Brewed Fresh Daily

Here are three stories making news across the Midwest today:

1. ‘Sobering’ news on jobless recovery. It will take nearly 50 metropolitan areas, including Detroit, Cleveland and other Midwest cities, at least a decade to bring back the number of jobs lost in the Great Recession, according to a report released Monday. Manufacturing hubs in Michigan and Ohio could take even longer, and unemployment rates could remain stubbornly high because of populations gains, reports the New York Times. The report was commissioned by the United States Conference of Mayors.

2. Ohio sees growth ahead for wind manufacturing. China has agreed to end a subsidy for its wind energy manufacturing, and that’s good news for the Buckeye State. Ohio is a major U.S. source of components for wind turbines. Our partner station, Ideastream, reports the state is hoping to woo full assembly operations, possibly on Lake Erie.

3. Great Lakes face great peril. Is it possible to preserve the Great Lakes watershed while maximizing its commercial value? That’s the question being posed by WBEZ in Chicago, which is launching a series that explores the future of the Great Lakes. The station will host a panel discussion on the topic today, and host a call-in show today at 2 p.m., ET. Listeners and readers can join the discussion by calling 1-888-968-7677.

CLEVELAND — Should other Midwest cities be looking to the Chinese to revitalize vacant property? It’s working out pretty well so far in Toledo, as I report this week. That city has been really aggressive in courting investment from China, and they’ve created some strong relationships there that seem to be bearing fruit.

Not every deal goes so well, though. Just ask the Cleveland Cavaliers. In 2009, the team announced it was selling a 15% stake to a Chinese investor. A year later, it fell apart.

I asked Tom Waltermire how much time his team spends trying to get Chinese business interested in the Greater Cleveland market. He heads Team NEO, this region’s business attraction and marketing organization. He wasn’t dismissive Chinese investment, but it’s clearly not a priority. This part of Ohio has a long track record or trade with Europe. (Especially The Netherlands, as you’ll hear in the second audio file here.) Team NEO got funding last year to try and get more foreign investment, but Waltermire says Europe is the better bet for getting a return on that investment.

Waltermire says the emphasis should be on creating jobs, not just having the Chinese own land. The Chinese investors in Toledo say they intend to develop the Marina District, but it’s unclear how many local jobs will be created. Obviously, it will generate construction work, but lasting employment?

While Team NEO is focusing on Europe, it’s not ignoring China, and…Canada: another country with a long track record of investment in the Midwest. (Hey, it’s an easy commute.) And, while he’s not flying to China often like his counterparts in Toledo, Waltermire says the Cleveland area has seen its fair share of Chinese delegations in the past year.

Do you think more Midwest cities should be putting time and effort into getting investment in China? Let us know in comments.

 

In the past with BFD and my other blogs, I’ve always tried to keep the conversation positive. Well, that’s all changed for various personal reasons (my friends can ask me) and with CLE+Sucks.com I decided to go negative.

Let me tell you–never before has any of my positive work generated the number and breadth of comments.

Please review the CLEplusSucks.com Blog Impact Report produced by Moore & Associates. It was commissioned by my wife Kathleen. I want to thank her for supporting my work, even though most people can’t understand why (including her).

If you’d care to comment, please do so on the report itself or on this post on GeorgeNemeth.com. Thanks and looking forward to your thoughts.

Five must-read stories about the Midwest economy

1) Bridging the debate from Detroit to Windsor. The annual Mackinac Policy Conference is under way in Michigan, and the idea of a new bridge between the U.S. and Canada is taking center stage. Michigan’s governor, Rick Snyder, says the bridge is an important economic development tool. But the owners of the Ambassador Bridge are fighting the idea, and  even members of Snyder’s own Republican party are skeptical. There is plenty of MPC coverage at our partner Michigan Radio, and you can get updates from attendees on Twitter via #mpc11.

(For a musical look at the bridge, check out the Sam Roberts Band song Detroit ’67. The band appears in Chicago next week.)

2) A new college neighborhood: One of the largest downtown apartment developments that Cleveland has seen for years will rise at Cleveland State University in 2012. Campus Village is aimed at CSU faculty, staff and graduate students as well as young professionals. It will include nine buildings with 308 units, a parking garage, outdoor pool, stores and restaurants on 6.8 acres. Three buildings are scheduled to open by next August, and the others by October 2012.

