Friday, October 17, 2008
Development-oriented transit encouraged
Hales has an extensive background in integrating regional transit with the urban environment. He’s known as the godfather of Portland’s highly successful streetcar system, which has spurred millions in new development in the city’s downtown. He spoke with business leaders and transit advocates Thursday afternoon at the University of Michigan & Urban Lank Institute Real Estate Forum.
Public transit serves poor people who need it to get around and it serves some middle class people who use it to avoid the hassle of everyday commuting, Hales said. It’s also the choice of many of the young people who are flocking to the urban living environments, he added. But statistics from the American Association of Retired People show that 71 percent of older Americans, too, want to live within walking distance of a transit system, he pointed out.
“People are seeking better designed communities served by and organized around transit,” Hales said. “We’re seeing an American Renaissance in transit.”
Some cities are building light rail systems. Others are investing in bus rapid transit, which Hales describes as a “great tool” for connecting a community. A bus rapid transit system will open in Grand Rapids in the summer of 2012. The BRT line will run along Division from 60th Street north to Wealthy Street, through downtown to Michigan Street and then to Central Station. The corridor runs through Grand Rapids, Wyoming and Kentwood. All in all, the route will be just under 10 miles, with 19 station stops and 10-minute service frequency during peak hours. The route will have a dedicated traffic lane and will use hybrid electric busses that have “secondary signal preemption,” which means traffic lights will automatically adjust to longer green lights and shorter red lights.
Many business leaders believe the route will be a catalyst for new jobs and investment in the corridor and that the 19 station stops will be sweet spots for development. Rapid Central Station will serve as one of the station locations and another station location has been recommended — on Jefferson Avenue on Saint Mary’s Health Care property.
Through the auspices of Grand Valley Metro Council, The Rapids will hold a series of charrettes with the three cities to talk about some of the other potential station locations, noted Peter Varga, CEO of The Rapid transit system. Varga said Thursday he expects the BRT will provide about a 400 percent return on investment at station sites.
The total cost of the BRT line is estimated at slightly more than $40 million, of which the state would need to provide a total capital match of 20 percent, or $8.02 million over a four-year period. Varga said legislators juggled items in the budget around a bit and have now assured a match by the state.
Other cities, like Portland, have built or are building downtown streetcar systems — what Hales refers to as “pedestrian accelerators” and “moving sidewalks.” Grand Rapids is one of the cities considering a streetcar system downtown.
A streetcar system is a local “concentrator,” in terms of bringing people together, it’s a tourist amenity, it’s a transit connector and, perhaps most importantly, it’s a huge catalyst for development, Hales said. Portland, for instance, opened an initial 2.4-mile streetcar line in 2001 for a cost of $56.9 million. Three extensions have since added 1.6 miles to the system. By 2005 more than $2.39 billion in private investment had occurred within a two-block radius of the streetcar route, with construction of 7,248 new housing units and 4.6 million square feet of office, institutional, retail and hotel space. Portland’s return on investment was 1,900 percent, which computes to a 40-to-1 return on investment.
According to Hales a streetcar system breeds greater intensity in an area, sharply increases property values and expands the customer base and customer access to businesses along the route.
“Streetcar creates the kind of environment people want,” Hales commented, adding that a streetcar system makes a city more competitive in its ability to attract knowledge workers and makes it more livable by reducing the city’s carbon footprint.
What does it take to make a streetcar system a reality? Hales said it takes the participation of public partners, including the city, universities and hospitals in the area, as well as the participation of private partners who are willing to invest in it.
The local Public Transportation Tomorrow Taskforce has already selected a 1.6-mile streetcar alignment along Monroe and Market avenues from the Sixth Street Bridge on Newberry Street to Rapid Central Station. The estimated cost for the first segment of a streetcar system, in 2008 dollars, is anywhere from $64 million to $80 million, which includes tracks, purchase of streetcars and any utility issues that might be involved.
Construction of the first segment would be funded under a public/private process. Varga, said he’s not seeking federal funds for the streetcar project because under the federal New Starts program The Rapid cannot compete effectively against city’s that are vying for those funds to build streetcar systems that go long distances. The task force is looking into funding options, he said.
The route selected would provide multiple options for future extensions, Varga said, and the task force is already envisioning the next possible alignment. Future extensions, however, would not include Michigan Street hill because the grade on that stretch of Michigan is too steep, he noted.
Varga said he’d like to see the opening of a streetcar system coincide with the opening of the BRT four years from now.
