How Detroit/Michigan lost an opportunity to land a manufacturer

[maverick1]

I wonder how often this has happened in the past?

http://www.crainsdetroit.com/article...-home-products

[animatedmartian]

Detroit is too used to locally-grown businesses that are conditioned to how things are done around here. People from out of town have a different mindset. Chicago, being a big international powerhouse that it is, has to have coordination across the board or else they know they could lose opportunities that would cost the city. It makes no sense to take several years for a company to come in and go through miles of red tape before ever reaching construction.

[Detroitnerd]

I think there's something deeper here. MEDC, DRC and other local business boosters don't understand or value urban areas or repurposing old buildings. Here's an entirely plausible scenario: When these guys came to MEDC and said they'd like to reuse an empty manufacturing plant in the city, MEDC probably laughed their asses off, paid lip service to their desires while dragging their feet on them, and started recommending suburban sites instead. And the company, rightly insulted, went somewhere else.

[animatedmartian]

I think there's something deeper here. MEDC, DRC and other local business boosters don't understand or value urban areas or repurposing old buildings. Here's an entirely plausible scenario: When these guys came to MEDC and said they'd like to reuse an empty manufacturing plant in the city, MEDC probably laughed their asses off, paid lip service to their desires while dragging their feet on them, and started recommending suburban sites instead. And the company, rightly insulted, went somewhere else.

I'm not sure where you get that idea when there's many old industrial buildings that are vacant that have yet to be touched and probably wouldn't cost too much to rehabilitate outside of the more older plants.

[Vic01]

I wonder how often this has happened in the past?

http://www.crainsdetroit.com/article...-home-products

Good article, here are a few highlights...

Method Home Products could have made Detroit — or one of several other Michigan cities — home for a large soap manufacturing plant. It could have built a 200,000-square-foot factory. It could have invested $35 million. It could have created 100 green-manufacturing jobs.
Instead, the spoils went to Chicago.
A year and a half ago, Detroit didn't step up to help the San Francisco-based company through the labyrinth of tax credits, abatements, zoning laws, real estate rules, legal wrangling and everything else it takes to turn an abandoned brownfield site into a successful business, said Adam Lowry and Eric Ryan, the Detroit-area natives who founded Method.
Mike Finney, president and CEO of the Michigan Economic Development Corp., said his organization also dropped the ball by not providing site information or tax incentive information quickly enough — although the MEDC has since improved its business attraction efforts.
Among others in Michigan, the sprawling 2.5 million-square-foot site of American Axle & Manufacturing Holdings Inc.'s Detroit manufacturing complex was a contender for Method's plant, said Greg Hudas, the agent/broker for Southfield-based Signature Associates Inc.,a Cushman & Wakefield alliance member. Hudas evaluated sites throughout the state between November 2012 and February 2013.

Method also considered the former Ford Motor Co. Wixom assembly plant and RACER Trust sites in Flint and Grand Rapids, as well as other sites in Lansing and in southern Michigan near Toledo.
"The mindset was triple-green, LEED Platinum, and they were going to have a windmill for electricity," Hudas said.


Too slow off the mark Hudas said the American Axle site in Detroit would have been "tremendous" for Method, which was founded in 2000 and in 2012 was acquired by European rival Ecover, creating a $200 million company.

"But I never had a chance to sit face to face with the Method guys," Hudas said. "There were no meetings with the American Axle people or the guys who own the Ford Wixom site."
What could have been done differently?
For Lowry, interviewed during the Detroit Regional Chamber's Mackinac Policy Conference last week, choosing Chicago over Detroit came down to vision.
Chicago, he said, knew what type of businesses it wants to grow. Every developer sang from the same hymnbook, knew what types of projects could be expedited. Detroit, meanwhile, was haphazard. It was, at least at that time, economic development by happenstance, not by grand vision.
Chicago won the business with a better pitch and a team in sync.

[Detroitnerd]

I'm not sure where you get that idea when there's many old industrial buildings that are vacant that have yet to be touched and probably wouldn't cost too much to rehabilitate outside of the more older plants.

Could have been American Axle. Instead, rather than pay the taxes on the improvements [[buildings) they demoed them.

[Hermod]

You need to have a mayor who can tell the prospective industry that in navigating the city bureaucracy and any minor clerk or bureaucrat stands in your way, call me and I will have him squashed like a bug.

[Hypestyles]

... will something finally be done with the fisher body plant and its surroundings? Is that included in the blight removal master plan?

