Sustainable Traverse City: Build Out! Build In! Build Up! · pushing growth outward towards the...

City of Traverse City Proposed Economic Development Strategy

Developed by the

Traverse Bay Economic Development Corporation

Sustainable Traverse City: Build Out! Build In! Build Up!

Jobs and Development for the 21st Century

The Traverse Bay Economic Development Corporation (Traverse Bay EDC) is pleased to outline a draft economic development strategy for the City of Traverse City pursuant to its “Agreement For Economic Development Services” contract. That agreement requires that “[t]he TBEDC shall develop a comprehensive economic development strategy for the CITY.” This working draft is presented to City elected officials and staff members in anticipation of the February 25, 2008 City Commission meeting. The Traverse Bay EDC anticipates a collaborative, iterative process that further refines the draft strategy based upon City feedback, public participation, and its continued partnership with business and industry. Together, a final plan will be refined and formally presented to the City after sufficient updates and contributions are made by all interested stakeholders.

NTRODUCTION WoconTra

worked

rking in partnership with City- and DDA- staff; as well as having received informal tributions and comments by merchants, industrialists, and developers, the verse Bay EDC has distilled credible input in developing this draft plan. It has with industry experts, the State of Michigan, and other sources to compile this

recommendation. As a four-county EDC, it has focused best practices from around the region in concentrating a strategy that is tailor-made for the uniqueness that is Traverse City.

I This draft is a working document intended to be refined with feedback from the City and input from local residents. As a starting point, the strategy outlines common steps grounded in historic attempts to successfully bring growth and development to Traverse City, but also offers a new way of thinking about old development issues to ensure long


GEOGRAPHIC NEXUS

In the past, the City has focused or naturally grown along its edges, pushing evermore out-and-out to its burgeoning city limits. The future of growth is in the corridors, those slightly neglected connectors that link the very best places in our City. We’ve grown out, now we need to grow in. We also need to plan long-term on growing UP by strengthening our existing assets and growing target industries to successfully compete.

term sustainability, measured and sensitive growth, and new job and tax base generation. Simply following old strategies and hoping for new results will not succeed in positioning Traverse City as a model for economic development into the 21st Century; nor will fanciful strategies not grounded in economic reality. A successful economic strategy, while visionary, must also be sensitive to input from local residents and businesses; leverage existing economic, community, cultural and natural resources; and be synthesized to regional and local growth trends and coordinated to those planning agencies that influence those growth patterns.

VERVIEW

downtow

Viewed from a wide lens, by nearly any measure Traverse City is an ideal place to live and work. Emanating from its solid core n are wonderful pockets of old

neighborhoods full of architectural surprises; irreplaceable natural resources like lively rivers and lakes; centers of commerce and transportation driven by entrepreneurs; and cultural centers of study and art. They combine to form the Traverse City experience. It’s the reason people choose to live hundreds of miles up a frosty peninsula. This unique blend of assets forms a solid foundation for a new sustainable economic development strategy. Leveraging off of older, established strengths to realize new opportunity is one of the keys to this plan.

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Viewed more narrowly, weaknesses exist along the City’s key corridors. It’s the connectors—those byways within the City limits that rapidly move people and cargo as links to the more developed nodes along the edge or in the core— that require attention going forward. It is fairly easy to see with even a cursory review of the Traverse City map that the City has historically grown from its downtown outward. Its edges are strong and host a diverse mix of important industries ranging from the manufacturing to the medical, educational, and transportation sectors. Its center may arguably have never been more solid, firmly anchored by thriving downtown shopping, eating, arts, cultural, and recreational sectors along the backdrop of the unparalleled natural beauty of West Bay. But the connectors between the two require attention – another key factor to this economic development strategy. This strategy, therefore, advocates an infill approach to realizing sustainable growth. This focus must not come at the expense of established nodes, however. Neither the downtown core, nor the existing two industrial parks, nor the college, nor the neighborhoods, nor Munson Medical Center, nor the airport, nor any other geographic location or economic sector within the City can be neglected in pursuit of this strategy.


Successful growth inward is not a zero sum game; rather, the sustained strength of the City’s best areas will allow growth and development to compress along its connectors. Again, leveraging the best the City has to offer is key to this economic development plan.

