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12/31/2006
Economic woes trickle northwardTRAVERSE CITY — Many northern Michigan businesses and their workers felt repercussions of southeast Michigan's struggling manufacturing sector in 2006. Ripples traveled north from the economic woes of the Big Three auto makers and the fallout hurt area manufacturers, the region's tourism industry and other segments of the local business sector. Several regional manufacturing plants closed this year, while high gas prices and other economic factors thwarted any significant comeback for regional tourism. For others, it wasn't business as usual in 2006. A host of new faces arrived to head up key business positions at area resorts, festivals and economic development agencies. There were pockets of success in the local business field, as well. A redevelopment project at the Grand Traverse Commons gained speed in 2006 under developer Ray Minervini, and the region's wine industry expanded this year with several new wineries opened or under construction amid another banner year for grape production. Local cherry growers also had a successful production year, although a handful were set back by frost and hail damage last spring and summer. Here's a recap of the Record-Eagle's top business stories for 2006:
National Cherry Festival re-organizesNew Executive Director Tom Menzel pledged 2006 would signal change for the National Cherry Festival, and he kept that promise. 
Menzel
"Internally, we've made major structural changes,” said Menzel, a Traverse City native and a former local politician in the Chicago area, where he built a reputation as an agent for change. The cherry festival downsized its massive organizational chart that included more than 70 decision-makers into an 11-member Board of Governors to oversee the festival's personnel and events. It also launched a multi-year marketing plan and hopes to sell its Sixth Street headquarters, a site that's been a huge financial drain. "Without that building, we make money,” Menzel said. Plenty of challenges remain for Menzel and the festival as he looks for ways to develop the event outside of its eight-day window in July with off-season activities including a Winter Wonderfest and other promotions with local businesses and wineries. He's also working on joint marketing and promotional efforts with the Traverse City Convention and Visitors Bureau and the Traverse City Area Chamber of Commerce. "We're one of the best-known festivals in the country, but we haven't really promoted that the way we should,” he said. Another tough year for manufacturingHundreds of northern Michigan residents felt the pain of the continuing economic slump in manufacturing. Bankruptcies at major auto parts suppliers such as Delphi Automotive squeezed local suppliers to cut their costs and profit margins, although companies like Tower Automotive kept their local operations intact, even as employees had to accept wage and benefit cuts as part of debt restructuring efforts. 
Linda McClain, a line leader at I&W Industries, stacks metal tubing for shipment to Delphi Corp. and Mark IV Automotive. I&W announced in 2006 that it would be closing its plant in Traverse City. Other companies couldn't hold on. The Georgia-Pacific particleboard company outside of Gaylord closed in the spring, idling more than 200 workers and an estimated $12 million annual payroll. In August, Northern Diecast Corp.'s plant near Harbor Springs abruptly closed and left around 130 full-time employees without jobs. The attrition continued this fall when I & W Industries, the former Nish-Nah-Bee Industries plant in Traverse City, announced it will cease operations by spring and lay off more than 200 employees. But it wasn't all bad news for area manufacturers this year. Tellurex Corp. of Traverse City in August received a two-year grant from the Department of Defense to continue its development of materials that convert heat to electric power. Less than a month later it was among more than 60 Michigan companies chosen for a $100 million capital start-up program from the state's 21st Century Jobs Fund to develop alternative energy, homeland security and other advanced technology efforts. A dozen other local companies received a boost in December when the state approved a "Tool & Die Recovery Zone” offering state and local tax breaks and other economic incentives to manufacturers, part of recent changes to the state's tax-free Renaissance Zone laws. Tribes work on new casinosThe Grand Traverse Band's Economic Development Corp. spent much of 2006 completing an $11 million upgrade to the Grand Traverse Resort & Spa in Acme, and in September announced plans for a new $80 million casino and hotel complex next to its Turtle Creek Casino along M-72 in Whitewater Township east of Traverse City. The new resort is slated for completion in mid-2008. The nearly 350,000-square-foot development will include a 64,000-square-foot gaming floor, a 120-room hotel catering to high-roller gamblers, a concert and entertainment venue, restaurants and shops. The current Turtle Creek Casino will be demolished when the new facility opens, ultimately to be replaced by a parking deck. The band considered adding gambling facilities to the resort when it purchased the property almost four years ago, but those plans faced several potential obstacles including a new gaming compact with the state for an off-reservation casino. The Turtle Creek property is already in federal trust status and the new casino can be operated under the tribe's existing compact, tribal officials said. Meanwhile, the Little Traverse Bay Bands of Odawa Indians based in Emmet County is working on a new casino in Petoskey to replace Victories Casino. The new facility, slated to open next summer, will include an estimated 50,000 square feet of gambling space that will double the size of the current casino, plus amenities including a concert hall and a high-end Las Vegas-style nightclub. State Theatre goes through changesIt was a year of transition for the 57-year-old theater on East Front Street downtown. Property ownership transferred to Rotary Charities of Traverse City in January from a local group that raised millions to renovate the theater but couldn't complete the project. Rotary held a $250,000 lien on the building from an earlier grant to the restoration group. The Rotary group sold the adjoining building, the former Kurtz Music store, in September to Traverse City resident Dan Marsh, who plans a new restaurant there. The theater was a successful venue for the second year of the Traverse City Film Festival that's organized by Oscar-winning filmmaker Michael Moore. The festival made an offer for the building this fall to the Rotary and negotiations are continuing but no deal is imminent, a Rotary official said. "We're still talking,” said Marsha Smith, the executive director of Rotary Charities. "There's nothing new to report at this point.” Shanty Creek Resort soldA deal almost two years in the works brought new ownership to Antrim County's largest employer, and some stability to a resort that started 2006 under a cloud of uncertainty. 