—Anne Bond Emrich
Thursday, October 16, 2008
Inter-governmental cooperation necessary for survival
The topic was “Regionalism – The Future of Michigan.” The panel was a mix of mayors and professional administrators: Daryl Delabbio, Kent County administrator and controller; Kurt Kimball, city manager of Grand Rapids; Al McGeehan, mayor of Holland; and Steve Warmington, mayor of Muskegon; with moderator Don Stypula of the Grand Valley Metropolitan Council.
A mix of public and private funding is the answer in some situations, they said (Van Andel Arena, DeVos Place, Millenium Park, the renovation of downtown Muskegon), but they also had plenty of thoughts to share about cooperation between the counties, cities, townships and school districts.
“We have evolved” although there is still some parochialism in Kent County, said Delabbio.
With Michigan being a strong home rule state, that is “probably our biggest obstacle.”
Kimball mentioned the possibility of a merger of sorts between Grand Rapids and Kent County. Though he wasn't sure how or if it would work, he said, “we need to build on our record of collaboration and take it to the next level,” said Kimball.
“Michigan is too cautious,” said Kimball, and isn't doing enough to follow up on the challenge from Gov. Jennifer Granholm in her State of the State address a year and a half ago. She said the state had revenue to share with communities that would cooperate with each other and share services to keep costs down.
Delabbio agreed there is a track record of good communication in West Michigan, that encourages cooperation. Even though there are some key issues he and Kimball do not agree on, that does not prevent them from talking to each other, he said.
But it should be the professional government administrators sitting down together to draft the agreements — not the politicians, said Delabbio.
Delabbio also took a poke at the news media, which he said would rather focus on failed collaboration attempts than the “hundreds” of inter-government collaborations in this region that work.
McGeehan agreed, saying the media is more interested in “border wars.”
If Michigan is going to succeed and prosper, “it will occur in our cities and the communities around them,” said McGeehan.
There are still grass roots challenges to cooperation. Between the school systems, a stalemate often boils down to the issue of the high school football teams.
The panel agred that public and private joint ventures are a great strength of West Michigan.
Warmington pointed out that joint public/private ventures have pumped $175 million into downtown Muskegon, which has undergone a radical change in appearance since the failure of the downtown mall in 2002 to the new construction under way there today.
—Pete Daly
Award winners identify emerging trends
Robert Pliska of Sperry Van Ness: Having good relationships with mortgage bankers. “It’s always been that way, but more so now with the way the economy is,” he said.
Aaron Young of The Wisinski Group: Property owners have to be very sensitive to their tenants, as they will be asking for more concessions. Right now, owners aren’t looking three steps ahead and they should be because their loan-to-value ration could drop. “Equity leases were big a few years ago, and these might come back,” he said. Young also said there is additional pressure on brokerage companies because leases are stronger than sales.
Marcel Burgler of Prime Development: Urban universities will be a catalyst for development. “If you look at the sectors that are growing it’s health care, education and, unfortunately, government,” he said.
Colin Kraay of Grubb & Ellis/Paramount Commerce: Doing a thorough due diligence. “We had to use incredibly in-depth market knowledge to get (the Priceline.com) deal done. Due Diligence is going to become more important for brokers as we move forward. From a broker’s standpoint, it’s a return to due diligence and market research,” he said.
Jon Rooks of Parkland Properties: Cooperation with state and local governments will become more important. “There are a lot of tools in the tool box. The state of Michigan is excellent with incentives. Our city government is also excellent,” he said. He also said there would be less new construction, but more renovations of existing buildings. He felt the conversion of apartments into condos was over, but downtowns will thrive because people want to live in those districts and they are willing to downsize their lifestyles to do that.
Randall Allman of CB Richard Ellis: More seller financing and more leasing activities. “We have to be creative and put the two opportunities together to get to the end,” he said.
Duke Suwyn of Grubb & Ellis/Paramount Commerce: Low-skilled, high-paying jobs are gone and so are the large manufacturing plants. Public-private partnerships are vital. Brokers have to be cooperative and do what is best for a community. “We have to get things down to size to meet the market,” he said of large industrial plants.
—David Czurak
Developing a successful city
- A cultural package: Frey said Grand Rapids was strong in this area with DeVos Performance Hall, the new Grand Rapids Art Museum, the Urban Institute for Contemporary Arts, the Gerald R. Ford Presidential Museum and the Van Andel Public Museum Center. He also noted that the city’s arts organizations are nationally known.
- Great health care: Here, again, he said the city is doing well with Spectrum Health, Metro Health, Saint Mary’s Health Care, the Van Andel Research and Education Institute and the Michigan State University College of Human Medicine. While Frey noted that having aspiring medical students in the city was a very good thing, he thought VAI provided the best opportunity for the city’s medical future. “The real untold story is the commercialization of the research being done at the Van Andel Institute,” he said.