3) Kids are actually eating breakfast: There’s some good news from the efforts in Chicago aimed at getting kids to eat the first meal of the day. Chicago schools have been gradually rolling out the federal Breakfast in the Classroom program, which is now mandatory in city run grammar schools. The final schools begin the program today. But already, nearly 300,000 students at some 475 schools are now participating in the program. Early numbers show the percentage of kids eating breakfast has jumped from 26 percent to 62 percent at schools that added the program, Louise Esaian, head of food programs for CPS, told our partner WBEZ.

4) Auto sales winners and losers: Yesterday, we told you that Chrysler had returned to the Big Three automakers for the first time since February 2006. Now, Edmunds.com offers some winners and losers from May auto sales and there is lots of news affecting operations in our region.  Along with Chrysler, the big news was Korea’s Hyundai and Kia, which have a development center outside Ypsilanti, Mich. Taken as one, the sister companies shot past Honda, which has big operations in Ohio, to rank as the No. 5 automaker last month. Toyota, meanwhile, came in at No. 4. The carmaker, which has safety and design operations in and near Ann Arbor,  has ranked as high as second in the American market, behind G.M.

5) Where is he now? It hardly seems possible, but one year ago tonight, Armando Galarraga pitched a near-perfect game for the Detroit Tigers. Since then, however, his fortunes have fallen. Galarraga gained major points on the graciousness scale for refusing to challenge umpire Jim Joyce’s call that robbed him of a place in history, even though Joyce admitted he was wrong. The Tiger pitcher got a car from G.M. in a ceremony the next day. But he’s now in the minor leagues. You can find him toiling on the Reno Aces, a AAA team in Nevada.

 

 

 

After a bruising couple of years, companies around the Midwest are planning to expand, rehiring workers and in some casing, adding new ones. But some also have used the recovery as an opportunity to hint that they might move elsewhere. In response, cities, states and local communities have come up with significant financial incentives aimed at convincing these companies to stay put.

 

In Illinois, Motorola Mobility Holdings Inc. is getting $100 million in financial incentives to keep its corporate headquarters in Libertyville. Company officials said they had considered moving the headquarters to more “tech-friendly” locales like the Bay Area or Austin, Texas. Most of that $100 million in incentives comes from tax credits spread out over the next decade. In return, Motorola Mobility is keeping its 3,000 jobs at the Illinois based headquarters and will invest about $600 million over the next tree years on research and development.

Caterpillar Inc. made similar headlines last month when its CEO, Douglas Oberhelman, wrote an open letter to Illinois Governor Pat Quinn. The letter outlined his concerns about the business environment in Illinois and mentioned that he was considered moving the Peoria, IL based company elsewhere. Not long after that letter was published, Oberhelman said he received e-mails, letters, packages, and even a hand delivered request from more than 30 states inviting Caterpillar to move. Shortly after that, Oberhelman met with Quinn, and later announced “Caterpillar is here to stay.”

Still, Oberhelman continues to lobby Quinn to make Illinois more “business-friendly.” Oberhelman argues Illinois needs to offer more incentives to businesses to keep up with ultra business friendly states like Texas. Incidentally, it was Texas who sent the lone hand delivered offer to lure Caterpillar away.

Two years ago, NCR Corp. announced it was moving its headquarters from Dayton, OH to a suburb of Atlanta, GA. Georgia had enticed the world’s top ATM provider through $60 million in incentives. The move was a huge blow to hard-hit Dayton, made only worse by competitor Diebold’s decision to look for a home elsewhere. The ATM and bank security system manufacturer ultimately announced this past April that it would be staying in Ohio, accepting $56 million in tax breaks, grants, and loans from the state. The company said it will use that money to build a new $100 million world headquarters in the Akron area.

It’s costing Ohio a bit more to keep American Greetings Corp. The greeting card maker will be getting $93.5 million in incentives over the next 15 years. Ohio Governor John Kasich even signed the tax reform legislation making the deal possible at the company’s Cleveland area headquarters. It’s still unclear if the company will be moving its headquarters within Ohio.

