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CB Richard Ellis’s Incentives Rankings Are Realistic

Monday, January 4th, 2010

I was recently asked to comment on CB Richard Ellis‘ recent “EIG State Incentives Ranking Report”  as an Certified Economic Developer who has been practicing in Illinois for nearly 30 years.CB Richard Ellis’ recent “EIG State Incentives Ranking Report” has some interesting results.

Click on the link and take a look at the map and state rankings list that’s generated.  Illinois, Indiana and Iowa are marked “competitive.”  What’s interesting is that CBRE ranks Wisconsin as “noncompetitive” because many of the border commercial parks near Illinois (e.g., Kenosha, Pleasant Prairie) have almost always been able to out-incentive northern Illinois.  And my broker colleagues at CB Richard Ellis, when trying to close a transaction, are quick to point out Wisconsin’s advantages.

Next, look at the “Aggressive” dark green states, which now include Michigan.  Most are in the south, but Ohio and the Central Plains states have also moved into the aggressive category.  These state economic development programs are traditionally market-focused and easy to do business with.  The older rust belt states, with high unemployment, have had little choice but to increase their competitiveness to just retain jobs.

Chris Manheim is a guest blogger for Alter NOW.  He is the President of Manheim Solutions, Inc., a consulting firm specializing in community, workforce and small business economic development programs.

Economic Development: Packaging A Loan in Today’s Market

Wednesday, July 15th, 2009

Economic development organizations are stepping in to help plug the credit hole.  We all know what the economy is like today, and it is unlikely that the industrial and commercial real estate markets will soon turn around. As anbroken_piggy_bank_0 economic developer, I see another side of the economy where both communities and businesses are seeking opportunities and looking at alternatives ways to secure capital.

Aside from the federal stimulus incentives, municipal, state governments and educational institutions offer a variety of incentives to encourage businesses to remain in their jurisdictions. Here’s an example:

I am currently working with a printer, a cutting-edge small business with Fortune 500 customers, to preserve more than 100 good-paying jobs in a small municipality. The company’s primary obstacle: borrowing money for new equipment and other capital improvements. The deal requires $1.5 million, all of it collateralized.  Because the company was in financial straits, an angel investor recently purchased the company and is investing heavily.  Even with this influx of new capital, lenders consider the company a high risk. To make the deal happen, we are using state, county and municipal revolving loan funds to underwrite $750,000 of the project to add to the $750,000 conventional bank loan. The lender has virtually no exposure and has first position on all assets, including building and land that are free and clear of debt.

A key player in putting the deal together is the Illinois Department of Commerce and Economic Opportunity’s Participation Loan Program, one of the few available state incentives until Illinois adopts a capital budget. For more information about the program, contact Stanley Luboff, Capital Programs Manager at stanley.luboff@illinois.gov.

Chris Manheim is our guest blogger.  He is the President of Manheim Solutions, Inc., a consulting firm specializing in community, workforce and small business economic development programs.