- Good education: Frey said the city was doing very well in this area with five universities and colleges located downtown.
- Good entertainment: Also good. Frey said the city offers baseball, arena football, hockey, Millennium Park, an expanding John Ball Zoo and the Meijer Gardens and Sculpture Park, which he said , by the way, was paid for with only private dollars, a $155 million worth. “It is the second-largest tourist attraction in the state of Michigan,” he said of the Frederick Meijer family development.
- Good places to gather: Frey said people need places to socialize, other than in establishments that serve alcohol, but the city is lacking in this area. “We are in the process of creating those, all in the private sector,” he said.
- Urban dwelling units: Frey said downtown needs to become easier to walk in order to draw more people to live in the district. “We are sort of pedestrian friendly, but we’re more car friendly,” he said.
—David Czurak
Lenders seek developer’s ‘commitment’ to project
Jacoby said she doesn’t know of any banks that are providing loans for any type of residential development projects or that are acquiring existing residential projects, including condominiums, single-family homes and second homes.
As for commercial real estate projects, banks are looking ever more carefully at a developer’s commitment to a project, Jacoby said.
“In addition to your cash, banks are looking at your commitment as developers to the project. We look at that in a couple of different ways. One way is the guarantee, which I think you’ll find is increasingly unlimited rather than pro rata or some of the other loosened up guarantees that we saw in 2005 through 2007.”
Secondly lenders should be prepared to ask a developer whether he was around during the last recession and if he was, how did he handle it? Did he ever get property back? Did he ever default on a property? How did he work his way out of his problem?
“We’re looking more carefully at the history of behavior in case it might repeat in the next three years,” Jacoby said. “I think you’ll find that lenders are more careful than ever about that sponsorship question. Is the developer prepared to be personally committed to the project?”
Furthermore, for the next few years developers will probably see more three-year term loan deals than the five-year deals, Jacoby said.
Michigan developers need to understand, too, that many believe Michigan is in a one-state recession: Many lenders — even if they would lend in 49 states — would not lend in Michigan, she said.
“We have been written off the map. It’s like they sawed off the mitten and it’s gone,” Jacoby remarked. “Even when the economy returns, lending will not look like it did in the past 36 months.”
—Anne Bond Emrich
Salvation Army project proceeds
The nonprofit organization’s Major Roger. R. Ross, Kroc Center administrator, provided an update on the project during the roundtable portion of the conference, being held in Grand Rapids for the first time ever. Efforts are underway to establish a ULI satellite in West Michigan. The real estate organization sponsors the conference annually along with U-M Taubman School of Architecture and Urban Planning. Next year’s conference will be in Ann Arbor.
Ross said the Salvation Army hopes to break ground on the $20 million center on Oct. 29. It has raised $11.8 million of its $15 million from 100 donors in a quiet campaign, but needs $12.5 million before construction can begin. “We have a little bit more to raise before we can put a shovel in the ground,” Ross said.
After the center was rebuffed from Garfield Park, the Salvation Army, the city of Grand Rapids and Grand Rapids Public Schools worked together to cobble together the 20-acre site near New Branches School, a charter school, and GRPS’ Brookside Elementary. The deal included the purchase of five private lots from four owners, Ross said.
Planned is a 94,000-square-foot building at 2500 S. Division Ave., plus an outdoor recreational area.
Among the features: indoor and outdoor performing arts and worship areas; a conference center available for meetings, receptions and other functions; a gymnasium; and indoor water park featuring a 28-foot slide, a lap pool, a lazy river, a 22-person hot tub and zero-entry pool; an outdoor splash pad; child care; an area for painting, ceramics and art programs; a fitness center; a softball diamond; two soccer fields; sand volleyball court; playgrounds; an outdoor basketball court that will be flooded in the winter for ice skating; a sledding hill that will be covered with rubber and turned into a giant “slip n side” in the summer; a community garden; and ropes course.
Ross said the center is expected to open in 2010. “We’re providing this to a neighborhood that has absolutely nothing,” he added, noting that 11,000 children ages 18 and under live within one mile.
He said memberships would be sold, and $250,000 per year will cover scholarships. Ross said no price has been set for memberships.
The late Joan Kroc, widow of the founder of McDonald’s, bequeathed $1.5 billion to the Salvation Army to build centers across the country, after overseeing the first one in San Diego. The funding comes with some strings attached, such as the need to raise local matching funds, putting half the money into an endowment to fund programs and the requirement that no child be turned away, but everyone must pay at least something to use the facility, Ross said.
The Grand Rapids Kroc Center has $21.5 million from the Kroc estate. Of the $15 million fund-raising goal, $11.5 million is planned to support the endowment and the remainder for construction. The total endowment will be $31.5 million, Ross said.