A deal almost two years in the works brought new ownership to Antrim County’s largest employer, Shanty Creek Resort. A subsidiary of St. Louis-based Apex Oil purchased the sprawling resort in March, 16 months after the property was taken over in foreclosure by Comerica Bank. The property includes three residential complexes, two ski areas and four golf courses. Jack Eslick joined the resort's staff in late September as chief operating officer, among four new resort executives. The new owners have invested more than $1 million in infrastructure and technology upgrades, Eslick said. In early 2007, efforts will turn toward the Summit Village property for renovation of the rooms, lobby, meeting areas and other facilities. "It's a big ship to turn,” he said. "I tell people it's not all going to happen overnight.” Meijer's Acme plans bogged in litigationOne project that didn't happen in 2006 was construction of a new Meijer store in Acme, but the plans still made headlines. The Acme Township Board approved a conditional land-use permit for the store at M-72 and Lautner Road last spring. But Meijer objected to conditions that limited hours and a brick facade on the building. The company filed a lawsuit in 13th Circuit Court that added to a string of litigation over stalled development proposals in Acme Township. The board this month relaxed some of those conditions, but the Grand Rapids-based retailer didn't jump at the offer. Meijer officials said they would wait for the court to rule on its lawsuit before announcing their next move. WRS sued by stateA lagoon that gave way in late 2005 and spilled hundreds of thousands of wastewater at the Williamsburg Receiving and Storage plant launched a lengthy investigation by the state Department of Environmental Quality and spurred numerous complaints from neighboring property owners. Ongoing contamination problems at the fruit processing plant north of M-72 in Whitewater Township spurred a lawsuit by the DEQ in February. 
Cherry Blossom, LLC, on Angell Road in Willaimsburg, has drawn complaints from neighbors about the smell that emanates from the plant on a regular basis. The case started in Lansing but was transferred to Grand Traverse County Circuit Court as several neighboring property owners joined the suit. Judge Thomas Power last week rejected a proposed settlement in the state's portion of the lawsuit, clouding how the state will proceed. The company spent much of the year emptying the troublesome storage lagoon, but neighbors remain concerned about odors and other environmental issues on the site. Changes in tourism, economic development personnelTwo key positions for generating local economic growth were filled by newcomers in 2006. It was the first year for Brad Van Dommelen at the Traverse City Convention and Visitors Bureau after he was hired in late 2005, while Traverse City native Tino Breithaupt took over in March as head of the Traverse Bay Economic Development Corp. under the Traverse City Area Chamber of Commerce. Van Dommelen's first-year initiatives included a gas card promotion for visitors who planned extended stays in the Grand Traverse region. He also ramped up the bureau's golf promotion efforts and updated a 1993 study on local tourism numbers and the industry's economic impact on the region. The study indicates the number of visitors to the Grand Traverse area reached nearly two million people this year, with direct and in-direct spending of around $937 million. Occupancy rates for local hoteliers, however, remain mired in the low 50 percent range because of the growth of the number of area lodges and seasonal condominiums. The chamber hired Breithaupt from the Michigan Economic Development Corp., where he was head of the agency's Technology Tri-Corridor program developing business strategies life science, homeland security and defense technology companies. He also worked in alternative energy development for the agency. Local communities vie for ethanol plantsNorthern Michigan was in the forefront during 2006 in the race toward alternative fuel production, specifically for ethanol plants that could shift Michigan's agricultural landscape to more corn production. The Kingsley area was in the running for an estimated $100 million ethanol plant planned by NextGen Energy LLC, where former state House speaker Rick Johnson is a partner. Cadillac and other communities also were considered and Kingsley was believed to be the front-runner until NextGen officials said in August the refinery would be built in an industrial park in McBain. Officials said a nearby cogeneration electric plan and rail service tipped the search in McBain's favor. The plant is supposed to be operating by 2008, employ 40 full-time workers and produce around 50 million gallons of ethanol per year. Filer Township in Manistee County is reviewing plans for an ethanol plant by Traverse City-based North Star LLC at a former industrial site on Manistee Lake. Township officials said they recently granted preliminary approval for the operation, where construction is supposed to begin in June of 2008. New banks saturate the TC regionTwo Emmet County-based banks moved in to downtown Traverse City in late 2006, including First Community Bank of Harbor Springs and the Bank of Northern Michigan from Petoskey. Those entries leave Grand Traverse County with 13 different banks operating 38 separate branches, according to the Federal Deposit Insurance Corp., not including other mortgage banks and area credit unions. Mark Eckhoff, who took over this year as president of Fifth Third Bank's northern Michigan operations, suspects the region's continued growth, compared to other parts of the state, is spurring the region's new financial activity. "We're one of the markets that continually grows every year when others don't,” Eckhoff said. "I think Grand Traverse County jumps off the page in northern Michigan as a spot that's still growing.” Time will tell whether the region has too many banks for the community to support, he said. "It certainly makes the marketplace more competitive,” he said. [an error occurred while processing this directive] |
