MARQUETTE - One of the goals behind the city of Marquette's drive to become a Satellite SmartZone is to keep college graduates and other skilled people in the area through high-tech jobs that, it is hoped, increase the tax base.
A SmartZone is designed to help municipalities and regions support the growth of technology-based companies through collaborating with universities, industries, governments, researchers and other entities. Fifteen SmartZones, which receive funding from the state, exist in Michigan.
The highly successful Michigan Technical Education Center SmartZone responsible for helping create 60 companies and based in Houghton and Hancock, had approached Marquette about being a Satellite.
However, the state is awarding and funding only up to three Satellites, so to better position itself competitively, the city wants to expand the boundaries of the Local Development Finance Authority, created in 1988 to include the River Park Complex, to encompass the entire city.
An LDFA captures certain taxes through tax-increment financing and provides a funding source to meet the local funding match requirement. There will be no changes in the millage assessed to property owners through a SmartZone Satellite scenario.
"You want to get the TIF district as large as you can, because you're going to capture 50 percent of the school taxes in the district," said Scott MacInnes, former Houghton city manager and MTEC board member. "And that's what gives us our funding."
There's no downside tax-wise for MTEC to capture school taxes, because "the schools are in formula. They're getting their money no matter what," MacInnes said.
Marquette Assistant City Manager Kyle Whitney noted if an LDFA or TIF district is capturing half the mills in a school district, the state will make up the difference.
"The schools are still going to end up with the same money at the end of the day," Whitney said.
Marquette Chief Financial Officer Gary Simpson said a concern is whether the state can be trusted.
"But the good part about this is, if at any point we think it's a bad deal, we can get out of it," he said. "It's not something that you sign the line and you're stuck with whatever they give you. If we just even start to suspect the schools will be harmed in any way, then we can get out of the deal and the schools won't be harmed."
Simpson said becoming a Satellite is an opportunity to attract high-tech jobs.
"The idea is to keep people educated in Marquette, in Marquette," he said. "Because what happens, you talk to your NMU graduates, ask them where they're going to spend the rest of their life. They say, oh, Minnesota, Wisconsin, downstate. Why? Because there aren't any jobs."
Richard Anderson, a SmartZone consultant, said there have been successes with putting companies together with some of the technologies coming out of Northern, Michigan State and Michigan Tech.
"I think this creates a framework around a set of natural relationships that maybe didn't make a lot of sense 10, 15 years ago," he said.
Julie Melchiori, MTEC program director, said if somebody has an idea or product, MTEC has a program - SmartStart - that helps them with strategy, such as possible competition and a customer base. However, no money will be lent.
"And after a four- to five-week period, they get a pretty good understanding if they should move forward or not," Melchiori said.
Marquette City Manager Bill Vajda said a SmartZone might be a good fit for a company with a unique product but lacking in management expertise.
"And so, the idea is you can really come from anywhere," Vajda said. "The partnership with the university is critical because more often than not the people with the completely fresh, new ideas are the folks who are doing research in higher education."
The Marquette City Commission is expected to act on the proposed amended boundaries at 7 p.m. June 30 at city hall.
Anderson said over the summer, a TIF plan would be developed and then reviewed by the state, and that plan would go before the city commission as a public hearing. The commission then would act on it, and if approved the plan would be sent to MTEC, which would submit the application to the state.
"The kind of things we're looking to get started here - all of those new high-tech kind of opportunities - we're on the same playing field as Singapore or Portland or Menlo Park," Vajda said. "The only issue is, who's going to be the first one out there to capture it and bring it to market? You can develop world-class software in Marquette just as easily as you can in any other place."
Vajda acknowledged Marquette doesn't have all that "natural, organic kind of growth" in the economy that becomes self-feeding.
"What spark do you put out there in your economy to start that growing, and then how do you kind of fan the flames to the point where those embers became a fire, and then that fire takes off on its own?" he said.
The state, Vajda pointed out, is looking for areas with a good return on investment.
"The kind of money that they're throwing into all this, they're doing it on a bet that Marquette is a good community," he said.
A public forum is set for 5:30 p.m. June 23 at the Marquette Commons, 112 S. Third St., for city representatives and various partner institutions to share information on the SmartZone concept.