He said the center, with 70 staff member expected, plans to work with Grand Rapids Public Schools and other nearby school to provide physical education programs during the school day as well as after-school programs.
Ross said Erhardt Construction is construction manager on the building, which is being planned for silver level certification under the Leadership in Energy and Environmental Design program. Architect is IBMA; landscape architect is Jim Morgan; and Bob Israels is handling interior design.
—Elizabeth Slowik
Ballpark idea floated for downtown
Wednesday, October 15, 2008
‘NuMu’ waterfront going green
‘What’s Next for The Hill?’
Brownfield use spurs values
Van Andel Institute built upon a vision
ULI may branch out
Stan’s disappearing act
Award winners ponder challenges
Formula for growth shared
- Paying visits to similar facilities. Checking out those that make money and those that don't.
- Bring in a consultant(s) to conduct a feasibility study and an economic model.
- Create a fund-raising team.
- Move ahead and secure a lead gift. Canepa said this was a very important step to take as "a lead gift allows us to fund those activities," meaning the biggest giver tends to convince other to also donate.
- Establish a building committee.
- Start the fund-raising campaign with one-on-one visits to key individuals. "Eighty percent of the philanthropy comes from 20 percent of the donors," he said.
- Meet with public officials at the state, county and city levels.
- Hire an architect.
- Select an operations group. For the arena and convention center that turned out to be the Convention and Arena Authority, which was chartered by the state.
- Speak with related groups. For the arena, it was potential tenants like the sports teams and concert promoters. For the convention center, it would be the Convention and Visitors Bureau, hotel owners, show producers.
- Have the architect hold public workshops to showcase and explain the project. Canepa said getting community consensus for a project was vital because you can take that public support to local governments when you ask for public dollars. When Grand Action was trying to gets funds from the state for the convention center, Canepa said they asked then-Gov. John Engler for $80 million. Engler offered $45 million. Canepa said he and his co-chairmen, Dick DeVos and David Frey, got up to leave the governor's office and said,” Looks like we won't have a convention center. He then gave us $65 million. We were persistent in that case."
Real estate forum kicks off
Friday, September 19, 2008
Link to real-time voting
Delegates challenged to act
The West Michigan Policy Conference is now history. The delegates voted to select their five top policy positions (from a list of many possible positions). A Conference report will be presented by the Chamber at an upcoming Economic Club event.
By far, the top two priorities selected by the delegates to move Michigan’s economy forward were:
1) Repeal and/or major revisions to the newly enacted Michigan Business Tax
2) Making Michigan a “Right to Work” state.
Neither was a surprise as the tone was set by opening speaker Robert Genetski, who used facts he had gleaned from hundreds of factual studies. And evidently, the delegates agreed with his assessment and call for action.
As the West Michigan Policy Conference wound down, after all the votes were tabulated, delegates were challenged by co-chair Doug DeVos to “take the process personally and act to keep the agenda alive. We will need your help.”
He added, “We will compile the scorecard, and keep you informed. This is just the beginning, but we know what your top priority is, and we will need your help to make it happen.”
The Business Journal staff did a great job of keeping readers informed on the conference progress.
We enjoyed the process and look forward to any feedback on our coverage.
Next Conference will be in September of 2010.
John Zwarensteyn, publisher
Downtown transit system comments
Coletta spoke about the characteristics of cities that that age group finds alluring. A member of the audience asked whether it was important for the core city to have dedicated transit system serving just the downtown area.
"Absolutely not," she replied.
Upon hearing that remark, a few people in the audience glanced toward Peter Varga, CEO of The Rapid transit system, and Jennifer Kalczuk, spokeswoman for The Rapid, who were both in attendance.
Varga said the Colletta's comment didn't concern him much because he didn't think people really understood what she was saying.
"What she was saying was that urban areas don't really need a small downtown transit system: What they need more is a robust regional transit system. I don't think she understands our context here, but if she did understand I think she would say that we have the transit system we need."
