Michigan government to invest in local ‘opportunity zones’

BIG RAPIDS — Areas of Mecosta, Osceola and Lake counties could all benefit from a new executive order signed by Gov. Gretchen Whitmer earlier this month aimed at aiding local economies around Michigan.

Under the terms of the order, the Michigan Department of Technology, Management and Budget (DTMB) is encouraged to purchase items and services needed by state agencies from “opportunity zones” — identified as communities that recently “have been struggling with population losses, decreased economic activity and reduced public funding.”

The order also requires the DTMB director to come up with a plan that would result in at least 3 percent of the department’s expenditures budget being spent in opportunity zones by the 2023 fiscal year.

“Absolutely, it’s a benefit. It will open up new doors through the state procurement process, working both within the state as well as within counties. It’s something brand-new and very exciting,” said Tim Mroz, vice president for strategic initiatives at Right Place, a Grand Rapids firm which contracts with Lake County to provide economic development services.

The areas named as opportunity zones are defined by census tract, rather than any sort of geographical or political boundary lines. They are located throughout the state; from Sturgis and Sault Ste. Marie in the south and north to Sandusky and Muskegon in the east and west.

In Lake County, the opportunity zone stretches from the Osceola County line to M-37 on the east and west, and from 24th Street to 96th Street on the north and south. In Osceola County, the zone is roughly marked from 50th Avenue to 160th Avenue on the east and west, and from M-10 to 19 Mile Road on the north and south. In Mecosta County, the boundary is roughly from 175th Avenue to 230th Avenue on the east and west, and from 18 Mile Road to Perry Avenue on the north and south.

Mecosta County Development Corporation President Jim Sandy said he was generally pleased to see a state directive supporting business in local communities, especially the Mecosta area. However, he said, the directive doesn’t address the greatest challenges local area businesses currently face.

“Most of my employers, particularly in the manufacturing area, are desperately seeking skilled workers,” Sandy said. “We have a shortage in that area, so quite frankly, when I hear politicians saying, ‘We’re going to create jobs,’ I’m asking, ‘Who’s going to work them?’ Does the state making a program that will create jobs benefit us when we can’t fill the skilled positions we have open?

“That said, this makes logical sense,” he added. “Why go to Indiana to buy a product when the same thing is made here in our own backyard?”

Under the terms of the order, a business seeking a state contract must be located in an opportunity zone and be certified as a HubZONE Small Business Concern by the U.S. Small Business Administration. The policy also requires businesses to notify the DTMB if they relocate outside the opportunity zone. The disadvantaged businesses must meet the same requirements demanded of other bidders, including any necessary insurance.

Mroz said opportunity zones were added to the tax code by the federal 2017 Tax and Jobs Act. At that point, state governors were asked to submit geographic areas within their state that could use economic help to the U.S. Treasury Department. At the time, Gov. Rick Snyder’s office worked with the Michigan State Housing Development Authority to identify possible opportunity zones — all of which were approved by the treasury. Whitmer’s order directs the DTMB to undertake the federal program.

Mroz said opportunity zones are unlike community redevelopment or brownfield redevelopment programs in that they are not based around government funding.

“Opportunity funds are completely private investments. It’s a whole new approach to funding economic growth,” Mroz said.

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