Growth in Greater Lansing: Feeling the momentum
Monday, April 10, 2017
When things start to go well over a period of time, energy starts to develop that almost seems to feed on itself. That energy can create an atmosphere of momentum that leads to more success. That is a picture of the sustained economic growth that is occurring in the Greater Lansing region.
Investment and job creation in the region have reached unprecedented levels. It is happening across industry sectors including insurance, financial services, advanced manufacturing, higher education, healthcare, IT, and entrepreneurial initiatives.
“In the past 12 months we have seen more than $400 million in private investment throughout the region,” said Tim Daman, president and CEO at the Lansing Regional Chamber of Commerce (LRCC). “Not only do we have the larger corporate projects, but it is exciting to see many small to mid-size businesses expanding in the region as well.”
Much of the robust growth can be attributed to a sound economy. By just about any metric, Greater Lansing has been one of the top performing regions in Michigan. Unemployment in the region at the end of 2016 was just 3.8 percent, well below the statewide average of 5.0 percent.
The region’s tourism industry set record highs in many categories in 2016. The Greater Lansing Convention and Visitors Bureau (GLCVB) reported the region experienced a 4.8 percent increase in year-to-date area lodging occupancy, setting a record high for the region at 64 percent, according to Smith Travel Research (STR) data. Additionally, the Greater Lansing region experienced a 3.4 percent increase in Average Daily Rate (ADR), or average cost per available hotel room. These numbers from 2016 show the fourth consecutive year that both overall demand for regional hotel rooms and the rate area lodging partners are able to charge for them, both went up.
“We’ve enjoyed a record-breaking year in the area,” said Jack Schripsema, president and CEO of the GLCVB. “For the first time in the history of the GLCVB, lodging partners in the region reported more than one million hotel rooms consumed for the year. It’s a milestone to be shared and celebrated with the entire Greater Lansing hospitality community.”
Not only is the current growth boom in the region coming from multiple industry sectors, it is also spread across geographic boundary lines. From the center of the urban core in Lansing and East Lansing to suburban townships into smaller communities throughout the tri-county region, cranes are in the air and more plans are on the drawing board.
Regional Economic Engines: Insurance, Advanced Manufacturing and Healthcare
The sustained growth of the region’s insurance sector has been one of the great economic development stories of the 21st century. The insurance industry has made more than $500 million in economic investment in the region in the past five years, adding 2,000 new jobs. Expansions included Jackson National’s $100 million headquarters project and Auto-Owners expanded campus in Delta Township. The industry now provides 8,200 direct jobs, 20,000 indirect jobs and a $900 million economic impact in the region.
“Greater Lansing is now home to one of the largest insurance industry regions in the United States,” said Jim Robinson, CEO of Farm Bureau Insurance of Michigan. “Twenty percent of the insurance jobs in Michigan are in this region, which is why many now refer to Lansing as the Insurance Capital for the State of Michigan.”
Greater Lansing’s prowess as a leader in advanced manufacturing is equally noteworthy. General Motors continues to make significant investments in the region including a new logistics center to sort and deliver parts to the assembly line and a stamping plant, both at GM’s Lansing Grand River plant, as well as an expansion of the Lansing Delta Township facility.
Manufacturing is paying big dividends in several communities in the region. In Mason, Gestamp North America recently announced a $7 million expansion. Dart Container recently completed a major corporate expansion following the $1 billion acquisition of the Solo Cup Company.
Charlotte-based Spartan Motors, a leader in the manufacturing of high quality specialty chassis and vehicle assembly, has made a $5.5 million investment in a new 85,000-squarefoot truck assembly plant that will manufacture Isuzu’s new F-Series trucks. The facility, which will create 200 new jobs in the region, is set to begin production in the second quarter of 2017.
“This project represents a significant milestone for Spartan, as we expand our manufacturing footprint and bring new jobs to Michigan,” said Daryl Adams, president and CEO, Spartan Motors. “Measurable growth in our relationships with existing clients, such as Isuzu, further confirms our multi-year strategic plan is driving improved performance and will continue to pay dividends for Spartan over the long-term.”
The region’s healthcare sector sits alongside insurance and manufacturing as major economic drivers. Sparrow Health System, the region’s largest private sector employer, has undertaken a significant investment in the community with more than $285 million in construction and information technology projects over a five-year period. Among the notable investments are the $64 million Sparrow Plaza which will house the Herbert-Herman Cancer Center, the Health Center in Frandor and the Gathering Place, which is a dazzling new modern and upscale dining area inside the main hospital.
The Transformation of Michigan Avenue
The Michigan Avenue corridor offers the most potential to be the transformational jewel connecting two major landmark institutions, the State Capitol and Michigan State University. In addition to Sparrow’s major investments along the corridor, major mixed used developments are changing the flavor of the area. Projects including Skyvue near Frandor, The Outfield and the recently announced Marketplace II are offering highly desired urban housing options.
The Gillespie Company recently announced a new development on Michigan Avenue’s 2200 block, just east of its upcoming Eastown Flats project. Those projects are examples of several mixed-use projects that are crucial to the region’s placemaking strategy.
“It allows us the opportunity to provide the community with vibrant spaces and vibrant places,” said Gillespie Company founder, Scott Gillespie. “This is going to help us attract and retain great talent in the region.”