TARGET MARKETS FOR A

SUSTAINABLE TRAVERSE CITY:

• Advanced Manufacturing • Alternative Energy • Health Care/Health

Sciences • Information Technology • Value Added Agriculture • Fresh Water Sciences • Tourism

RETENTION, EXPANSION &

RELOCATION ARE ALL IMPORTANT INITIATIVES

If growth inward along key corridors is a geographic solution, targeting complimentary, sustainable industries for retention and expansion is the economic solution. The TBEDC has identified a number of target industries to form the core nucleus for job retention and expansion activities. Already, there are solid businesses conducting innovative and groundbreaking work within the City limits in each of these key categories. They will serve as a catalyst for continued investment in these sectors and a platform for recruiting related businesses. It is also hoped that these targets will serve as a roadmap for related course offerings in our schools, universities, and colleges so that the City’s young workforce is prepared to support these businesses in town, and not by having to relocate. Keying in on target industries is another component to this economic development strategy. The process of devising an appropriate economic development strategy is complex and time consuming. It is not intended to be resolved in a single day by only a handful of insiders. Outreach to key stakeholders is absolutely essential to the success of the plan. Throughout the remainder of 2008, concentrated efforts must be sustained to build the appropriate bridges to key stakeholders and members of the public to ensure that the plan is appropriate, modified as necessary from time-to-time, and agreed upon by those that live in Traverse City. The process, follow-up, and communication are therefore the final component to the economic development strategy. To better understand this plan for future economic development, it is worth a quick review of historic growth patterns in Traverse City.


PART 1: SUSTAINABLE DEVELOPMENT

Maximizing the use of space and enhancing community development through

targeted infill using tools like the Corridor Improvement Authority Act to revitalize key connectors within Traverse City.

GEOGRAPHIC TOUR OF HISTORICAL GROWTH PATTERNS: BUSincen

city catered

ILDING OUT! ce its incorporation as city in 1895 Traverse City has grown from its city ter outward. As a largely rural timber and agricultural based economy the to the lumber industry and to outlying farm production (and later to tourists),

and over time grew to be anchored by a downtown bustling with merchants, traders, bankers, business people, attorneys, and medical professionals. As its population grew, and as new business and industry evolved, the city naturally expanded along its edges, pushing growth outward towards the city limits.

A History is ripe with examples. Perhaps the first of these developments occurred as early as 1885 when the Northern Michigan Asylum was located on the City’s outskirts. Today, of course, the city has grown to encompass the site now known as the Grand Traverse Commons; an excellent example of a new urban development and classic infill location. Munson Medical Center was an outgrowth of the new Asylum. In 1915 James Munson donated a boarding house to the community to serve as its first hospital. Since that time, the hospital has grown—again along the city’s edge—as one of the community’s largest employers and a center of excellence for medicine and the health sciences. Northwestern Michigan College is another example. Since its founding at the base of the Old Mission Peninsula, not far from the City’s border, the school has evolved to serve more than 50,000 students annually pursuing degrees in a host of academic fields; neighborhoods have grown up to surround the college. NMC serves as an anchor to the local economy, providing high paying jobs and, most importantly, an education to thousands of residents. Other examples of edge development include the growth of Cherry Capital Airport and its adjacent Airport Industrial Park. These developments were followed by Traversefield Industrial Park. They combine to make Traverse City a gateway to Northern Michigan and serve as a jobs engine for the local economy.


These key employment centers are viewed as positive historical developments that have driven job growth and tax base generation to significant levels in large part due to specific agencies or authorities chartered with the responsibility of ensuring growth consistent with a governing mission. For example, the Downtown Development Authority has clear responsibility for a myriad of duties within the two DDA tax increment financing districts. Similarly, Munson Medical Center is governed by a Board of Directors and employs a seasoned staff to ensure market centric growth; so too does Northern Michigan College and Cherry Capital Airport. The Traverse Bay Economic Development Corporation has dedicated its Board and staff to ensuring industry retention and expansion activities at both of the City’s industrial parks; and of course the Traverse City Convention and Visitors Bureau is driving efforts to ensure the strength and growth of the tourist industry. Collectively, these agencies or authorities have done an exemplary job at ensuring growth of their respective charges and serving as magnets for related industries; as well as catalyzing additional growth and development, job creation and tax base generation. Yet the effect of this edge development is akin to urban sprawl: the city has pushed outward from its downtown core to its city limits with the key employment centers positioned in outskirt locations. Neighborhoods have developed in between, and commercial development has followed arterial routes along key connectors. It is the connectors that are in relative disrepair and in need of a focused effort to spur new


growth. The net effect is a spoke and wheel where a solid inner hub and shiny outer edges are attached to each other by slightly rusty spokes.