Anne Bond Emrich, reporter
Regional Policy Conference overview
During voting audience members were given the opportunity to tally their opinions on the following three themes and seven subject areas. They voted on intensity of each subject and ranked which were most important. Here are the final results by subject areas:
Themes:
- Economic Growth
- Attraction and Retention of Businesses
- Improve Government Functions
Seven Subject Areas:
- Governance
- Workforce of the Future
- Michigan’s Education System
- Investing in Higher Education
- Health Care and Life Sciences
- Attraction and Retention of Talent
- Manufacturing and Design for the Future
Governance:
- Government Collaboration
- Reform State Spending and Revenue Streams
- Reform the structure of Michigan’s legislature
Governance topic rankings in descending order of intensity:
- Reform State Spending and Revenue Streams
- Government Collaboration
- Reform the structure of Michigan’s legislature
Ways to reform state spending and revenue streams:
- Eliminate the MBT with corresponding spending cuts: 75 percent of the vote
- The state employee health care and retirement costs to an incentive plan based on the economic performance of the state: 21 percent
- Reduce state spending across all budgets by 10 percent: 4 percent
Workforce of the Future:
- Incentivize retraining of workers
- Eliminate artificial wage setting
- Remove mandatory union membership requirements
Topic rankings:
- Remove mandatory union membership requirements
- Eliminate artificial wage setting
- Incentivize retraining of workers
Ways to remove mandatory union membership requirements:
- Implement a right-to-work status for Michigan: 77 percent of votes
- Oppose union efforts to remove secret ballot votes: 14 percent of votes
- Prohibit striking by public employees: 9 percent of votes
Michigan’s Education System:
- Incentivize school consolidation
- Align Michigan’s curriculum with the needs of emerging industries
- Institute public school spending reductions
Topic Rankings:
- Align Michigan’s curriculum with the needs of emerging industries
- Incentivize school consolidation
- Institute public school spending reductions
Ways to align Michigan’s curriculum with the needs of emerging industries:
- Align Michigan’s graduation requirement for a foreign language with emerging global markets: 30 percent of votes.
- Provide financial incentives to school districts which offer industry specific academies: 40 percent
- Expand required teacher continuing education credits to include in-site training with employers: 30 percent.
Investing in Higher Education:
- Increase student diversity
- Improve coordination among higher education institutions and secondary education systems
- Create philanthropic and partnership incentives
Topic Rankings:
- Improve coordination among higher education institutions and secondary education systems
- Create philanthropic and partnership incentives
- Increase student diversity
Ways to improving coordination among higher education institutions and secondary education systems:
- Consolidate Michigan’s public universities: 16 percent of votes.
- Allow college credit for high school student technical certifications: 32 percent
- Create additional incentives for high school students entering dual enrollment programs: 52 percent.
Health Care and Life Sciences:
- Align medical payment rates with provider performance and costs
- Decrease the rising cost of care
- Incentivize new research and product development technologies
Topic Rankings:
- Align medical payment rates with provider performance and costs
- Decrease the rising cost of care
- Incentivize new research and product development technologies
Ways to align medical payment rates with provider performance and costs:
- Increase Medicaid payments to physicians to improve access: 9 percent of votes.
- Standardize cost recovery payments to all hospitals who provide uncompensated care: 19 percent.
- Increase funding for providers with effective prevention practices: 72 percent.
Attraction and Retention of Talent:
- Re-prioritize local governments development plans
- Enhance investment in state transportation infrastructure
- Coordinated campaigns to attract professionals to the region
Topic rankings:
- Enhance investment in state transportation infrastructure
- Coordinated campaigns to attract professionals to the region
- Re-prioritize local governments development plans
Ways to enhance investment in state transportation infrastructure:
- Support the creation of regional transit systems: 32 percent of votes.
- Increase connectivity through stronger regional airports: 28 percent.
- Update funding mechanisms for transportation infrastructure: 40 percent.
Manufacturing and Design For Future:
- Create a tax structure to reward capital investments
- Incentives for energy innovation
- Streamline the state regulatory environment
Topic Rankings:
- Streamline the state regulatory environment
- Create a tax structure to reward capital investments
- Incentives for energy innovation
Ways to streamlining the state regulatory environment:
- Streamline the permitting process within state government: 45 percent of votes.
- Remove visa barriers to attract and retain foreign skilled workers: 42 percent.
- Effective “business ombudsman” from the private sector for state departments: 13 percent.
Action needed Now: Results of the voting
Here are the directives coming out of the Regional Policy Conference, in the order of importance:
1.The state government must eliminate the Michigan Business Tax and implement corresponding spending cuts.
2. Implement Right-to-Work in Michigan.
3. In health care, increase funding for providers who offer effective prevention practices.
4. To improve manufacturing/design for the future, streamline the state government permits processes.
5.To attract and retain talented employees to Michigan, “update funding mechanisms for transportation infrastructure.”
It's the MBT
Number one priority coming out of the West Michigan Policy Conference: Fix it, get rid of it -- just do something. |
Top five issues selected
1. Eliminating or revising the MBT
2. Making Michigan a Right To Work state
3. Increasing certain types of funding in the Health Care sector
4. Streamlining the permit process
5. Attracting and retaining a young and talented workforce
Van Andel comments on health care
The work of VAI researchers will ultimately affect the cost of health care because the VAI is beginning to push medicine down to the personalized level, he said. That will translate into lower health care costs, he said, because treatments for individual patients will be highly targeted -- and money won't have to be wasted on trying a number of drugs before hitting on the right one or the right combination.
