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InDevelop15

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InDevelop15

  1. 1. Taggert J. Brooks, PhD Professor and Chair of Economics University ofWisconsin-La Crosse Boom-Time Building
  2. 2. I am an economist. I am not a prophet, visionary, seer, oracle or a fortune teller. Those folks have respectable jobs. Non-Standard Disclaimer:
  3. 3. 0 2 4 6 8 10 12 1986 1990 1994 1998 2002 2006 2010 2014 2018 30-Year Conventional Mortgage Rate
  4. 4. 0 2 4 6 8 10 12 1986 1990 1994 1998 2002 2006 2010 2014 2018 30-Year Conventional Mortgage Rate
  5. 5. 0 2 4 6 8 10 12 1986 1990 1994 1998 2002 2006 2010 2014 2018 30-Year Conventional Mortgage Rate
  6. 6. 0 2 4 6 8 10 12 1986 1990 1994 1998 2002 2006 2010 2014 2018 30-Year Conventional Mortgage Rate ?
  7. 7. As weather officer in World War II he and his team determined long range weather forecasts were no better then pulling them out of a hat. Ken Arrow, Nobel Laureate in Economics
  8. 8. “The Commanding General is well aware that the forecasts are no good. However, he needs them for planning purposes…” Ken Arrow, Nobel Laureate in Economics
  9. 9. Why are interest rates so low?  Low inflation and contained expectations  Aggressive action by the Federal Reserve (QE)  The rest of the world is struggling, leaving the US as a safe haven for investment.
  10. 10. $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2007 2008 2009 2010 2011 2012 2013 Fed Agency Debt Mortgage-Backed Securities Purch Liquidity to Key Credit Markets Lending to Financial Institutions Long Term Treasury Purchases Trillions
  11. 11. -10% -8% -6% -4% -2% 0% 2% 4% 6% 2008Q1 2009Q4 2011Q3 2013Q2 Change in GDP since Q1 2008 US France Germany Spain Italy
  12. 12. Oil Prices
  13. 13. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 $1,100,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 1993 1996 1999 2002 2005 2008 2011 2014 Construction Spending Millions of Dollars Total Public Construction Spending Left Axis Total Private Construction Spending Right Axis
  14. 14. 0 2 4 6 8 10 12 14 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Housing: Vacancy Rates for Rental Units 1 unit 2 or more units 5 or more units
  15. 15. - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2000 2002 2004 2006 2008 2010 2012 2014 Foreclosure Rate per 1,000 Housing Units La Crosse Brown Outagamie Winnebago
  16. 16. $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 $160,000 2007 2011 2015 Median Home Prices: Brown County
  17. 17. $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 $160,000 $170,000 2007 2011 2015 Median Home Prices: Outagamie County
  18. 18. $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 2007 2011 2015 Median Home Prices: Winnebago County
  19. 19. $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 $160,000 $170,000 2007 2011 2015 Median Home Prices: La Crosse County
  20. 20. 80.0 100.0 120.0 140.0 160.0 180.0 200.0 220.0 240.0 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Case-Shiller Index of Home Prices Phoenix Minneapolis 7 Rivers Region
  21. 21. Demographics and Development  Changing Age Profile (Boomer to Millennials)  Changing Preferences?  Technology and Agglomeration Effects
  22. 22. “10,000 Baby Boomers a day will turn 65 – every single day between now and the year 2030.” Paul Taylor – Author, The Next America
  23. 23. 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Annual Vehicle Miles Traveled/Population
  24. 24. Risks to Development  State Budget  People without vision. (NIMBY)  Manufacturing Employment  Dollar Appreciation
  25. 25. Fowler Lake - Oconomowoc
  26. 26. Thanks!
  27. 27. Creating SUSTAINABLE REDEVELOPMENT and building solutions that foster NEIGHBORHOOD REVITALIZATION. Randy Stadtmueller, President / Principal Renee Torzala, Vice President / Principal