It  took the help of outside financiers to keep Goodyear Tire & Rubber in the Akron area. Akron, Summit County, and Ohio had been saving up for years to pitch in for the tire makers $160 million new headquarters to help keep it in state. Most of the money for that project ($98 million, to be exact) came from a New York based private-equity firm. That was just a few weeks ago, and construction is already under way. Local officials say this means Goodyear stays, and more jobs for construction workers.

But these sorts of corporate moves aren’t just happening between states. Within Ohio, breakfast restaurant chain Bob Evans Farms Inc. recently decided to move its headquarters from Columbus to New Albany. That move upset Columbus officials, who had offered the company incentives to stay. It also caused Ohio Valley Bank to pull out of Columbus, too. In the Miami Valley alone, Ohio spent more than $1.3 million in state funded tax credits to keep existing jobs.

Around the Midwest, the economic recovery is finally starting to show. Automakers like General Motors, Ford, and Chrysler are announcing that they plan to hire and rehire thousands of autoworkers, bringing employment among the U.S. automakers backnear pre-recession levels. GM also plans to invest $2 billion in 17 of its plants nationwide.

Illinois Gov. Pat Quinn and Ohio’s John Kasich (both Republican) say financial incentives are worth it if it means keeping thousands of jobs in state. They say it’s a critical part of keeping the Midwest on track for a complete economic recovery. But critics of such incentive programs say these aren’t new jobs. They say states like Ohio and Illinois are too broke to afford paying this much just to keep the same jobs and should instead by focusing on creating new jobs.

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What do you think of incentives to keep companies in states and communities? Is it money well spent, or should communities act differently in a time of tight budgets?

 

 

Earlier this week, Changing Gears teamed up with the Rock and Roll Hall of Fame and Museum in Cleveland to present “Living for the City: Reinventing the Region with Music and the Arts.” Changing Gears senior editor Micki Maynard hosted a panel of local experts in the music business, representing every facet of the industry.

One of the prominent themes of the discussion was that Cleveland does have a vibrant and active music scene.

“But we’ve had a loss of population, a loss of corporations, a loss of revenues and disposable income,” said Rock Hall C.E.O Terry Steward. “So we have to figure out: how do we repurpose ourselves into a new kind of music place.”

He said one of the most important roles the Rock Hall can play is to continue to emphasize the importance of music, adding “that ‘soundtrack of your life’ cliché is true.”

Stewart said the Rock Hall gets half a million visitors annually, most of whom come from out of state or even out of the country.

Karen Gahl-Mills, Executive Director of Cuyahoga Arts and Culture said she agrees with Stewart’s assessment that before the local music industry can thrive, Cleveland has to have a vibrant downtown. That’s “key to having good audiences and big robust audiences for so much of the cultural activity that takes place,” said Gahl-Mills.

When asked what sorts of projects Cuyahoga Arts and Culture funds, Gahl-Mills said all sorts. She said that’s the key to a successful music scene.

“It’s an ecosystem,” she said. “It’s the fabric of what makes the music scene and the arts scene here work is having all of these different things interacting with one another.”

Cindy Barber owns one of Cleveland’s busiest and most eclectic music venues, The Beachland Ballroom. Barber said it has two to three shows every night, and will book nearly anyone with talent. Barber is also active in setting up and assisting various other local musical endeavors.

Barber said, “I just want people to come to my street and feel like it’s Nashville or Austin. That’s my future. I want rehearsal halls, I want more recording studios and things like that.”

Fourth and final panelist Alex Bevan, most well known in the area for his song Skinny Little Boy from Cleveland, added that there is a vibrant music scene in the area where musicians come together every year and influence each other’s work: Put-in-Bay, where he knows he’ll have gigs and be able to listen to other musicians.

The panelists also pointed to Cleveland’s well known classical orchestra, and the success it has worldwide.

Terry Stewart of the Rock Hall said the problem isn’t that there aren’t enough musical events to offer people. It’s that “there is a resistance to coming back downtown. When people tell you that their favorite restaurant is a chain restaurant out in Chardon or Chagrin Falls and Cleveland is a destination food town, it tells you a lot right there about what we’re facing.”