Van Andel said there are issues at both the state and federal levels that impact the VAI and its work At the federal level, there's the Food and Drug Administration and the long, arduous process of going through all the FDA channels to get approval for a new drug.
"If I make a discovery it can take 20 years and $850 million before I can bring that discovery to the market place," he said.
Van Andel noted that with the security measures put in place after the terrorist attacks of Sept. 11, 2001, restrictions tightened on green cards and that has made it more difficult to recruit scientists from other countries. This country is decades away from growing its own scientists, he said, so the institute has to recruit from other countries.
At the state level, he said, there's the Small Business Tax, which presents a barrier to start up companies -- companies that might want to spin off new discoveries made here -- and sends the message that Michigan is not really open for business.
Anne Emrich, reporter
Invest in higher education
Michigan is unwilling to invest in higher education, despite the indicators that an educated, creative, innovative and diverse workforce is crucial to the state's economic future: That's the message Grand Valley State University President Thomas J. Haas, who is leading the Presidents' Council of the State Universities of Michigan, brought to the West Michigan Regional Policy Conference this morning.
"I believe there is a culture of disinvestment in higher education in the state of Michigan," Haas told the West Michigan Regional Policy Conference this morning. "Is a degree a public good or just a commodity? We need to look at a degree as a public good."
Haas was joined on the "Investing in Higher Education for Michigan" panel by Ferris State University President David L. Eisler, Northwestern Michigan College President Timothy J. Nelson and Kalamazoo College President Eileen B. Wilson-Oyelaran. They spoke to business and political leaders who will be voting this afternoon on policy initiatives they would like chambers of commerce in West Michigan to pursue in Lansing.
"I think we need to look at the outcomes, the results that we desire. In a way, maybe it's time for a similar Marshall Plan for higher education, where we look at all the different parts of the system and look at what we can do together with our state leaders and others in the business community," Haas said. "In order to have an effective policy, I do think we do need to have a rational, predictable and sustainable investment policy with the state, and I think maybe those tax incentives can go along with it. All of us in higher education must be held accountable in our fiscal responsibilities. Financial aid needs to be a part of it."
Among other comments during the session:
- Private colleges in West Michigan enroll 26,500 students, or 19 percent of all local college students, Wilson-Oyelaran said. "We are intimately involved in the preparation of talent in this area," she said.
- Ferris State University's career-oriented curriculum brings the college in close contact with business through industry councils, Eisler said. "We help connect students with great careers," he said.
- Because of the lack of diversity in northern Michigan, Northwestern Michigan College, a community college in Traverse City, must search out ways to connect its homogenous student body with a diverse world to make sure students are prepared to compete in the global economy, Nelson said. "We believe the economy in this state will develop on a regional basis. The northern Michigan economy will develop differently than the West Side of the state," Nelson added.
- "When you think about internships, think more broadly than just a student who comes to work in your business or industry," Eisler said. "Think about support and advice where you become a member of one of our advisory councils, you become an extension of our university in terms of helping that student be successful in the career, and we form these partnerships that help drive our economy forward."
- "It's not just the state legislature.... All of us together in business and higher education need to come together to attract and retain our talent here," Eisler added.
After the session, Michigan State University President Lou Anna Simon and Haas announced a new program to provide a "pathway" to allow up to five GVSU pre-med students to move seamlessly into MSU's College of Human Medicine. Haas said the arrangement is similar to one he forged while working in New York.
Elizabeth Slowik, reporter
Why health care industry is sick
From underfunded Medicaid to a payment system called "perverse" by Metro Health Hospital CEO Mike Faas, health care leaders today told Regional Policy Conference attendees what is making their industry sick.
In a session moderated by Michigan State University President Lou Anna Simon, Faas was joined by Spectrum Health President & CEO Rick Breon, Mercy Health Partners President & CEO Roger Spoelman and Van Andel Institute CEO David Van Andel.
Among the topics the hospital executives identified for those voting this afternoon on policy issues: Low payments from Medicaid that cost West Michigan hospitals hundreds of millions of dollars annually; term limits that boot legislators out of office just as they are beginning to understand health care issues; workforce development, such as recruitment and training; the shortages of nurses; and a system of payment that pays providers "to do something to people, not for them," as Faas put it.
The men -- including Breon, whose organization owns Priority Health, which is one of two dominant insurers in West Michigan -- said they recognize that business owners and their employees are nearing a breaking point of affordability for health insurance. Breon said he expects that many more people in the future will be sent out into the individual insurance market. He called for a thorough "vetting" of issues on any legislative reform in the insurance market. Priority Health vigorously opposed legislation proposed last year by Blue Cross Blue Shield of Michigan to reform the individual insurance market.