  28. 28. 1. Listen to the Community 2. Identify the Opportunities 3. Manage the Process Project for Public Spaces: Fred Kent
  29. 29. Up Next at 5:00 pm: WEDC Resources in Action
  30. 30. DEVELOPMENT RESOURCES IN ACTION IN WISCONSIN InDevelopment March 12, 2015
  31. 31. ALIGNING RESOURCES WITH NEEDS WEDC Division of Economic and Community Development Division of Entrepreneurship and Innovation Division of Business and Industry Development Division of International Business Development Prospering Communities & Businesses Entrepreneurial Spirit Specialized Industry Leadership Global Outlook > > > >
  32. 32. IMPACT
  33. 33. DISCUSSION “TRIGGERS” The following topics lend themselves to a discussion with a WEDC representative about possible state assistance: • Gap financing for a catalytic project • Historic Preservation • Place-making initiatives • Brownfield issues • Redevelopment initiatives • Economic strategies • Gap financing for business growth
  34. 34. SITE ASSESSMENT GRANT PROGRAM Provides assistance to local governments to conduct initial activities and investigations at environmentally contaminated properties Grant: Up to $150,000 – 33% Match minimum Eligible activities include: • Phase I and II Environmental Assessments • Remedial Action Plans • Demolition of structures (including asbestos) • Removal of underground storage tanks or hazardous waste containers
  35. 35. SAG IN ACTION The Morgan District (Former Jeld-Wen site), Oshkosh West Waterfront Redevelopment (former Co-op site), Sturgeon Bay Mirro Plant, Manitowoc 97 Ellis Street, Kewaunee Menekaunee Harbor, Marinette
  36. 36. BROWNFIELD GRANT PROGRAM Provides assistance for the redevelopment of contaminated properties Grant: Up to $500,000 (70% match) Eligible applicants include local governmental units and businesses (non-for-profit and for-profit) Eligible activities include: • Site Investigations, Remedial Action Plans and cleanup activities • Building demolition or renovation • Infrastructure improvements
  37. 37. BROWNFIELD IN ACTION Metreau Apartments, Green Bay City Deck Landing, Green Bay The Rivers II, Oshkosh Foremost Farm Site, Appleton
  38. 38. COMMUNITY DEVELOPMENT INVESTMENT GRANT Provides assistance for the catalyst project in communities and planning efforts to support redevelopment Grant: up to $500,000 for implementation; $50,000 for planning 75% match required, can include private and public funds Local government is the applicant Competitive Rounds (April 17th next due date) Eligible expenditures include: • Historic Preservation • New construction • Branding/Marketing • Feasibility Studies • Redevelopment Plans
  39. 39. CDI GRANT IN ACTION - PLANNING Tecumseh Redevelopment Planning, New Holstein Downtown Site Development/Recruitment, Sister Bay Town Square Re-Use Feasibility, Green Lake Nicolet Square Redevelopment, DePere Downtown Planning, Sherwood
  40. 40. CDI GRANT IN ACTION - IMPLEMENTATION Grand Kakalin, Kaukauna Super Valu Grocery Store Development, Florence and Menasha Retlaw Theater Redevelopment, Fond du Lac Dealerfire, Oshkosh Northland Hotel, Green Bay
  41. 41. HISTORIC TAX CREDITS 20% state, 20% federal On National Register • Listed individually • Listed contributing to district % based on investment to property Credit is transferable Work with State Historic Preservation Office
  42. 42. HTC IN ACTION Dealerfire, Oshkosh Platten Place, Green Bay Northland Hotel, Green Bay Legacy Architecture, Sheboygan Lincoln School, Shawano Grand Kaklin, Kaukauna … and many more!
  43. 43. OTHER TECHNICAL RESOURCES LocateInWisconsin.com • Available Sites and Buildings • Demographic data InForce Network Certified Sites Marketing Materials
  44. 44. CONTACTS Naletta Burr Community Account Manager (608) 210-6830 naletta.burr@wedc.org Melissa Hunt Regional Account Manager (608) 210-6780 melissa.hunt@wedc.org Jon Bartz Regional Account Manager (608) 210-6846 Jon.bartz@wedc.org