Stewart said a lot of impediments have arisen over the years. The dwindling economy, population sprawl, and fear of coming downtown keep people away.

“The key is to change the mindset of Clevelanders, and get them back into a positive position” to visit downtown, he said, because there is a lot of music in the area.

He said he feels like Cleveland is on the tipping point, heading back to becoming a music mecca – if only folks like Cindy Barber and Alex Bevan can stick around long enough.

“Look for us getting more famous than Austin as we move forward,” Karen Gahl-Mills said as the event was winding down, to laughs and supportive cheers from the audience.

Download audio file (0504-Rock-Hall-event-audio1.mp3)

You can listen to the entire event here, and let us know in the comments, what sorts of music events do you like to attend? What keeps you away if you don’t attend any?

Watch the event now:

We asked, and you answered. Here are more of your nominations for the Best from the Midwest. Any current band or performer with Midwest roots is eligible. (More suggestions? Post them in Comments.)

From Chicago and Illinois:

Kanye West is from Chicago, Illinois. He’s already received 14 Grammy awards, and often asserts that he deserves even more.

Rapper Common is also from Chicago and also has a couple of Grammy awards under his belt, as is Lupe Fiasco.

Songwriter and multi-instrument player Andrew Bird also hails from the Windy City, as does Steve Goodman. Illinois also gets the credit for American country/folk singer John Prine, from Maywood.

Cleveland and Ohio:

The home of rock and roll — and home city of Changing Gears partner ideastream is also well represented in this latest round of Twitter and Facebook votes. Among the best known is the industrial rock band Nine Inch Nails founded in Cleveland in 1988. They have earned two Grammys, plus an additional Golden Globe and an Oscar for front-man Trent Reznor (along with Atticus Ross) for the score of The Social Network.

The group that produced the ultra catchy song I Know What Boys Like is also from Cleveland – that would be the new wave band The Waitresses. Recently reunited power pop group The Raspberry’s are Clevelanders, as is the band The James Gang. That latter group is perhaps best known for their guitarist, Joe Walsh, who later went on to become a part of The Eagles. Musician, DJ and politician Michael Stanley is also from the Cleveland area.

Detroit and Michigan:

One Changing Gears fan noted that we would be remiss not to mention musician and activist Ted Nugent, from Detroit Michigan. Bob Seger of Bob Seger and the Silver Bullet Band was born in Dearborn and grew up in Ann Arbor, home to partner station Michigan Radio. You can catch Seger on tour now.

Indiana:

John Mellencamp, best known for his heartland rock, was born in Seymour, Indiana.

And then there’s Prince…

Though the Changing Gears coverage area is generally Illinois, Ohio, Michigan, Indiana and Wisconsin, we’re bending the rules for some notable exceptions this time around. Michelle Norris, co-host of NPR’s All Things Considered, nominated Prince from Minneapolis, Minnesota. Prince has earned himself seven Grammy awards , one Golden Globe and an Oscar for Best Score too. American musician, poet and painter Bob Dylan calls Duluth, Minnesota home.

We also had a few nominations for musicians who aren’t from the Midwest but still had a big impact on the area’s music scene. Chief among those is McKinley Morganfield, otherwise known as Muddy Waters. He’s from Mississippi but is better known as the Father of Chicago blues.

[YOU TUBE VIDEO]

 

Home sales prices have been one of the most watched economic indicators during the Great Recession. So when a new set of numbers came out today, reporters nationwide jumped on the data. Changing Gears noticed a little line in the press release that read “Atlanta, Cleveland, Dallas, Detroit, Phoenix, Portland (OR) and Washington D.C. saw improvements in their annual rates of return in February versus January; New York was unchanged.”

 

 

Improved? In Cleveland and Detroit? Really?

After reading headlines all day about how Cleveland prices are still below what they were in 2000, and Detroit is as much as 30 percent below 2000 home sale prices, this one little word – improved – prompted us to call Standard & Poor’s ourselves. We’re glad we did.

David Blitzer, Chairman of the Index Committee at S&P said all that means is that between February of 2011 and February of 2010, things improved more than they did between January of this year compared to January of last year. Overall, he said, things are still only inching up.