"There is no plan for changing health care, and that has to change," Breon added.
Opening the session was BCBSM President & CEO Daniel J. Loepp, whose nonprofit company was a major sponsor of West Michigan's first-ever policy conference.
Additional comments from this morning's session on The Business of Health Care and Life Sciences:
"This is a taxation you've not voted for which you are paying for," Breon said of the gap between Medicaid payments and the health care costs, which are passed on to employers via premium increases.
"One of the reasons we haven't had comprehensive reform in this state is term limits," Breon added.
"We need to do more coordination of all services so we can recruit and train the medical professionals this region needs," said Spoelman. Recruitment, particularly of specialists, was a major issue in the April merger of Hackley Hospital and Mercy General Health Partners that created Mercy Health Partners, owned by Trinity Health. "We do a good job of recruitment and training, but don't do a good job of retaining."
"Without moving to universal coverage, I'm not convinced health care is going to be able to reduce costs," Faas said.
Breon defended Spectrum Health's construction binge, and said the system may spend another $700 million over the next decade. "If you look at the actual amount of premium cost associated with all the building, it's 3 percent," he said. Faas, who presided over last year's move of Metro Health Hospital from Grand Rapids to a new $160 million facility in Wyoming, agreed that health care costs are far more connected to the personnel than the bricks and mortar.
"One of the things we haven't done is raid each other's nurses in a bidding war," said Faas. They noted that the biggest bottleneck in educating more nurses is providing enough qualified instructors.
"We can make changes in Medicaid and you don't have to add one dollar to the system," Breon said. "Just look at who is the most efficient, who makes it work and copy those things."
Elizabeth Slowik, reporter
MSU, GVSU announce partnership
"We're thrilled to bring an announcement of a significant agreement that provides a pathway for GVSU students in the pre-med program directly to the medical college at MSU," Haas said. "We want to keep our talent here."
Simon said the details are not yet clear, but Haas said five slots will be reserved at the MSU medical school for GVSU students who have completed requirements of the program.
"It's a great relationship ensuring some of the best and brightest students in West Michigan are ensured access from Grand Valley to MSU." Haas said.
Higher education requires a commitment to invest in the workforce in Michigan, Haas earlier said at Friday morning's session at the Regional Policy Conference, sponsored by the Grand Rapids Area Chamber of Commerce and other West Michigan chambers.
On the panel, Ferris State University President David Eisler, Northwestern Michigan College President Timothy J. Nelson and Kalamazoo College President Eileen B. Wilson-Oyelaran joined Haas, who leads the group representing presidents of the state's 15 public universities. "I believe that emphasized the importance of private and public colleges in moving Michigan's economy forward.
"I believe there is a culture of divestment in higher education in the state of Michigan," Haas told the political and business leaders gathered at the breakfast event. "We need to look at a college degree as a public good."
"I do believe this is just a positive note of collaboration between our two institutions," he added. "We are looking at ways to advance our institutions and ways to advance this region and our state."
Elizabeth Slowik, reporter
George Will blends humor and anger
DeVos cites leadership qualities
Their work ethic and their ability to lead and motivate people were key to their success.
DeVos shared with participants in the regional policy conference this afternoon the characteristics he believes makes for great leaders:
- A leader sets the tone, attitude and atmosphere in his community, business and home.
- A leader has the ability to communicate well
- A leader motivates people
- A leader is a giver
- A leader is a builder
DeVos said future growth in West Michigan will be generated by the people who live here, as it has been in the past.
"The main thing to do is stop thinking that somebody is going to come in and build a big factory here and create a lot of jobs," he said. "We're going to do it. Growth is going to come from us and our children."
David Van Andel comments on health care
The work of VAI researchers will ultimately affect the cost of health care because the VAI is beginning to push medicine down to the personalized level, he said. That will translate into lower health care costs, he added, because treatments for individual patients will be highly targeted -- and money won't have to be wasted on trying a number of drugs before hitting on the right one or the right combination.
Van Andel said there are issues at both the state and federal levels that impact the VAI and its work At the federal level, there's the long, arduous process of going through all the Food and Drug Administration channels to get approval for a new drug.
"If I make a discovery, it can take 20 years and $850 million before I can bring that discovery to the market place," he said.
The security measures put in place after the 9/11 terrorist attacks led to tightened restrictions on green cards, and that has made it more difficult to recruit scientists from other countries. This country is decades away from growing its own scientists, he said, so the institute has to recruit from other countries.