MPROVING & REVITALIZING KEY CORRIDORS: BUILDING IN!

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Now is a unique opportunity to focus on the City’s corridors. If the past was characterized by important developments built out along the City’s edges, a sustainable future will mandate that the City focus inward today by developing infill tions along its key linkages. As

demonstrated by the DDA’s success downtown—and by a host of other examples along the City’s edges like the airport, hospital, and college—a dedicated team that is collaboratively focused within a defined location on financeable projects can be a catalyst for spurring new economic investment.

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Financing tools are available from the State of Michigan that make investing in the City’s corridors an easier prospect than ever. Now is the time to Build In! An inventory of key corridors outside of the DDA but within the City limits reveals a number of possibilities:

• Woodmere Avenue (north – south) from Boon Street to Eighth Street;

• Eighth Street (east – west) from Woodmere Avenue to Boardman Avenue;

• Eighth Street (east – west) from Woodmere Avenue to Steele Street; • Fourteen Street (east – west) from Cass Street to Division Street; • West Front Street (east – west) from approximately Hall Street to the city limit,

inclusive of the key intersection at Division and Front; • Front Street (east – west and north – south) from approximately Railroad Avenue

to Eighth Street; and • Garfield Avenue (north – south) from Front Street to approximately Boon Street.

Admittedly, this is a high number of streets requiring attention. Any economic development strategy would be hard-pressed to suggest an expedited revitalization of all of these areas on a concurrent basis. Yet it is worth understanding that they are all characterized by common denominators that distinguish them vis-à-vis other more developed nodes within the City.


These streets are major transportation corridors built to quickly move vehicular traffic. All of these streets are decidedly pedestrian unfriendly, despite sidewalks on many of them. Zoning is largely commercial, but pockets of housing stock exist. A large variety of commercial offerings can be found on these streets; almost all of them offering parking lots forward of the buildings next to the street. There is no dominant theme to the development of these corridors, nor is there a comprehensive plan for how they fit together long term. And there is no central voice serving as a cheerleader among the residents and business owners located on these streets that can coalesce new ideas into a master plan for their respective future developments. As the table (developed by ERA in 2006) below indicates, the Traverse City retail market excluding the DDA is experiencing outsized vacancies suggestive of key corridors in struggle. Retail vacancy rates outside the DDA are four times as high within. County Retail Market Inventory Summary, 2006

Sub-Market Inventory Vacant Space Vacancy SF Per Capita DDA 458,745 10,870 2.4% 89 Rest of Traverse City 836,314 69,515 8.3% 89 Total Traverse City 1,295,059 80,385 6.2% 89 Grand Traverse County 3,652,696 159,545 4.4% 43 Total 4,947,755 239,931 4.85% 50 Source: ERA Analysis


ERA reports similarly disturbing findings relative to Office vacancies outside of the DDA. Vacancies are realized at a rate more than two times those within the DDA; again suggesting that key corridors are experiencing a disproportionate share of vacancies. Anecdotally, a simple drive along Garfield confirms a significant number of “for lease” signs dotting the roadside. Grand Traverse County Office Market

Sub-Market Inventory Vacant Space Vacancy DDA 743,761 55,873 7.5% Rest of Traverse City 524,928 89,584 17.1% Grand Traverse County 485,849 63,205 13.0% Total 1,754,538 208,662 11.9% Source: ERA Analysis A focus on revitalizing these key corridors is an important element to further strengthening the City’s existing employment nodes and the neighborhoods surrounding these corridors. A number of tools exist to foster corridor development. One example: the ability to utilize enabling state legislation through the 2005 Corridor Improvement Authority Act will allow the City to establish corridor districts to reinvest in public infrastructure improvements. The Act specifically provides for the creation by the City of an authority board to establish criteria for the development of, to plan for, and to initiate investment in, a tax increment district along key corridors if it is so determined by the City that it is “necessary for the best interest of the public to redevelop its commercial corridors and to promote economic growth.” The “corridor authority” functions very similarly to that of a Downtown Development Authority. It could—with the approval of the local governing body (the City Commission)— establish a tax increment finance plan, levy special assessments, acquire private property, and issue revenue bonds. It cannot levy ad valorem taxes; and it is subject to similar hearing requirements, Open Meetings requirements, and Freedom of Information requirements as a downtown development authority. Perhaps most significantly, the “corridor authority” could establish a master plan for the future growth and development.


