What is an Aerotropolis?

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2 What is an Aerotropolis? An Aerotropolis is an emerging type of urban form comprised of aviationintensive businesses and businesses that need to be readily connected to their customers. They typically extend outward miles from a major airport and are powerful economic development engines. Aerotropolis Industries Time-sensitive manufacturing E-Commerce fulfillment Telecommunications Logistics Offices for business people who travel frequently by air Agriculture After market service providers 2

3 Our Objective The objective of the Detroit Region Aerotropolis is to leverage Detroit Metro and Willow Run Airports and our strong geographic and manufacturing-based assets to drive economic transformation throughout all parts of the Detroit region. Large scale, planned airport-centered development spread over multiple parcels and multiple jurisdictions Involves the coordination of two airports, two counties, seven municipalities, and countless partnering stakeholders 3

4 A Unique Region Detroit is a region in the heart of North America surrounded by fresh water Birthplace and center of the automotive industry Superior higher education system and highly-skilled talent pool World-class airport surrounded by 60,000 acres of underdeveloped land Multi-modal capacity waterways, rail and highways accessible to airports Along the NAFTA corridor with two major international border crossings to Canada 4

5 World Class, Dual Airport System #1 On demand cargo airport in the U.S. Corporate, charter and general aviation hub 400,000 passengers & $4 billion cargo annually 5 runways including an ILS all-weather & cross wind runway Substantial air traffic and growth capacity Capacity to land 747 cargo jets Service more than 160 non-stop destinations through 37 airlines 6 runways including 4 parallel runways More than 36 million passengers & 350,000 tons of cargo/mail annually 2 state-of-the-art terminals 122 gate McNamara Terminal (year 2002) 26 gate North Terminal (year 2008) 2nd in customer satisfaction in North America (J.D. Power, 2007) 5

6 World Gateway You re looking at a situation where Detroit is the gateway to virtually every industrial center in North America, and it can be used to cross-flow passengers and goods to the rest of the world. Look at the flows from the Deep South to Asia and Europe, from South America to Asia. Detroit is right in the way. They have to fly almost right over Detroit to get there. Detroit Metro will not be a hub in 20 years it ll be a global portal to the rest of the world. Mike Boyd, President of Boyd Group, Inc., an aviation consulting company in Colorado AeroDetroit by Tom Beaman, DBusiness Magazine, December

7 Looking Forward With an aggressive business attraction effort and incentives, the Aerotropolis presents enormous economic opportunity for the region and state. Jones Lang LaSalle Economic Impact Analysis Annual Economic Impact of Primary Development Sites ($ million) One-Time Construction Impact On-Going Operational Impact Economic Activity $173 $10,100 Wages $78 $3,800 Jobs 1,464 64,422 Annual Fiscal Impact at Full Build Out ($ million) Annual Tax Revenues $97 Property Tax Revenues $74 7

8 It Takes a Region There is no magic bullet in economic transformation. True transformation comes about when people across and within all sectors (government, education, business/industry, not-for-profit, arts and culture) come together in genuine partnerships for the common good. It comes about when bureaucratic impediments are swept aside. It comes about when, intertwined with basic improvements, a few bold experiments are launched. And it comes about when the public and private sectors come together to invest the resources needed to stimulate transformation. Staying a Step Ahead: Higher Education Transforming North Carolina s Economy, Pappas Consulting Group, July

9 Partnering for Success Our public-private partnership was created to fully leverage the unique potential of our region. Non-Binding Memorandum of Understanding Public- Private Partnership July 2006 May 2007 Q Aerotropolis Development Corporation MOU signed by ten entities to advance the exploration, promotion, and commitment of resources to the Aerotropolis Plan Detroit Renaissance named the Aerotropolis as one of six key regional economic development initiatives in its Road to Renaissance (R2R) Plan A 35-member public-private task force was appointed to oversee the development of the Aerotropolis strategy The ADC will be created by intergovernmental agreement among participating local governments under Act 7, the Urban Cooperation Act of 1967 The ADC will provide a coordinated, regional approach to economic development for the Aerotropolis Region Funded through membership fees and private sector contributions 9

10 ADC Mission The mission of the Aerotropolis Development Corporation is to drive economic development and job creation in the Aerotropolis region in a sustainable and cooperative manner. To do this, the ADC will: Promote long-term partnership between member communities Build relationships with existing businesses in the Aerotropolis region Promote cooperation with other economic development entities in Michigan. Work with the State to provide attractive economic incentives to attract businesses 10

11 ADC Functions To carry out its economic development mission, the Development Corporation will be charged with collaborating with the local governments on four primary functions. Marketing & Business Attraction (IGA 5.07) Master Planning & Development Criteria ( IGA 5.01, 5.02, 5.03, 5.05) Regulatory Assistance & Incentives (IGA 5.09) Intergovernmental Communication & Coalition Building Promotion of local units Advertising & Marketing Target firm research & identification Building / Development criteria Design Standards Master Design Plan Permitting & Entitlements Incentive Application Criteria Incentive Packages DDA / LDFA Coordination MEDC, MSF, MEGA Existing businesses in Aerotropolis Logo & brand development Website Development Client Management Utilities & Infrastructure Development Aerotropolis Development Zone and Aerotropolis Development Area Designation Site Selection LDFA & TIF Investments Real Estate Development Grants Management Citizen Outreach Landowner Outreach Federal Government Outreach Private / Nonprofit Outreach Cooperation with Academia 11

12 Developing the Strategy In addition to creating the Aerotropolis Development Corporation, our Task Force commissioned five key studies to formulate the strategy for jump-starting aerotropolis development. Benchmark Detroit against competitor regions / global best practices (Complete) Prepare a master development plan (Complete) Develop a business attraction strategy (Complete) Develop a marketing communications plan (Q RFP) Develop customer-friendly processes that make it attractive to locate in the Aerotropolis (Underway) 12

13 Incentive Legislation We are also working with the state to amend existing legislation to provide an aggressive toolbox of tax incentives for attracting aircommerce linked businesses. Public Act Michigan Economic Growth Authority Act, 1995 PA 24 (MEGA) Local Development Financing Act, 1986 PA 281 Renaissance Zone Act 1996 PA 376 Plant Rehabilitation and Industrial Development Districts Act, 1974 PA 198 General Property Tax Act, 1893 PA 206 Description of Change in 2008 Amendments Expands the definition of a business eligible to receive MEGA credits to include a Qualified Aerotropolis Business ( QAB ). Allows an ADC to establish an LDFA and capture tax increment financing revenue for infrastructure improvements. Provides for the establishment of a limited number of Renaissance Zones for tax abatement to Qualified Aerotropolis Businesses within the ADC s boundaries. Enables an ADC to establish a limited number of Act 198 abatement districts. Enables an ADC board to grant personal property tax exemptions for Qualified Aerotropolis Businesses. 13

14 Key Success Factors Benchmarking has identified several key areas for success: Vision and strong leadership Increased business efficiency provided by infrastructure and business-friendly environment Fast-track review times Reduced uncertainty over process and timing Branded and unified marketing Commitment to green building and sustainability 14

15 Key Near-Term Milestones Launch Aerotropolis Development Corporation Develop/Refine Aerotropolis Master Design Plan Development Criteria Design Standards / Green Standards Infrastructure Plan Create Business-friendly Regulatory Environment One-stop shopping land, incentives, permitting Aerotropolis Incentive Legislation Adopted by State Legislature Implement unified branding and communications campaign Designate incentive legislation districts / zones Continue business attraction efforts / develop anchor tenants Q Q Q Q Q Q Ongoing 15

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