Editor's Notes

  • Boom sounds like Bubble and that makes me nervous.
  • http://www.dallasfed.org/news/speeches/fisher/2011/fs110713.cfm

    Kenneth Arrow, one of the most notable Nobel Laureates in economics, has his own perspective on forecasting. During World War II, he served as a weather officer in the U.S. Army Air Corps and worked with a team charged with the particularly difficult task of producing month-ahead weather forecasts. As Arrow and his team reviewed these predictions, they confirmed statistically what you and I might just as easily have guessed: The Corps’ weather forecasts were no more useful than random rolls of a die. Understandably, the forecasters asked to be relieved of this seemingly futile duty. Arrow’s recollection of his superiors’ response was priceless: “The commanding general is well aware that the forecasts are no good. However, he needs them for planning purposes.”[6]

    Eminent Economists: Their Life Philosophies, ed. Michael Szenberg, Cambridge, England: Cambridge University Press, 1992.
  • http://www.dallasfed.org/news/speeches/fisher/2011/fs110713.cfm

    Kenneth Arrow, one of the most notable Nobel Laureates in economics, has his own perspective on forecasting. During World War II, he served as a weather officer in the U.S. Army Air Corps and worked with a team charged with the particularly difficult task of producing month-ahead weather forecasts. As Arrow and his team reviewed these predictions, they confirmed statistically what you and I might just as easily have guessed: The Corps’ weather forecasts were no more useful than random rolls of a die. Understandably, the forecasters asked to be relieved of this seemingly futile duty. Arrow’s recollection of his superiors’ response was priceless: “The commanding general is well aware that the forecasts are no good. However, he needs them for planning purposes.”[6]

    Eminent Economists: Their Life Philosophies, ed. Michael Szenberg, Cambridge, England: Cambridge University Press, 1992.

  • Poll Title: What will 30 year mortgage rates be one year from now?
    http://www.polleverywhere.com/multiple_choice_polls/fO8UK8W1yWuMqkH
  • 5 Patients. 1 Drug, we will call it the FED, and a Placebo, we will call it the ECB.
  • Its not just interest rates which have fallen from low global demand, Oil prices too.

  • Poll Title: How have the lsat 3 years been for your business?
    http://www.polleverywhere.com/multiple_choice_polls/Oxls51E44nhEOaR
  • http://www.economist.com/news/finance-and-economics/21643207-commercial-property-has-been-delivering-excellent-returns-skys-limit?fsrc=scn/tw/te/pe/theskysthelimit

    Commercial property has been delivering excellent returns
    Feb 14th 2015 | From the print edition
    KEEP interest rates low for long enough and the property market will eventually boom. That has been a good rule of thumb for investors throughout history. It is even proving true in Europe, despite the continent’s sluggish economy.
    According to Real Capital Analytics, an information provider, Europe saw €213 billion ($241 billion) of commercial-property transactions last year, up by 13% from 2013 and the highest annual total since 2007. The number of transactions more than doubled in Spain last year and there were big gains in Switzerland and the Netherlands, too. Three European markets—Austria, Ireland and Switzerland—surpassed the transaction levels of 2007, the top of the last cycle.
    In this section
    Smoking out the firebrands
    Refilling the pipeline
    On the dragon’s tail
    Nothing for money
    Survival of the least fit
    The secure v the poor
    Guaranteed profits
    Internship
    The sky’s the limit
    Reprints
    Related topics
    United States
    Switzerland
    Japan
    Business
    Property
    Europe’s rebound outpaced the 9% rise in global property transactions, although not a 15% rise in American deals. Office buildings and hotels were the most active sectors worldwide.
    It is hardly surprising that investors are enthusiastic for bricks and mortar. In both the cash and government-bond markets, yields are zero or even negative. By comparison, yields of 5% on American property or even 4% on office blocks in central London look attractive.
    Those yields have been falling, however. Sabina Kalyan of CBRE Global Investors says that prime offices (those in the best locations) in Madrid are now changing hands at 4.5%, compared with around 8% at the bottom of the market. Prime property yields in all Europe’s capitals are now at or below the level of 2007.
    Nonetheless, the long-term returns from property look very respectable. In the ten years to end-September, American commercial property delivered a total annualised return of 7.9%, according to IPD, a property-information group; returns in both Canada and New Zealand were in the double digits over the same period (see chart). That compares with the 8.1% annual return (including dividends) achieved by American equities over the same period and with the 6.8% annual return achieved on long-term Treasury bonds. The equivalent rates for British equities and long-term bonds were 8% and 6.8% respectively.
    So does this mean the market is now hideously overblown and due for another downturn? Not necessarily. Property is vulnerable to three things: a rise in interest rates, a downturn in the economy that hits demand, and a burst of speculative building that leads to oversupply. On the first point, central banks are still cutting rates in much of the world. There is the possibility of rate rises in America and Britain over the next year, but with inflation very low, central banks are likely to be cautious.
    The world economy is not exactly racing, but forecasts (for what they are worth) predict GDP growth of more than 1% in the euro area and Japan and more than 3% in America. In any case, prime properties, which investors are most enthusiastic about, managed to weather the 2008-09 recession and so should be resilient to another downturn.
    In terms of supply, it is easy to be misled by the view from The Economist’s offices of the flocks of cranes perched over London. This is the exception. Globally there is yet to be the kind of development spree that usually marks the peak of the property cycle. Deals involving development land fell by 29% globally last year, including a 3% decline in Europe.
    So it is possible that commercial property’s streak could last a good deal longer. Lots of investors need income and the obvious alternative to property—corporate bonds—has had a very good run. Investors have even been willing to accept a negative yield on bonds issued by Nestlé, a Swiss foods group, in effect paying for the privilege of lending it money.
    Until the 1970s property was the asset of choice for long-term investors such as university endowments and pension funds. It has been replaced in recent decades by government bonds, which are much more liquid. If yields on bonds stay at Japan-like levels for a while, however, the allure of property will only increase. And if inflation returns, property will be a better hedge than conventional government bonds.
    Eventually, such logic will inflate a bubble, of course. Residential property in London (fuelled by a combination of low rates and international capital) has already reached that point. But the surge of interest in second-tier and more speculative commercial-property projects that marks the top of the cycle is only just beginning, at least in Europe. The skyscrapers will tell you when to worry.
    Economist.com/blogs/buttonwood

