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Wednesday, September 25,2013

When jobs move

A case of when attempting to bring jobs into your community could be unethical

by Andy Balaskovitz
A little over a year ago, a partial roof collapse and flooding at a commercial building in Delta Township caused two tenants to look for space elsewhere in the region.

Coverys, a medical professional liability insurance company headquartered in Boston, and the nonprofit Michigan Health and Hospital Association, needed a new home for over 200 employees working in the building at 6215 W. St. Joseph Highway.

Coverys is moving its 110 jobs (and making space for 20 more) to a 26,000-square-foot office building in northwest East Lansing. The hospital association has moved its roughly 100 jobs to an office park near Interstate 96 in Okemos.

If you’re wondering why economic development officials contracted by the city of Lansing didn’t make a case for the jobs to relocate here, the answer is because they didn’t know. Neither company approached any neighboring jurisdictions about moving.

But even if he had known, Bob Tresize, the president and CEO of the Lansing Economic Area Partnership, said it would have been unethical for him to try to bring the companies into Lansing. He likened it to poaching jobs from neighbors.

“I don’t think that to have a healthy economic development environment at any one time a municipality should be attracting jobs from across the border,” Trezise said. “What you’re suggesting, in my judgment, is unethical. It does not lead to a vibrant region.

“What we do in the city of Lansing is provide a great product that would make businesses more likely to choose Lansing than would have before, and I think that is fair game.”

The city of Lansing pays LEAP $15,000 a year to serve as its economic development agency. Over a dozen local units of government pay annual membership dues that gives them access to economic development tools such as a database of businesses in their community. But Lansing is the only place that pays LEAP to work on its behalf for job retention and attraction.

But Trezise says Lansing wouldn’t be a good regional player if it targeted jobs from neighboring communities. He added that he wouldn’t attempt to relocate jobs from any Michigan community into the city, though outside the state is “allowable,” he said. He said it would have been different if either company contacted LEAP about wanting to move into the city. “That would have triggered” LEAP’s efforts to bring them here. He also said it’s “fair game” if a company is expanding, rather than relocating. Moreover: “Trying to recruit businesses and jobs outside of the state or business startups are all examples of what bringing jobs to the city means in my mind. … We have to work together and trust one another and not be shuffling businesses.”

Lansing City Councilman Brian Jeffries said that in some cases when considering tax incentives for businesses, there must be an “affirmative statement saying we’re not raiding another municipality to bring them in,” he said. As chairman of the Council’s Development and Planning Committee, Jeffries oversees new development projects in the city that involve Council approval.

However, that LEAP works on behalf of several jurisdictions is a “fair question” to raise, Jeffries said.

“You have a lot of potential conflict in the sense that everybody is vying for developments,” he said. “The question is: How do you pick and choose winners and losers here?” Lansing Mayor Virg Bernero agrees with Trezise.

“Associations are constantly moving around the region for a variety of reasons,” he said in an email. “Of course, I don’t want to see any leave the city and would love to have even more locate here. We are always happy to talk with any association or business interested in relocating in Lansing. But it has never been our practice — at least as long as I have been mayor — to specifically target businesses or associations in neighboring communities, and we are not going to start now.”

Following news of the move, Ed Reed, economic development coordinator for Delta Township, said that while associations like the Michigan Health and Hospital Association aren’t typically contacted about job retention, he’s made it a point to do so now.

“I will be calling on other associations. We certainly want to retain a number of them in the township,” he said. “We will be making efforts to make sure they know they are loved.”

As local officials trumpet the notion of regionalism, how do you find balance between what’s right for the municipality and what’s right for the region? And why draw the line at the next community over? Or even the state?

Whenever jobs relocate, isn’t that simply one region’s loss and another’s gain?

The Dallas Morning News reported last week that Republican Texas Gov. Rick Perry is catching flak for attempting to recruit — with lower taxes and less regulation — a gun-making company in Maryland the same week as the mass shooting at the Washington Navy Yard. The Morning News called it Perry’s “job-poaching tour.”

“I think governors need to be aggressive in recruiting businesses, but I think (Perry) is shameless,” Trezise said.

Fifteen to 20 years ago, Trezise said businesses’ relocating within a region “was a difficult issue for everyone to sort through.” When he did economic development for Delta Township at that time, he said several local public economic developers signed an agreement listing two conditions: That you wouldn’t cold-call or blindly recruit businesses across a border; and that if a company contacts you from across a border or is doing a site search, it’s right to adhere to the client but you are “ethically obligated to contact the other municipality and notify them,” Trezise said. “It’s an agreement I still adhere to in my professional career.”

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