[ghettopalmetto]

I think there's something deeper here. MEDC, DRC and other local business boosters don't understand or value urban areas or repurposing old buildings. Here's an entirely plausible scenario: When these guys came to MEDC and said they'd like to reuse an empty manufacturing plant in the city, MEDC probably laughed their asses off, paid lip service to their desires while dragging their feet on them, and started recommending suburban sites instead. And the company, rightly insulted, went somewhere else.

I wouldn't be shocked. From the article:

Lowry and Ryan, whose products are in stores ranging from Whole Foods to CVS, said they had visited Chicago, Detroit and other locales, telling the mayor's office, local brokers and developers they were looking to rehabilitate an existing factory or build new on an abandoned site. They knew what they wanted — to bring jobs and investment into a struggling area.

There are very few people in Detroit who understand modern business models. They're just not prepared to handle this kind of project.

[bailey]

I wouldn't be shocked. From the article:

They knew what they wanted — to bring jobs and investment into a struggling area.

There are very few people in Detroit who understand modern business models. They're just not prepared to handle this kind of project.

So, I'm just curious... how much tax payer assistance/subsidy was needed for them to purchase the AAM building and bring those jobs and investment they apparently wanted to bring?

Hudas said the American Axle site in Detroit would have been "tremendous" for Method, which was founded in 2000 and in 2012 was acquired by European rival Ecover, creating a $200 million company.

"But I never had a chance to sit face to face with the Method guys," Hudas said. "There were no meetings with the American Axle people or the guys who own the Ford Wixom site."

Why does the realtor and the business need the MEDC to set those meetings?

The Method project loss, though, was shock to the representatives of the DEGC and city of Detroit who were sitting in the audience of a Mackinac Policy Conference panel last week."This wouldn't have happened if they'd called us," said Olga Stella, DEGC vice president of business development.
Waymon Gillebeaux, executive vice president of project management for the DEGC, had never heard of the project. Neither had Marcell Todd, who worked in the administration of former Mayor Dave Bing and is now Mayor Mike Duggan's director of city planning.

So, is it the DEGC's fault for not cold calling Method and seeing if they had interest in moving?

[NoHeartAnthony]

So wait, Right to Work for Le$$ wasn't the bargaining chip that brought it here?

[Wesley Mouch]

...So, is it the DEGC's fault for not cold calling Method and seeing if they had interest in moving?

Its very dangerous to make any assumptions about what really happened here. And its dangerous to think you can control each and every one of the 'site location searches' that come along.

Do we really know what happened here? No. Is it possible to know. No. Maybe DEGC blew it. Or maybe Method didn't really want to come here.

Suppose for a second that someone powerful inside Method said they wanted to consider Detroit. But other's had already decided on Chicago. They go through a dance. And issue some comments to cover-ass. DEGC looks bad.

We just don't know.

To get more companies to locate here, you need to make the climate as good as possible. You need a good development corp like DEGC. You need responsive government. Banks who will lend. Land use policies. Strong Chamber of Commerce. Well-trained employees. Good PR for the city. Everything! Everything! Everything!

Even if everything is perfect, you will lose some. You can't worry much these things too much. Just be good.

And to NoHeartAnthony... nobody really things RTWFL is a silver-bullet that fixes everything. Its just one of many building blocks of a decent environment where there's a balance between labor, business, unions, and government.

[Honky Tonk]

Do we really know what happened here? No. Is it possible to know. No. Maybe DEGC blew it. Or maybe Method didn't really want to come here.

Or maybe Method did their research, found it was cheaper to "Do It In Detroit", and used that as a bargaining chip to get the location they really wanted in Chicago

[ghettopalmetto]

Its very dangerous to make any assumptions about what really happened here. And its dangerous to think you can control each and every one of the 'site location searches' that come along.

Do we really know what happened here? No. Is it possible to know. No. Maybe DEGC blew it. Or maybe Method didn't really want to come here.

Suppose for a second that someone powerful inside Method said they wanted to consider Detroit. But other's had already decided on Chicago. They go through a dance. And issue some comments to cover-ass. DEGC looks bad.

We just don't know.

DEGC found out that Method wanted to re-use an existing building, instead of demolish one, so they didn't know what to do!

And to NoHeartAnthony... nobody really things RTWFL is a silver-bullet that fixes everything. Its just one of many building blocks of a decent environment where there's a balance between labor, business, unions, and government.