Criteria for establishing such a district includes the following:

• Be adjacent to a road classified as an arterial or collector according to the federal highway administration;

• Contain at least ten contiguous parcels or at least five contiguous acres; • More than ½ of the existing ground floor square footage must be classified

commercial; • Residential, commercial, or industrial use must have been allowed and

conducted under the zoning ordinance for the immediately preceding 30 years; • Be presently served by municipal water and sewer; • Zoned to allow for mixed use that includes high-density residential; • And the City must agree to the following:

o To expedite the local permitting and inspection process in the development area; and

o To modify its master plan to provide for walkable, nonmotorized interconnections, including sidewalks and streetscapes throughout the development area.

It probably bears mentioning, as well, that the revitalization of the corridors be prioritized relative to timing, and that additional decisions be made related to the number of districts (should the strategy prove viable). It is not realistic that without a significant staff commitment and substantial resources all of the streets/corridors noted herein could be addressed in a concurrent manner, but a pilot project of one or two corridors could certainly be developed and run on a trial basis. Such a trial could be directly administered by the City or contracted to the TBEDC or any other qualified agency. It seems logical that such a pilot be conducted first along Woodmere and, perhaps, a


second corridor district be established along Eighth Street. Given the success of the DDA within the city core, replicating a similar effort and organizational structure along these corridors certainly merits serious consideration. The TBEDC proposes that in finalizing this draft economic development strategy, sufficient time and focus be spent working with City staff, the potentially impacted neighborhoods, and the businesses within these commercial corridors to discuss the appropriateness of this approach. In some instances, it may be that the legislative criteria for realizing such a corridor district are not met; in other instances, it may be that the impacted businesses or residents choose not to pursue such a strategy. Most certainly, the City staff and elected officials will need sufficient time to vet this draft proposal, considering the financial implications and impacts on service provision. Finally, it is recommended that the City consider “lessons learned” from other communities within the State that have implemented corridor districts since the legislation’s approval in 2005. All of these steps should be taken in an effort to finalize a strategy.

CORRIDOR IMPROVEMENT:

TOOLS IN THE TOOLBOX

• Corridor Improvement Authority

• TC-4 Zoning • Business Improvement

District • Principal Shopping

District • Business Improvement

Zone • Neighborhood Enterprise

Zone • Obsolete Property

Rehabilitation Act

Other tools are available to the City that will facilitate the rational development of its interior corridors. One of the most intriguing currently under review by the City Planning Office is a new zoning overlay that could include a designation called the TC-4 Neighborhood, which interestingly appears to include most of the corridors identified for revitalization. The TC-4 designation is a less restrictive, less regulated zone and could allow for additional development consistent with the guidelines established in the Corridor Improvement Authority Act. The two could be an excellent fit: TC-4 providing generalized guidance for a mix of uses and densities; the Act providing a mechanism for formally planning and funding future development through a local oversight Board of immediately impacted stakeholders. Additionally, the City should consider the following:

• Business Improvement District, Principal Shopping District, or Business Improvement Zone. Through the provisions of Public Act 120 of 1961, cities may create a Business Improvement District (BID), Principal Shopping District (PSD) or Business Improvement Zone (BIZ) to promote economic development. A BID/PSD allows a city to collect revenues, levy special assessments, and issue bonds in order to address the maintenance, security and operation of that district. A provision under Chapter 2 of the Act allows a BIZ to be created by private property owners of those parcels in a zone plan within a city or village.


• Neighborhood Enterprise Zone. The Neighborhood Enterprise Zone (NEZ)

Program was established by Public Act 147 of 1992, as amended. The program provides a tax incentive for the development and rehabilitation of residential housing. A qualified local unit of government may designate one or more areas as a NEZ within that local unit of government. The program was established to spur the development and rehabilitation of residential housing in communities where it may not otherwise occur. The program also encourages owner-occupied housing and new investment in communities.

