Granholm & DeVos the business agenda: part 2 of 2

The Detroit dimension

Both of you have talked a lot about the importance of a revitalized Detroit to the region and to the state. What steps would you take to do this?

Granholm: The single most important thing that we can do is to have a light-rail transit system in Southeast Michigan. Now on top of that, you have to reduce the cost of living in the city of Detroit. I just came from a press conference announcing the cut on insurance rates for metro Detroit area residents who qualify. But you've got to continue to invest in revitalizing the city, bringing people downtown, making sure it's a dynamic city and all of that.

We have to look at models that have occurred in other cities. It's got to be a partnership with nongovernmental organizations as well as the regional chamber. John Hertel has now left the State Fair and is going to be the (transit) czar. He and I have talked about this. Buses are important, but a clean, safe, efficient light-rail system in this region would have an enormous impact on the region and on the city. So you have to have the private sector involved. And whether it's the Ilitches, who have an interest in making sure we've got a rail system down to (Comerica Park), or the Fords or the Penske arm of things, I think that all of those great leaders who have a great investment in making sure that this region is transformed have to be a partner in making this happen too. I think Dan Gilbert could potentially be a partner.

DeVos: No. 1, it's got to be safety and security for the city. We have 1,500 less uniformed police officers on the street in Michigan today than we did five years ago, many of those cuts coming in these last number of years in our communities. That's going to drive business decisions to locate here. It's going to drive individual decisions to live here.

The second dimension is education in the city. We have lost the focus on what education is all about. We have gradually begun to view schools and education institutions as job providers and are beginning to have debates and discussions about job provisions as opposed to kids learning and our kids walking away with an education.

Brain drain - or gain?

What new opportunities might be there for recent college graduates in the next few years? What other things can get them excited about staying here?

Granholm: What excites me is alternative energy because I think that is the wave of the future and having Michigan be the state that leads the nation in finding a way to break our dependence on foreign oil. Ann Arbor got a huge number of these opportunities, and between Toyota and Hyundai and Google and all of these 21st century jobs, it just shows you the link between the universities and commercializing great ideas in the universities to create businesses.

But Ann Arbor got a number of grants related to alternative energy like fuel-cell development. There is such great work happening in nanotechnology. I would encourage them, first of all, to go to Michigan.org and look at the Web site to see what companies were funded that are going to come to Michigan and grow in Michigan.

We've planted the seeds. The green shoots are starting to come up. We're fertilizing them. You don't rip up the field in the middle of the season.

DeVos: I'm not going to sit here and say what those jobs are going to be because I don't think I can. What I would say to you is what can be the atmosphere you can look forward to if I'm elected. The atmosphere will be a different atmosphere. Google is a nice thing. Credit to everyone involved. Credit to the governor. A thousand jobs. I think it was 200 jobs over five years if they all come to fruition. That's against 29,000 lost (in August). This is a step in the right direction but a modest step.

I think we have opportunities for those who are interested in business and manufacturing. Alternative-fuel opportunities are beginning to be apparent, opportunities as we emerge in the automotive sector as the leading area for engineering and design, one of the few in the country where we represent truly a global center.

You've got the whole alternative-energy thing going on. Life sciences become a very exciting potential for us as we look at that. And the crossover there with manufacturing, medical-device manufacturing, medical-equipment manufacturing becomes a potential sweet spot.

Let's step beyond that and say if you like the lifestyle in Michigan, what if Michigan was the most attractive place for you to start your own business? One of the great histories and traditions in our state has been entrepreneurship. Our companies all over the state are testimony. My family story is testimony to entrepreneurship.

Energy for the future

The Michigan Public Service Commission is overseeing the development of a long-range energy plan. What do you think is the biggest energy issue facing the state right now, and how would you address that?

Granholm: One is the cost of energy, which contributes to difficulty doing business in a challenging economy. And the second is our push for renewable (energy) and how we can be a state that really does have a renewable portfolio standard that pushes us and challenges us so that we don't have to get oil in the Mideast. We get it from the Midwest.

In the past six months, we've had nine ethanol or biodiesel plants announce that they are coming or breaking ground or flip the switch to run in Michigan. I just signed into law a series of agricultural renaissance zones, which encourage renewable-fuel technology and supply. We build the engines. We've got this agricultural sector, and we've got these phenomenal universities doing research on the kinds of plants and client base that we can have for renewable energy. We should be the state that breaks the U.S.' dependence on foreign oil or at least shows them how to do it.