  • Poll Title: Where would you like to live when you retire?
    http://www.polleverywhere.com/multiple_choice_polls/E53n00e5uWqgqMu
  • Fact 1: Millennials are now the largest, most diverse generation in the U.S. population................................. 5 Fact 2: Millennials have been shaped by technology. ....................................................................................... 7 Fact 3: Millennials value community, family, and creativity in their work........................................................ 9 Fact 4: Millennials have invested in human capital more than previous generations. ................................... 12 Fact 5: College-going Millennials are more likely to study social science and applied fields.......................... 14 Fact 6: As college enrollments grow, more students rely on loans to pay for post-secondary education. .... 16 Fact 7: Millennials are more likely to focus exclusively on studies instead of combining school and work. .. 18 Fact 8: As a result of the Affordable Care Act, Millennials are much more likely to have health insurance coverage during their young adult years. ........................................................................................................ 20 Fact 9: Millennials will contend with the effects of starting their careers during a historic downturn for years to come. ........................................................................................................................................................... 23 Fact 10: Investments in human capital are likely to have a substantial payoff for Millennials....................... 27 Fact 11: Working Millennials are staying with their early-career employers longer....................................... 29 Fact 12: Millennial women have more labor market equality than previous generations ............................. 31 Fact 13: Millennials tend to get married later than previous generations...................................................... 34 Fact 14: Millennials are less likely to be homeowners than young adults in previous generations. .............. 37 Fact 15: College-educated Millennials have moved into urban areas faster than their less educated peers. 42 Conclusion........................................................................................................................................................ 44

  • [Greeting]

    [Introduction of WEDC Representatives]

    Thank you for the invitation to share with Keller the business development tools and resources WEDC offers to help businesses succeed in Wisconsin.

    Whenever we are given the opportunity to talk about the financial and operational assistance we offer to companies operating in the state, we find that people are surprised to learn about the full breadth of our services.

    That’s why we are reaching out to companies such as Keller, so that you can help connect your clients with the funding and expertise available through WEDC and our many economic development partners to help them reach their goals.

    Our presentation and the reference materials we’ll leave with you are organized by company “need” to help you identify the particular programs most relevant to the businesses you serve.
  • Our divisional structure reflects critical drivers for Wisconsin’s economy.

    Our Division of Economic and Community Development helps businesses in our communities with their plans for growth. The majority of new jobs created in our state will come from businesses already here. Companies looking to relocate to Wisconsin are going to look to our existing businesses as a barometer of the state’s economic climate. This division also helps communities like yours in developing the infrastructure and programs need to retain and attract businesses and people.
    The Division of Entrepreneurship and Innovation provides support to entrepreneurs. Filling the start-up pipeline is critical to Wisconsin’s economic future. Entrepreneurs need to know that they can succeed in Wisconsin.
    Our Division of Business and Industry Development supports and nurtures driver industries that provide or will provide a competitive advantage for the state.
    The Division of International Business Development encourages the globalization of Wisconsin companies while attracting capital from international investors.

    Today we’re going to talk mostly about the tools and resources available from the Division of Economic and Community Development. Explain RAM and CAM and that CAMs are the gateway for lenders to access or learn about any WEDC resources.
  • When should you think about bringing in a WEDC representative to talk about possible state assistance?

  • Here is our contact information if anyone would like to contact any one of us after today’s event.

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