎

Mr‎. ‎Anzek advised that there really had not been any testing on Softball ‎

City‎. ‎Mr‎. ‎Slavik thought they had built mounds‎. ‎Mr‎. ‎Anzek clarified that ‎

they built mounds to measure the settlement there to try to figure out ‎

whether they could build on pilings‎. ‎There was a metal pipe that ran up ‎

the middle of the dirt mounds‎, ‎and they could measure the sediment over ‎

time‎, ‎which would give them an estimate of how often they would have to ‎

repave parking lots‎. ‎They stopped testing for methane gas and ‎

everything was put on hold when the economy went down‎. ‎They were ‎

working with Mr‎. ‎Kerr and SCS to try to find a way to bring all the parties ‎

together‎, ‎from the County to Oakland University to Beaumont to make an ‎

organized‎, ‎concerted effort to get a big dollar amount to do a massive ‎

cleanup‎. ‎It could be ‎$‎50 ‎million‎. ‎That would be to remove and refill ‎

everything‎, ‎and they still had to put in venting systems‎. ‎Mr‎. ‎Anzek stated ‎

that the grants were getting harder and harder to get‎, ‎and until they got a ‎

committed organization‎, ‎such as Beaumont‎, ‎to do a Medical Main Street ‎

or something‎, ‎they would have to wait‎. ‎Ms‎. ‎Valentik and he were ‎

marketing the northeast corner of Hamlin and Adams‎, ‎which also had a ‎

landfill on part of it‎. ‎It was close to Oakland University‎. ‎OU’s medical ‎

school would be bringing in ‎600 ‎doctors and instructors‎, ‎and they would ‎

be setting up practices and looking for medical office space‎. ‎They hoped ‎

to put medical office on that site instead of half retail as spelled out in the ‎

consent judgment‎. ‎

Ms‎. ‎Valentik reminded that there was a push for shovel ready sites‎, ‎and a ‎

lot of times when the projects came in‎, ‎they needed to know which ‎

properties were more ready to go‎. ‎If there was some attention on one ‎

corner‎, ‎it could spur more attention on the other ‎(‎former Softball City site‎).‎

Discussed

ANY OTHER BUSINESS

Ms‎. ‎Janulis asked if there were any projects being done in the M‎-‎59 ‎

corridor‎.‎

Mr‎. ‎Anzek said that they had started talking to people about putting in ‎

sidewalks‎, ‎trees and landscaping in the industrial parks‎. ‎The City was ‎

putting in a pathway to link the neighborhood south of Rochester Hills ‎

Executive Park to the Trail‎. ‎They were not getting a lot of rousing support ‎

for the sidewalks‎, ‎and he suggested that they needed to have a joint ‎

meeting with the park associations‎. ‎He also suggested that perhaps they ‎

should take pictures of all the employees walking down the middle of the ‎

streets‎. ‎Ms‎. ‎Janulis offered that “if they built it‎, ‎they would come‎.‎” Mr‎. ‎