Bwahahahahaha! But that's for another thread....

[Wesley Mouch]

DEGC found out that Method wanted to re-use an existing building, instead of demolish one, so they didn't know what to do!

You have probably hit it on the head. I don't see that DEGC gets that today's new startups and progressive businesses no longer want to be shown business parks like Corktown South. If they are not playing up Detroit as a hip destination -- but only as empty fields, then they need to be adjusted.

[bailey]

You have probably hit it on the head. I don't see that DEGC gets that today's new startups and progressive businesses no longer want to be shown business parks like Corktown South. If they are not playing up Detroit as a hip destination -- but only as empty fields, then they need to be adjusted.

In mild defense of the DEGC, everyone [[them and Method) seems to be saying they were never contacted or engaged.

[rb336]

Say what you will about Granholm, she was FAR more successful pulling major developments into Michigan

[rjlj]

Companies don't gain any benefit about lying about not being paid any attention to the by the economic development corporations they are trying to do business with. Blame George Jackson for this loss of business in the city of Detroit.

In mild defense of the DEGC, everyone [[them and Method) seems to be saying they were never contacted or engaged.

[Hermod]

Say what you will about Granholm, she was FAR more successful pulling major developments into Michigan

Until the crash. New money has been scarce since then.

[rb336]

Until the crash. New money has been scarce since then.

This wasn't about new money, this is about a big company wanting to set up shop where its owners grew up. this was a big dropped ball.

As far as new money being scarce, other states are drawing investments

[maverick1]

This wasn't about new money, this is about a big company wanting to set up shop where its owners grew up. this was a big dropped ball.

As far as new money being scarce, other states are drawing investments

I've noticed that. Which is odd sense we've had the most business friendly state government in recent history. Why haven't we had initiatives like this from them? http://www.oneregionforward.org/plan...elopment-plan/
https://www.governor.ny.gov/press/03...llion-projects

[nain rouge]

The problem is that it takes more to attract businesses than the government being "business friendly". Antarctica could make itself the most business friendly environment in the history of the world, but it wouldn't change anything. In fact, I'd hazard to guess that many so-called business friendly policies actually make the overall condition of the state worse, which in turn does more to chase away businesses than a small tax break can fix.

Let me put it this way. When Amazon sees a state bending itself over for businesses, it doesn't it move its offices there. It locates a shipping warehouse there, instead.

[bailey]

Companies don't gain any benefit about lying about not being paid any attention to the by the economic development corporations they are trying to do business with. Blame George Jackson for this loss of business in the city of Detroit.

So the DEGC is supposed to be omnipotent? Both sides are saying no one called the DEGC. The DEGC is saying that if someone did call them, they'd have gotten a deal done. The firm that has the AAM listing and the Wixom plant listings says no one called them.

MEDG may have dropped the ball... sure, but it seems that everyone wants to push the blame on the DEGC who weren't involved at any point, apparently.

Besides, if Method REALLY wanted to be here, and felt in anyway strongly about it, they couldn't have made any other call? Hey AAM realtor guy, we're working with the MEDC and we're not getting into what we think might be a good deal with your building/facilities... what does the MEDC not know? can we do a deal?

Again, not letting the MEDC off the hook for being less than responsive [[apparently) to home grown talent, but it seems like Detroit/Michigan was a stalking horse here.

[FbO Vorcha]

Companies don't gain any benefit about lying about not being paid any attention to the by the economic development corporations they are trying to do business with. Blame George Jackson for this loss of business in the city of Detroit.

They gain benefits all the time by lying about everything. How many times have you heard a business insist..Hand Over Heart... That they had no plans whatsoever to do something only to have them announce the very next day that they were doing the exact thing they vowed never to do?

I've seen businesses actually begin expansions on sites where they closed the site before the expansion was completed. Their reason was to keep employees from quitting for new jobs before the company was ready to get rid of them on the company's timeline. They even pointed to the expansion as "proof" that they weren't closing the site.

Look what happened to Chrysler, Everyone at Chrysler was told it was a "merger" until it was done. That's when the joke about the Chrysler being silent in Daimler-Chrysler started up. It's common for the employees at the acquired company to be told it's a merger, Happened when United Artists Cable TV bought up United Cable TV in the late '80's as well.

[Honky Tonk]

Companies don't gain any benefit about lying about not being paid any attention to the by the economic development corporations they are trying to do business with.

Are you Ok? I think you just fell off of the turnip truck.