Blitzer said it’s hard to get a clear picture of what a normal year would look like, let alone how much we might be improving. He said it looks like home prices “have been creeping up a little bit” but not advancing strongly.

“I don’t think the news is predominantly good at all,” he said. “And if you dig in you’ll find more negatives than positives.

Blitzer said if there is any good news in the latest home sales prices, it’s that things “could be a whole lot worse.”

Starting in 2003, home sales prices shot up until around 2006, only to come crashing back down in the spring of 2009. Since then, prices have been bouncing around. Some things, like the New Home Buyers Tax Credit have caused slight increases, while at other times the prices have dipped. Blitzer said it’s also important to keep in mind that different cities hit their bottom at different times. Most cities bottomed out around the spring of 2009, but Detroit hit its lowest home prices this past January.

I figured as long as I had him on the phone, I could ask him a whole host of other questions, like why we use 2000 as the year to compare home sale prices to and if this means it’s a good time to buy a house. You can find out the answers to those questions, and listen to the full interview below.

 

There’s a shop on Michigan Avenue in Chicago that has exclusive designs — and it’s only open until Saturday. But you might not have heard of any of the designers. That’s because they’re getting their start through a fashion incubator. These programs are popping up across the Midwest, with various degrees of success.

WBEZ’s Erica Hunter, an expert on the Chicago fashion scene, provided Changing Gears with a look at fashion incubators.

In most cases, a fashion incubator is a non-profit organization that offers workspace, resources, mentoring and sometimes a curriculum for aspiring designers.

One Midwest city that’s having much success is Chicago. For the past three years, Chicago’s fashion scene has been bustling with trunk and fashion shows displaying clothes by local designers, and much of this buzz is because of the success of Chicago’s fashion incubator which began in 2008.

“Our programming has been so successful because of the support of the community to be totally honest,” said Lara Miller, director of Chicago’s Fashion Incubator.

“Chicago as a fashion industry is under the radar manufacturing hub. People don’t realize how much manufacturing is actually here. But there’s quite a lot of that available to young designers,” she said.

Donaldo Smith is one of those young designers who just finished his year as a designer in residence at Chicago’s incubator. In addition to helping him gain visibility, he said the incubator helped him learn the business side of the fashion industry to help build his contemporary men’s line, Killian Gui.

“I had done a couple garments in the past, but I didn’t have a full brand. I know the incubator really helped me to turn it from a hobby into a business.” Smith said.

Stephanie Kuhr also recently finished her year at the incubator. She was a little unsure about costing structure for Dottie’s Delights, her line of vintage lingerie and foundation wear for women.

Kuhr said the incubator helped her create a budget and stay within it.

“It’s probably what makes or breaks a new designer because it’s a big question, it’s a huge deal to make sure that you’re paying yourself enough and covering all of your cost indirect and direct.” She said.

Because fashion is a global industry, designers don’t necessarily have to be in places like New York, Paris or Milan to be successful. And because of this, Miller said people in different cities around the Midwest and elsewhere have reached out to her for advice and guidance about starting an incubator in their cities.

But Chicago isn’t the only place with these incubators. Around 2005, Detroit made an attempt at a fashion incubator, but by 2007 it was closed.

Sarah Lapinski who was a contributing designer to the Detroit incubator said the right infrastructure wasn’t in place for designers to continue to grow. Aside from location, there was one other major hurdle for Detroit’s incubator, “people don’t really shop in Detroit, it just doesn’t really happen.” Lapinski said.

But there is hope in other Midwest cities, like Cleveland. Valerie Mayen who was a contestant on season eight of Project Runway is the founder of Buzz and Growl, an incubator like program in Cleveland slated to open this summer. The main goal of Buzz and Growl is to provide designers with space and professional equipment.

Mayen said people associate fashion with runways and overseas production, but for Cleveland that’s not a realistic venture. “We’re hoping that we can to help designers to grow to start their own small businesses that are legitimately providing their full time income.” said Mayen.

Who knows, maybe someday one of those designers will dress Chicago’s most famous contribution to fashion, First Lady Michelle Obama.