Anzek said that people would react differently if there was a high‎-‎end ‎

industrial park with sidewalks and nice trees‎. ‎The good news was that the ‎

vacancy rate was about ‎7‎%‎, ‎but the supply was limited‎. ‎He maintained ‎

that the Avon Industrial strip was ripe for redevelopment‎. ‎The buildings ‎

were obsolete‎, ‎and they had been talking with investors about taking ‎

buildings down and putting in something nice with great M‎-‎59 ‎exposure‎. ‎

He added that it might require some LDFA seed money‎. ‎

Ms‎. ‎Valentik recalled that last year‎, ‎the LDFA approved money to expand ‎

Staff’s marketing and travel activities to be more proactive and reach out ‎

to prospects‎. ‎When Staff updated its economic development strategy‎, ‎

three key areas were identified‎. ‎One was supply chain development‎, ‎and ‎

looking at major companies in the area that formed a large supply chain ‎

to see if there were any gaps that might create opportunities to attract ‎

companies‎. ‎The second was international business attraction‎, ‎and ‎

looking at how many foreign companies came to town without Staff being ‎

proactive‎. ‎They needed to determine what else they could do to be more ‎

aggressive to go after some of those companies looking to expand in the ‎

North American market‎. ‎The third was Medical Main Street‎. ‎Oakland ‎

County had launched that initiative a few years ago‎, ‎and it was getting ‎

traction on a global level‎. ‎Staff was trying to be supportive of Oakland ‎

County’s efforts to market the region for health services and life science ‎

activities‎. ‎With Oakland University’s William Beaumont School of ‎

Medicine‎, ‎they felt that Rochester Hills was positioned to be a major hub ‎

or intersection in the Main Street‎. ‎

Ms‎. ‎Valentik mentioned attending the Automate Show in Chicago‎, ‎and ‎

said that a lot of it was driven by the larger companies in the area that put ‎

Rochester Hills on the map within their industry‎, ‎and Fanuc Robotics was ‎

one of them‎. ‎There were other robotic firms or suppliers in the area‎. ‎

There was ABB and Kuka within ‎40 ‎miles and Motoman‎, ‎which had its ‎

sales and training operations for North America in Rochester Hills‎. ‎They ‎

wanted to start marketing robotics and automation‎, ‎because there were ‎

OEM’s that were close to their customers‎. ‎In the last two years‎, ‎five ‎

companies had moved to town‎, ‎specifically to get closer to Fanuc or ‎

Motoman‎. ‎

Ms‎. ‎Valentik advised that there were about ‎30‎,‎000 ‎people attending the ‎

show‎, ‎and FANUC was a major player and a market leader in robots‎. ‎

Even a lot of the suppliers had FANUC robots within their displays‎. ‎A ‎

majority of the automation and robotics work was still in the automotive ‎

field ‎- ‎about ‎65‎% - ‎but they were starting to see more growth in the food‎, ‎

beverage and packaging industry‎. ‎There was also more growth in the ‎

medical field‎, ‎such as pharmaceuticals‎, ‎medical research and medical ‎

services‎. ‎Never once in talking with people at the show did she have to ‎

explain where Rochester Hills‎, ‎Michigan was‎. ‎As soon as she mentioned ‎

it was home to FANUC Robotics and Motoman‎, ‎they knew exactly where it ‎

was‎. ‎That told her that it was really an industry that they needed to start ‎

doing a lot more with and get more proactive to know some of the ‎

suppliers‎. ‎They needed to start working closely with FANUC to see if ‎

there were companies that they would like to see come to town‎. ‎It was not ‎

just FANUC‎; ‎it was Kuka Robotics and ABB Robotics‎. ‎Even though they ‎

did not have locations in Rochester Hills‎, ‎Pari Robotics in Rochester ‎

Hills supplied to them‎. ‎

Mr‎. ‎Ellis asked how aggressive Staff could get competing against other ‎

states and whether the City could get really aggressive‎. ‎Ms‎. ‎Valentik said ‎

that they were trying to realize‎, ‎with the resources available‎, ‎how ‎

aggressive they could get‎. ‎Staff was getting a feel for the area and the ‎

industry‎, ‎and they were starting to determine if there were opportunities ‎

and what the City’s competitive advantages were‎. ‎Regarding getting ‎

aggressive‎, ‎her ideal situation would be that FANUC would work with the ‎

City to give a joint message to try and bring suppliers to the Rochester ‎

Hills area‎. ‎One of her next steps was to strengthen the relationship with ‎

FANUC‎, ‎and to see if they could get together and talk about how to ‎

strategize on marketing the area within their supply chain‎. ‎She thought it ‎

was very important for a company to tell its supplier that they wanted them ‎

closer‎. ‎That would carry more weight than her going to an integrator or to ‎

a supplier saying they should open an office to be closer to so and so‎.‎

Mr‎. ‎Damone said that the Ms‎. ‎Valentik segued into the fact that the City ‎

could not ignore who was already here‎. ‎They could be competing with ‎

South Carolina‎, ‎but the company that was here could not be ignored‎. ‎If ‎

someone was here and not happy‎, ‎that was worse than trying to bring in ‎

someone new‎. ‎He suggested that they could not overlook the base that ‎

was already here‎, ‎and they needed to ask how they could get that base to ‎

grow‎. ‎

Mr‎. ‎Anzek said that Mr‎. ‎Damone was right on target‎. ‎Mr‎. ‎Anzek advised ‎

that Ms‎. ‎Valentik make ‎199 ‎retention visits in ‎2012‎. ‎It was critical to learn ‎

what the businesses were thinking‎, ‎or whether they were thinking of ‎

expanding and whether they had enough space‎.‎

Mr‎. ‎Damone said that it was exciting to bring someone in and he was not ‎

suggesting that they did not do that‎; ‎he was stating that they should not ‎

ignore the people that were here‎.‎

Mr‎. ‎Kaszubski said that one of the challenges he saw coming from a ‎

venture capital side was that on the acquisition‎, ‎a lot of times the portfolio ‎

that bought the business was not located within the City‎. ‎He asked if the ‎

City had any type of mechanism that was integrated into the portfiolio ‎

from a retention or an attraction standpoint‎. ‎In all his years‎, ‎he had hardly ‎