At the state level, he said that the Small Business Tax presents a barrier to start up companies that might want to spin off new discoveries made here -- and the tax sends the message that Michigan is not really open for business.
Anne Bond Emrich, GRBJ Reporter
Discussions, DeVos and decisions
Thursday, September 18, 2008
Session Chooses Five Changes For Government
- Remove the barriers and create rewards for local governments to consolidate services. The key state barriers to doing so are three laws that require the highest established pay scale to be enacted when services are consolidated, and eliminate Public Act 312 of 1969 that calls for binding arbitration when a unit reaches a labor impasse with public safety employees, such as police and fire.
- Repeal and/or modify the state term-limits statute
- Elect only honest, courageous and visionary leaders to state and local government posts.
- Set a benchmark for public pay and benefits packages.
- Eliminate the Michigan Business Tax and cut state spending.
Education panelists offer divergent solutions
Frank Fuller of Florida State University is a proponent of close cooperation with industry to produce graduates with skills of value in the global marketplace.
Reeths Puffer Public Schools Superintendent Steve Cousins wants to see more ways to reach students of all abilities, including the 17.74 percent in his district with disabilities.
The three panelists presented three divergent solutions to the malaise they see besetting public education in Michigan and across the U.S. at the first-ever West Michigan Regional Policy Conference being sponsored by the Grand Rapids Area Chamber of Commerce today and Friday at DeVos Place.
The conference is drawing 400-plus attendees that include a Who's Who of West Michigan business and political leaders.
Education session moderator, former Republican Lt. Governor Dick Posthumus, said he'd like to see the idea of aligning high school curriculums with marektable industry certifications brought before chamber members for a vote Friday afternoon.
Posthumus noted that while Michigan test scores lag in math and English, the state is ninth in science, and he wondered whether the factors producing that brighter showing could translate to the other subjects.
Cousins described Reeth Puffer's Transitions Academy, which targets middle students for additional reinforcement in math instruction.
"We believe we've found the secret sauce," Huizenga said. "Only through privatization comes competition. Competition works in business. It drives us to our personal best. Anything the government can do, the private sector can do just as well or better at half the cost."
Fuller led an effort to revamp the high school curriculum to meet globally recognized certifications and test results, such as certifications in technology and manufacturing as well as Advanced Placement and International Baccalaueate. "Your solutions have to be done regionally and cannot be done through incumbent state agencies. You're just going to have to find a pathway to lead these incumbent state agencies to your outcome, not theirs."
Elizabeth Slowik, reporter
Future Workers
The group discussion continually came back to three main points of education, unions, and retraining members of the workforce who have lost their jobs and have no other skill sets.
Jake Himmelspach, reporter
Questions raised at Regional Policy Conference
As I entered the Regional Policy Conference room in DeVos Place, a lot of questions were raised by people at my table.
Doug DeVos opened the conference by presenting the main objectives. He introduced Robert Genetski, who presented a dire case for Michigan's future unless it changes course. "Michigan's economic environment is not conducive to serving either manufacturing or service sectors," he said. "The Michigan Business Tax represents a poor process of governance. We need to align Michigan's policies with Michigan's performance."
He said classic economic principles are important to Michigan's future: 1) low taxes 2) free markets 3) protect individual property rights 4) stable currency.
To emphasize his point, he said, "As far back as the Old Testament, God only asked for 10 percent of our income. So if God can only ask for 10 percent, how can our government ask for more?" This got a lot of applause.
He added, "The State of Michigan and its governing officials should be rewarded on the basis of good performance. Some services government performs should not be performed by government at all. Good performing states put limits on taxes and spending."
His other comments:
- Tinkering with the Michigan Business Tax is not a solution. Michigan needs
to eliminate the new MBT. - Michigan spends significantly more than other high performing states in two
major areas: education and health care. - If you have big problems you need to make big changes.
Basically, Genetski suggested Michigan's problems are too severe to make modest changes. "We need to scrap our current system," he said, "and develop an entirely new system of governance in order to compete."
Lunch speaker Carol Coletta said the No. 1 objective for Grand Rapids is the need to attract talent. She said "place" drives the decision of where people want to live and work. "Creating distinctiveness is important."
John Zwarensteyn, publisher
Taxes, Talent, Energy and Sustainability
In southeast Michigan, the Big Three have long had a lot of clout in Lansing and are (or were) always heard. But there's a Big Three on the other side of Michigan, too. Steelcase, Herman Miller and Haworth account for a large chunk of all the office furniture made in the world, at 40 to 50 percent of all U.S. production, so their economic clout in Michigan cannot be ignored. So what ideas do the leaders of these key companies have for fixing the economic woes of the ailing Automotive State?
Pete Daly, reporter |