Hilfinger: Big improvements to Michigan’s business environment

Posted on March 22, 2013

The Michigan Economic Development Corp. has fundamentally changed the way it approaches economic development in the state — and that should be good news for brownfield development.

During 2012, Michigan completed a major overhaul of its brownfield laws with an eye to reducing regulatory requirements, streamlining the approval process and facilitating urban redevelopment throughout the state. Last month, the National Brownfield Authority sponsored a daylong program in Lansing that provided training and year-ahead outlook for municipal government officials, developers’ attorneys, consultants and other brownfield “users.”

Steve Hilfinger served as keynote of the event, one of his first public appearances since taking over as chief operating officer of the MEDC. An attorney by training, Hilfinger comes to his new role with an impressive résumé: 23 years in private practice focused on corporate law, followed by a stint as chief regulatory officer for the Department of Licensing and Regulatory Affairs. His understanding of business needs, in addition to his work within state government, gives him an excellent foundation for his new role to support business growth and job creation.

“We consider ourselves to be the new iconic state brand,” Hilfinger told a packed house at the Lansing Center. “We have a great story to tell. Through the governor’s and legislature’s initiatives over the last two years, we’ve seen big improvements to Michigan’s business environment. We’re very intentional about telling that story.”

He detailed a lengthy list of both wins and initiatives, including:

  • Corporate tax reform that replaced the Michigan Business Tax with the Corporate Income Tax, allowing Michigan to jump to the seventh best state to do business in from a tax perspective from its previous ranking at 49. Hilfinger pointed out that Michigan is now third among the nation’s 12 largest states — a trend that should continue to improve once the personal property tax phase-out for industry is taken into consideration.
  • Right-to-work legislation, which Site Selection magazine called a “watershed moment” for the state. Hilfinger agreed that this was a “big, positive event for Michigan,” noting that site planners said up to half of all new or relocated businesses did not even consider Michigan based on the state’s prior position on RTW.
  • Government reforms that eliminated a $1.5 billion budget deficit without the use of “one-time accounting gimmicks,” streamlined the regulatory process and wiped out hundreds of outdated laws that added undue burdens to economic development. Hilfinger noted that the Office of Regulatory Reinvention eliminated more than 1,000 rules last year without compromising public safety, a number he characterized as a good start.
  • Five-year strategic plan that focuses on business investment, community vitality, talent enhancement and state branding through the popular Pure Michigan campaign, which has brought in more than $1 billion in out-of-state visitor spending. Hilfinger noted the MEDC had significantly shifted its approach to each of these, such as the move from tax-based incentives to a focus on “economic gardening” and helping communities become “development-ready.”

“We are getting out of the business of picking winners and losers,” Hilfinger said. “We want to make economic development tools available to all businesses.

“We’re trying to fill gaps in the market where the market isn’t functioning properly. Good companies are not able to get financing. We’re looking at the gaps where our money can fill a role that private money currently isn’t filling.”

This approach by the state should be good news for the Community Revitalization Program, which is the successor to the Brownfield MBT credit program. The CRP is designed to fill gaps in the market when redeveloping brownfield and urban sites. The CRP provides grants and loans for up to 25 percent of “eligible investment” on a brownfield site, which includes construction, rehabilitation, architecture and engineering. The focus continues to be in urban centers, particularly in downtowns. This program continues to evolve and is expected to be an important tool for brownfield/urban redevelopment in the state.

John V. Byl, grbj.com