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Businesses may think twice about locating along Michigan’s bad roads

From: MLive

By Emily Lawler

April 7, 2015

LANSING, MI — The first step in getting new businesses to locate in Michigan is getting their decision-makers past the airport.

“If I’m looking to establish a new company in the area I’m going to come into Metro airport and get on a road that’s in poor shape. And my first question is ‘why should I invest in a community that won’t even invest in itself?'” said Bill Anderson of the Southeast Michigan Council of Governments.

On May 5 voters will decide on Proposal 1, which would increase the state’s sales tax from 6 to 7 percent and trigger a series of other laws that would generate more dollars for roads. It’s a ballot issue, but some say it’s also an economic development issue.

Many businesses look at infrastructure because they need to move products. According to the Bureau of Economic Analysis, Michigan’s second-biggest industry sector is manufacturing. In 2013, the most recent data available, it made up 14.6 percent of the state’s total GDP.

Businesses rely on Michigan’s infrastructure and it’s becoming a concern, said Michigan Economic Development Corporation and Talent and Economic Development Director Steve Arwood.

“Simply it’s a safety issue. But it’s also a wear and tear issue, a damaging equipment issue. And frankly if the roads become too tough to deal with, you’re rerouting and different logistics,” Arwood said.

Brad Williams, Vice President of Government Relations for the Detroit Regional Chamber of Commerce, said there was a businesses case to be made for passing Proposal 1 and fixing MIchigan’s roads.

The chamber works with people called “site selectors.” Companies hire site selectors to evaluate and recommend areas that the business should locate a facility. Roads and infrastructure are on a short list of things these folks consider, said Williams.

“We know that when site selectors come into Michigan, one of the five things they look at is access to infrastructure, particularly for manufacturers,” Williams said.

A lot of times site selectors assume roads and bridges are in good shape, but if they visit a site they’ll see what’s really going on, Williams said.

While the Detroit chamber is supporting Proposal 1, not all chambers of commerce in the state are. The statewide Michigan Chamber of Commerce has decided to remain neutral on the proposal.

In Grand Rapids, The Right Place focuses on advancing the West Michigan economy and works to attract businesses to the region. President and CEO Birgit Klohs said businesses looking to locate consider three top things, in this order: talent, infrastructure and incentives.

“Our roads do not play well when we try to attract business,” Klohs said.

Aside from moving products on our road system, businesses need employees to be able to get to work, Anderson said. Even the public transit component could be of interest to potential employers.

“We think that everybody has a car. They don’t,” Anderson said.

To Williams, road funding is a factor in business decisions Michigan can control.

“There are a lot of things that we can’t control. We can’t control that Michigan’s a cold weather state, right? But we can control whether we have access to basic safe and efficient infrastructure,” Williams said.

Klohs said there was no doubt Michigan was on a “very nice comeback,” but the state’s infrastructure is the next big thing to fix.

“This is an economic development issue of the biggest magnitude,” Klohs said.