DeVos: Electric. Our costs of electricity by every dimension that I've looked at are high by any standard. Dow Corning made a decision to build a major plant here for their silicon production. Their decision was in spite of a massive cost uptake because of electrical cost. It's a very high electrical usage in that process. Now we were able to overcome that as a state, and they were able to overcome it because they had certain synergies with other operations that mitigated that negative. But if this particular company wasn't headquartered in Michigan and had already pre-existing synergies, there was no way on God's green Earth they'd be here.

I think we look at transmission. The immediate view is to say we have a shortage of electricity. We need more power generation, and we better go build another plant. There's capacity out there elsewhere in the system that we can utilize through line transmission to buy other power. We don't have to make it ourselves in this state to be able to have access to it. Every other state around us has lower cost. If they're producing, they will produce it cheaper in Ohio and are willing to sell it to us at a cheaper price, why in the world wouldn't we want to increase our transmission ability to access that?

Creating cool cities

Gov. Granholm, your Cool Cities plan has been both praised and criticized. What do you think is the single biggest difference that the initiative has made?

Granholm: It has been a mechanism for local communities to identify signature projects, working together with their community organizations that are business- and economic-development arms and leveraging private resources. All the people who criticized it are on the other side of the aisle. I'm not sure what the criticism is. All this program does is pool state resources that would be going on anyway but focusing them on signatures projects that clearly demonstrate a value to that particular community, something that is going to create lofts, live-where-you-work arrangements that foster the arts. The community decides.

It has really breathed life into a lot of communities that might not have really realized their own power at the local level to develop and partner on a project that makes them unique or dynamic.

Mr. DeVos, why would you eliminate the Cool Cities program and what would you do in its place to help communities?

DeVos: The Cool Cities program is a $4 million item that has created lots of smoke and no real action. This has not spurred significant numbers that I have heard of new initiatives. This has merely provided some funding for pre-existing initiatives. And I look at what we did in Grand Rapids by really getting a community involved in transforming a city. That's become a cool city, in my estimation. That was way before the Cool Cities program. I'm not convinced at all that it is necessary. I do think that we want to make our cities cool cities, that we want to and need to make our cities livable.

That goes back to safety and security. It's going to go back to costs of living. Our cities have become punitive. The cost of living in the city today too often not only includes an income tax but it includes property taxes that are punitive. And beyond that, you end up with the cost of education because too often families that want to live in the city decide they are not able to send their kids to school. So they often have the cost of education unless we get charter schools going in there.

Tapping into tourism

Gov. Granholm, Michigan's tourism businesses are pushing for a boost in the state's annual promotional spending - from $5.7 million to $30 million - without tax, fee or surcharge increases to pay for the higher budget. Do you support this idea? If not, should tourism get more promotion dollars? How?

Granholm: I certainly support increasing the marketing budget for Michigan. Because they could not get a consensus inside of the tourism industry about where a dedicated stream of funding would come from, we went to the 21st Century Jobs Fund to be able to do it. That's $15 million, which is a significant increase, and $40 million for marketing for business, which is tremendous. One way or the other, we have to continue to increase the investment in telling our story about tourism because we have such phenomenal, unique features in this state that other states don't even know about.

What would you do in your next four years to increase funding for tourism?

Granholm: We're going to continue to clearly invest through the 21st Century Fund - and we've tripled the amount of money that we are investing. But it probably needs to be somewhere along the lines of what Illinois has done ($40 million or $50 million on marketing). And I think we need to do a better job, for example, of advertising in Southern states, where, especially in the summertime, they're looking for places to go. A lot of the snowbirds of Michigan travel to Florida. Why not advertise in Florida for those Floridians to come to Michigan and enjoy a great summer?

DeVos: I do support focus on our tourism industry, but one of the things I have said is we need to do a better job of promotion. We've been extremely low, on average, in this state, and we've forgotten a fundamental principle of business: You don't build the brand only advertising in election years. We've let it kind of go, and now all of a sudden, boom, we're throwing all sorts of money at it coincidentally in an election year. What's next?

I'm not going to sit here and pick a number. I think we do need to increase the amount of state promotion that we're doing. It is an important industry, and it has a payback to us that is clear and that we need to be advocating more consistently and more actively to build a Michigan brand beyond just over promoting in the (election) years.