• Obsolete Property Rehabilitation Act. The Obsolete Property Rehabilitation Act (OPRA), authorized by Public Act 146 of 2000, provides for a tax incentive to encourage the redevelopment of obsolete buildings. The tax incentive is designed to assist in the redevelopment of older buildings, in which a facility is contaminated, blighted or functionally obsolete. The goal is to rehabilitate older buildings into vibrant commercial and commercial housing projects. For a developer, the advantage is a savings on property taxes. The tax incentive freezes the local property taxes for up to 12 years, exempting from local property tax all real property improvements.

A final consideration about corridor improvement: this effort will take a sustained focus by a dedicated team over a lengthy period of time. There will not be an overnight success, and victories should be counted in linear feet rehabilitated. Every new occupancy, sidewalk, bike lane, business, or job is a success. Collectively, improvements will combine over time to define new neighborhoods and centers of commerce. A broad scale initiative will cost administrative time and money. An organization must be built or contracted with to oversee such a sustained, concentrated effort. History has pushed growth and development to the City’s edges – Building Out. The challenge for additional development will be answered through sustainable growth along the City’s corridors – Building In. A sustainable economic future will be secured in a hypercompetitive global economy by Building Up.


PART II: SUSTAINABLE JOB GROWTH

Leveraging retention and business expansion tools and collaborations (including

education) to strengthen existing business; facilitate job creation and tax base generation through the recruitment of targeted industries; and nurturing small

businesses by providing entrepreneurship counseling.

EVERAGING WHAT WORKS: BUILDING UP! Nowpretod

more than ever, Traverse City needs to focus its existing strengths and pare to excel in highly competitive global economy. Sustainable investments ay will purchase the future. This task is made evermore challenging, and

evermore critical, in light of current State-wide economic trends.

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“The economic vitality of the region will largely depend on an ability to facilitate knowledge-based work innovations; continued entrepreneurship; small business growth (including value-added propositions in agri-business and eco-tourism); international trade (especially for our manufacturing and wholesale trade sector); meaningful high technology development; significant investments in education, training, and knowledge-based work; and education collaboration and partnerships.”

POSITIONING FOR SUCCESS: UNDERSTANDING THE CHALLENGES AND OPPORTUNITIES Traverse City is not immune from the State of Michigan’s forecasted economic woes for 2008, but it does have the potential of weathering the storm, and in fact preparing for a highly competitive future, better than many other communities. While on a relative basis Traverse City is likely to fare better than most cities in Michigan, it nevertheless faces critical issues as the State economy strives to reach equilibrium over the short term, and to redefine itself over the long term, in a drastically changing marketplace characterized by significant down-sizing in the auto industry, a corresponding constriction in manufacturing, escalating energy costs, a deflated U.S. dollar, and an international marketplace highlighted by trade liberalization and increasing global competition.


Traverse City will continue to demonstrate the signs of an economy and demographic in transition. The dichotomy is becoming clearer: the City is an island not immune from the State’s economic tidal flows, but certainly possessing a different climate capable of producing different fruit. When compared to the State, our region will continue to experience accelerated population growth (16.9% from 2000 – 2010; 11.5% from 2010 – 2020); will continue to maintain inflated wage growth; and will continue as a destination magnet for tourists, retirees, artists, and professional and business service workers capable of the long-distance, electronic commute. There is something special in Traverse City that has the potential to set it apart from the State while bridging to other regions, partners, and new value-added propositions. While Traverse City cannot divorce itself from the reality of an imploding State-wide manufacturing base, it does have clear opportunities to not only weather the storm, but to successfully surf atop its crashing waves. The economic vitality of the region will largely depend on an ability to facilitate knowledge-based work innovations; continued entrepreneurship; small business growth (including value-added propositions in agri-business and eco-tourism); international trade (especially for our manufacturing and wholesale trade sector); meaningful high technology development; significant investments in education, training, and knowledge-based work; and education collaboration and partnerships.

“If the City was restricted to a single strategy moving forward, nothing is more important than sustaining these efforts, and bolstering existing businesses, through continued support and partnership. Nothing is more important than efforts to retain and expand existing business. This must be the City’s first, foremost, and number one economic development priority.”