The Michigan Avenue corridor also received a significant boost when the City of Lansing invested $300,000 in late 2016 for the much needed resurfacing of the road. The infrastructure work came following a campaign spearheaded by the LRCC, in which more than 125 businesses, community leaders and residents signed a letter to Mayor Virg Bernero and Lansing City Council urging the work be done immediately.
A Hot Region for Retail and Restaurants
A number of high-end retail corporations have also chosen to make their presence felt in the region for the first time. Whole Foods opened its first store in the region in East Lansing during 2016, creating more than 120 new jobs. Apple decided to take a bite out of the high end retail market with its store located in the Eastwood Towne Center. COSTCO makes its initial foray in the region with its planned opening later this fall near Park Lake and Haslett Roads in Meridian Township. The widely popular Chick-fil-A restaurant recently opened in Delta Township with a second store opening near the Meridian Mall.
Unique eateries of all shapes and sizes are populating the dining landscape, which is heightening the region’s entertainment profile. Among the local favorites; Zoobies, Cosmos, Creole, EnVie, Glazed and Confused, Arcadia Ales, Bridge Street Social, and The Dolson in Charlotte.
The latest entry in the local restaurant scene will be Green Dot Stables, a Detroit restaurant being recreated locally by owners and MSU alums Jacques and Christine Driscoll. The Driscolls are renovating the former Whiskey Barrel Saloon at 410 S. Clippert, near U.S. 127 on Lansing’s East Side. Green Dot Stables is known for an array of low-priced gourmet sliders.
“Everything on our menu from sliders to beer and some coctails is $2 and $3, said Jacques Driscoll. “We also feature a unique horse-jockey themed ambiance.
“We developed a menu around the way we like to eat - smaller portions that allow a person to try lots of different sliders in one meal,” said Christine Driscoll. “Even your picky-eater friends will find something they enjoy.”
Green Dot Stables is expected to open in August if construction schedules allow.
Growth is Spreading Across the Region
Communities throughout the region are sharing in the growth spurt. Twenty miles south of Lansing, the community of Mason is experiencing the benefits of numerous projects. Dart Bank recently held a grand opening for its new corporate headquarters located at Ash and Park Street. Showing its commitment to downtown Mason, Dart resisted the lure of cheaper land outside of town, purchased the former Inco graphics site adjacent to Dart’s existing facilities and constructed a new, state-of-the-art headquarters.
“It allowed us to consolidate departments of people and hardware that used to be scattered in multiple buildings in one central location,” said Dart Bank President Peter Kubacki.
Kubacki points to several other projects that have combined to spur growth in Mason in recent years, including the new Mason City Hall, Oracle Financial’s mixed use development at the long-vacant, historically-sensitive site located at 124 Ash Street, Dart Container’s major expansion following the Solo Cup acquisition, and Jackson National’s expansion in nearby Alaiedon Township. The growth, combined with an outstanding school system and short commutes, are making Mason an “in-demand” community.
“Good Mason properties don’t stay on the market long,” said Kubacki.
The Eaton County community of Charlotte has enjoyed a resurgence of its own, most notably as a result of the Spartan Motors expansion and investments by Hayes Green Beach Memorial Hospital and its popular AL!VE center, along with several multi-million dollar housing projects and new retail establishments downtown.
Charlotte is also a prime example of a community seeking to generate its own momentum. Coordinated by community members, #CharlotteRising is dedicated to revitalizing Charlotte’s economic development and vitality. Enthusiasm for the effort has been so strong that the group’s fundraising goal of $150,000 per year has been fulfilled for five years.
“That’s the kind of momentum we have in this community,” said #CharlotteRising board member Jason Vanderstelt.
Governor Snyder has recognized Charlotte as one of 10 “Rising Tide” communities in Michigan. The Governor also recently announced that Charlotte has been named a “Select Level” community in the Michigan Main Street Program. That designation opens the doors to resources and support that organizers hope will unleash numerous growth opportunities for Charlotte by leveraging local assets, such as the cultural and architectural heritage, local enterprises, and community pride. Through Michigan Main Street, #CharlotteRising will hire a full-time executive director and receive support for market studies, strategic planning and communication.
“We’ve built community pride and a belief that we can make this happen,” said Vanderstelt.
The Pipeline Holds More Promise
The momentum express in Greater Lansing should not be making any stops in the foreseeable future. More than $1 billion dollars in proposed projects are in the region’s economic pipeline including: Red Cedar Renaissance, which would redevelop the former golf course site near Frandor and U.S. 127; new developments changing the face of downtown East Lansing and further connecting the Capitol to Campus; Michigan State University’s $100 million research center which should be under construction by summer; and a possible new hotel in downtown Lansing.
The dynamics that create the environment for growth in the region are quite positive. There are certainly challenges that could derail progress, however, there are shifts in both the economic make-up of the region and a greater emphasis on regional collaboration that lend themselves to sustained success going forward.
“We have a much more diverse base of industry sectors that are positioning our region for greater success in the 21st century knowledge-based economy,” said Daman. “In addition, the political turf struggles that used to hold this region back have given way to a much greater spirit of regional collaboration. It’s almost as if there is a feeling there isn’t any challenge too great for us to overcome. That bodes well for our future.”
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