ever talked with anyone from the cities when they were doing acquisitions‎. ‎

It was not on anyone’s list‎, ‎so it might be an area to focus on‎, ‎because ‎

they might be able to do an end around that way‎.‎

Ms‎. ‎Valentik said that from her years in economic development‎, ‎she felt ‎

that the medical or life sciences industries tended to be more poised for ‎

acquisition because of their technology far more than the tool and die ‎

shops or manufacturing companies‎. ‎She referred to Oxus America as a ‎

prime example‎. ‎They were a medical device company that was building ‎

from the ground up‎. ‎They had a unique product‎, ‎and she felt that they ‎

had to be on someone’s radar screen from an acquisition standpoint‎. ‎

They had to figure out what they could do to keep Oxus in Rochester Hills ‎

when it might make sense for them to look at acquisition or licensing‎. ‎

The new owner might just think of them as a small part of a larger ‎

organization‎. ‎She had conversations with Oakland County within the ‎

Medical Main Street program about what the City could do to attract some ‎

of those companies that tended to acquire other companies in contrast to ‎

the new technologies‎. ‎She recently learned that a few years ago in ‎

Michigan‎, ‎there were only two venture capital firms‎. ‎They now had about ‎

30‎. ‎She hoped that put Michigan in a better position and that those ‎

decision makers for equity funding would keep what they purchased in ‎

Michigan‎. ‎She added that perhaps they would attract companies from out ‎

of State and encourage them to come to Michigan‎.‎

Ms‎. ‎Valentik mentioned her Germany trip‎, ‎and said that she was invited ‎

by one of Oakland County’s Business Development reps‎. ‎They attended ‎

the largest medical device and medical technology show in Europe‎. ‎She ‎

spent a week in Germany‎, ‎and while there‎, ‎she visited with two companies ‎

that already had locations in Rochester Hills‎. ‎If a company was going to ‎

be doing any investment in North America‎, ‎they wanted to encourage ‎

them to do some of that in Rochester Hills‎. ‎She spoke with a couple of ‎

prospects and met with other strategic partners that worked with German ‎

companies looking to get into the U‎.‎S‎. ‎market‎. ‎They also attended the ‎

Med Tech Europe show‎. ‎She felt that it was a very productive week‎. ‎They ‎

came back with some leads that the County was working on‎, ‎and she ‎

hoped to see something come of that‎.‎

While she was in Chicago‎, ‎Ms‎. ‎Valentik noted that she was able to set up ‎

a meeting with the German American Chamber of Commerce‎. ‎The ‎

German Chamber had three locations within the United States ‎- ‎Chicago‎, ‎

Atlanta and New York‎. ‎They acted as a point center for German ‎

companies looking to enter the U‎.‎S‎. ‎Market‎. ‎She got an opportunity to ‎

join the German Chamber and talk with the Director‎, ‎and she shared ‎

information about Rochester Hills‎.‎

Mr‎. ‎Anzek advised that there were ‎13 ‎German‎-‎owned companies in ‎

Rochester Hills‎, ‎and they were trying to build on that momentum‎. ‎Ms‎. ‎

Valentik mentioned that one of the German companies was targeting the ‎

Hamlin Rd‎. ‎property‎. ‎

Ms‎. ‎Valentik brought up new companies that had come to town‎. ‎There ‎

was Innovative Media‎/‎IM Branding‎, ‎which had taken over the former Dura ‎

building‎, ‎which was about ‎68‎,‎000 ‎s‎.‎f‎. ‎They were responsible for the ‎

wrapping on the Chrysler Headquarters building‎. ‎They also did large ‎

scale graphics‎, ‎vehicle wraps‎, ‎building wraps and they had another ‎

division of the company that manufactured and fabricated furniture‎, ‎

specifically for auto dealerships‎. ‎One of the partners was Roger Penske‎, ‎

and they were consolidating operations across the metro Detroit area‎. ‎

They were bringing about ‎60 ‎employees and planned to hire another ‎25 ‎

in the first year‎. ‎

Ms‎. ‎Valentik mentioned WEC Group on Northfield‎. ‎They had only been ‎

in town a year‎, ‎and they had already leased a second location on Hamlin ‎

Rd‎. ‎They had nine employees when they came into town and were up to ‎

39 ‎and anticipated having ‎60 ‎employees by the end of the year‎. ‎Ms‎. ‎

Valentik advised that MPI International was returning to town‎. ‎They were ‎

moving into their old building on Austin Ave‎. ‎Another new company was ‎

Poltrona Frau‎, ‎an Italian company‎. ‎In Italy‎, ‎its niche was furniture and ‎

seating‎, ‎and they had secured a contract with Chrysler to do seating for ‎

the ‎300‎. ‎They had to very quickly set up operations in Michigan‎. ‎They ‎

ended up acquiring the assets of one of the City’s companies on Product ‎

Dr‎.‎, ‎and they were retaining all the employees from there‎. ‎Staff was ‎

seeing more and more Italian companies looking to come to the area ‎

because of Fiat’s management and work with Chrysler‎. ‎Ms‎. ‎Valentik ‎

noted that the County had already been to Italy‎, ‎and they were planning ‎

another trip there‎. ‎

NEXT MEETING DATE

Chairperson Slavik reminded the Board that the next LDFA meeting was ‎

scheduled for July ‎11‎, ‎2013‎.‎

ADJOURNMENT

Hearing no further business to come before the LDFA Board and upon ‎

motion by Janulis‎, ‎Chairperson Slavik adjourned the Special Meeting at ‎

8‎:‎51 ‎a‎.‎m‎.‎

Respectfully Submitted‎,‎

_____________________________‎

Stephan Slavik‎, ‎Chairperson‎

Rochester Hills ‎

Local Development Finance Authority‎

_____________________________‎

Maureen Gentry‎, ‎Recording Secretary‎