Among these, it is empirically demonstrated that educational investments and partnerships are the surest nexus to economic prosperity. This must be an absolute priority. Partnerships of trust must define how the local economy evolves: trade schools, colleges and universities, the airport, and the hospital must all be major partners underpinning continued smart, sustainable growth; so too is inter-regional partnerships along Michigan’s west coast and with geographic high technology hubs, potentially in Silicon Valley…or Ann Arbor…or maybe Banglore, India…or Hong Kong, China for that matter. The bottom line: A nimble, borderless regional economy will make it possible to thrive at the tip of Michigan’s frosty peninsula. The City is poised to experience a potential sea-change; a shift of possibly seismic proportions. It must begin to identify and align its economy with new partners, value propositions, and geographic locales within what Tom Friedman has dubbed the “flat world.” How the City reacts during this brief moment of transition, in the face of unprecedented decline in the State economy, will define a course for generations.


BUILDING FROM EXISTING STRENGTHS: RETENTION, EXPANSION, & EDUCATION As a community, Traverse City does many things very well. As the TBEDC considers a strategy for the City’s future economic development, it is essential that recognition be proffered of those developments or areas or businesses of the City that are truly accelerators of the local economy. Many of these driving forces are already noted in this draft report; among them including Munson Medical Center, Northwestern Michigan College, Cherry Capital Airport, two highly successful (and nearly full) industrial parks, Grand Traverse Commons, and the Downtown Development Authority. Other significant contributors include local developers, merchants, industrialists and business people. Chief among them is Hagerty Insurance Company, employing 370 full time workers and with plans of expanding to a total of about 550, the company is a critical technological link to the global economy. If the City was restricted to a single economic development strategy moving forward, nothing is more important than sustaining these efforts, and bolstering existing businesses, through continued support and partnership. Nothing is more important than efforts to retain and expand existing business. This must be the City’s first, foremost, and number one economic development priority. Broadly speaking, the second most critical initiative must be an effort to support, bolster, and enhance education; as well as to ensure that current and future academic offerings at all levels are appropriately geared towards the City’s key target markets. This is good for the local economy for the obvious reason that a knowledgeable workforce will be required to underpin industry; but also as a critical catalyst to fending off out-migration of the young workforce. That is not to say that the City has a direct role in educating students, but it is a clarion call for continued and sustained communication, partnership, and coordination especially with the colleges and universities located in Traverse City. These colleges and universities are engines of growth that will allow young people to compete in the City’s target markets. TARGET MARKETS FOR RETENTION, EXPANSION, AND RELOCATION Target markets for the near term include those industries or businesses that currently conduct operations within the region or that should in light of the existing mix of businesses, specialists, and natural resources. In the list provided below, representative companies either headquartered in Traverse City or conducting business within the region are highlighted as an example of the targeted business. They include the following:

• Technology Companies Technological advances allow a growing list of firms based in the Traverse City region to do business globally. A host of very significant companies currently conduct business in or around Traverse City within the designation of “technology.” As noted previously, a very strong technology company located within the city limits is Hagerty Insurance Company. Another insurance provider is Global Marine Insurance. Together, these companies form a cluster of


specialized insurance providers that can serve as the catalyst in making Traverse City the world’s center for niche insurance products. Other high technology companies include:

o Salamander Technologies (24 employees) – supplier of high technology accountability solutions to emergency first responders;

o OneUpWeb (45 employees with another 15 expected in the near term) – integrator of online marketing solutions;

o Britten Media (120 employees) – provides banners, media and event solutions to a wide ranging corporate clientele.

• Advanced Manufacturing

The region boasts a qualified workforce serving businesses from homeland security to medical device, optics and thermo-electronics manufacturing. Leaders in the field include:

o Tellurex Corporation (30 employees) – specializing in the engineering and manufacturing of thermoelectric modules for thermal management and micro power generation applications.

o Electro Optics Technologies (28 employees with another 25 expected) – the development and manufacture of Faraday rotators and isolators, as well as photodetectors;

o Clark Manufacturing Company (75 employees with another 25 expected) – ultramodern, high technology batch fabricator of machine parts;

o Boride Engineered Abrasives (57 employees) – manufacturer of abrasives for mold and die polishing and diamond wheel dressing.

• Health Care & Health Sciences

The region continues to be a magnet for medical facility activity such as ophthalmology, urology, orthotics, and cardiac specialties related to the strength of Munson Medical Center. Leaders include:

o Munson Medical Center (4,200 employees) – regional hospital renowned for cardiac care;

o Thompson Surgical Instruments (20 employees) – high technology surgical instrument manufacturer;

o Teeter Orthotics & Prosthetics – engineering, assembly, and manufacturing.

