Gogebic, Ontonagon and Houghton counties in Michigan's Upper Peninsula (U.P.) have been designated as one of 11 state renaissance zones to spur economic development.
With unemployment ranging from about 6.5 percent in the Houghton area to nearly 16 percent in Ontonagon County, all three counties were looking for an economic shot in the arm when they decided to cooperate with the tax giveback program.
Businesses that locate in the zone will have most state and local taxes waived for up to 15 years. Any Michigan or out-of-state company is eligible to locate in a renaissance zone; however, local guidelines will require companies to have the consent of their current government jurisdiction before they are allowed to relocate.
In addition, the three-county North Country Renaissance Zone committee is in the process of establishing some guidelines on minimum pay scales and employment numbers for any new company moving into the zone. "Although we don't want to be so restrictive that we'll turn away companies that really could grow," says Phil Musser, executive director of the Keweenaw Industrial Council in Houghton.
Musser believes that much of the resulting job creation will come from local companies that use the zone for business expansion. "I don't believe the tax breaks are significant enough that companies will pick up and move to the U.P.," Musser says. It's more likely that companies may establish a research and development facility or a branch plant, he adds.
The counties are focusing their marketing efforts largely on groups with some connection to the U.P., such as:
- alumni of Gogebic and Suomi colleges and Michigan Technological University. Each institution's alumni newsletter will carry a story about the renaissance zone program. Musser adds that Michigan Tech is also a selling point with its faculty and research facilities available to businesses. "How many rural areas have a major technological university in their back yard?" Musser asks.
- suppliers and customers of existing local companies.
- foreign businesses that may want to get a toehold in the U.S. market. For example, the president of Suomi College will tout the program to business people on a trip to Finland.
- people who vacation in the U.P. Musser cites the call received from the owner of a Georgia company, familiar with the area, expressing interest in establishing a branch in the area.
Two sites have been set aside in each of the three counties; five sites
are for industrial use and one in Ontonagon County is designated for
residential development. While the counties are not targeting specific
types of businesses, the region's wood and mineral resources may play
a role in just who might be interested in locating in the zone, Musser