• Alternative Energy


The four county region is poised for growth in the areas of wind, water, wood, and waste alternative energy opportunities. Much of the work currently underway is highly proprietary; and some of it is currently being done under the umbrella of local consortia. Consider the following companies:

o Jordan Exploration – bridging from traditional fossil fuel extraction; o Rock Management – bridging from traditional fossil fuel extraction; o Heritage Sustainable Energy – sustainable solutions in alternative energy; o Core Energy – carbon sequestration (to mitigate greenhouse gases) and

enhanced oil recovery using CO2.

• Value-Added Agriculture The region is a leading producer of cherries, apples, grapes, and other specialty fruits and vegetables. Known as the Cherry Capital of the world, it is also home to more than 20 vineyards, recognized for their international award winning wines. There are certainly too many leaders in this field to mention each by name, but suffice it to say that the industry is a driver to the local economy. Critical infrastructure systems and public, business and financial services are all impacted by the success of the industry, whether businesses are located directly downtown or not.

• Fresh Water

With an abundance of freshwater, our region of the Great Lakes is poised for explosive growth in the area. Northwestern Michigan College’s Water Studies Institute is a leading initiative in the region for freshwater activities; so too is the not-for-profit organization Circle of Blue. Inland Seas Education Association and the Watershed Center underpin this sector, as well. Traditionally viewed as a magnet attracting tourist to the region, it is not inconceivable that the Great Lakes could emerge as an important and sustainable economic development tool – attracting new companies and residents to fresh water – amidst a continually changing global environment.

• Tourism

An absolutely essential industry to the Traverse City economy and clearly the purview of the Convention and Visitors Bureau.

Moving forward, the City needs an aggressive strategy to continue to reach out to its existing businesses and to build off of the successes of those businesses performing within targeted industries. A sustainable approach to how these businesses and industries interact should explore the tapestry of related suppliers, vendors, contractors, and partners. Working with existing businesses, an inventory of their existing partners, customers, and suppliers should be developed in an effort to collocate related businesses to form industry clusters. Additionally, further exploration will reveal how


these companies conduct business with each other. For example, Frankfort Manufacturing – a machining company specializing in high tech solutions in medicine, agriculture, lumber, and archery – dedicates approximately 30% of its production to supply locally-based Thompson Surgical Instruments, which also does business with Traverse City-based Clark Manufacturing Company. OTHER CONSIDERATIONS: SPACE REQUIREMENTS, TRANSPORTATION, & PARKING While focused over the course of the near term on corridor development, the City must not lose sight of other pressing issues. If the past was about building out, and if the present is about building in (along the corridors), then at some point the City will have to wrestle with the question of literally building upward. The City is constrained by relatively non-flexible borders. Additional development, long into the future, will probably be driven vertically. This certainly is obvious when considering parking requirements within and around the downtown core. Questions of finance notwithstanding, verticality is a solution that may accommodate long term growth and business retention. Similarly, larger questions about transportation, circulation, and ingress/egress issues will have to be addressed.


PART III: NEXT STEPS BASED UPON CITY DIRECTION

Refining and finalizing an approach based upon City Commission and staff feedback; public participation; and comments from business, industry, and

collaborative partners.

ONCLUSION: DEFINING A PROCESS FOR MOVING FORWARD Thifor rep

implemente

s initial economic development strategy is respectfully submitted to the City its consideration. The recommendations included herein all have merit, resenting real solutions to complex issues that are proven to work as d in other communities; but this may or may not be the direction the City

opts to go. As noted in the introduction, finalizing the strategy will be an iterative process that will certainly include the City Council and staff, and that will hopefully include direct input from the businesses that work, and the citizens that live, within the City limits. But, as the very plan is intended to spawn economic development and investment, so too this submission is a starting point intended to begin the conversation.

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This report was written by Robert H. Richardson, Managing Director, Glastonbury Capital LLC, under contract and working in partnership with the Traverse Bay Economic Development Corporation. Special thanks to Tino Breithaupt, President Traverse Bay EDC, for his significant contribution and vision. Credit and appreciation for the use of the Traverse City map is extended to the Convention and Visitors Bureau. Photo credits to the author, Cherry Capital Airport, Munson Medical Center, and Sustainablog.blogspot.com.

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