$3B planned in new construction reflects Greater Lansing's growing economic diversity

Madison O'Connor | Lansing State Journal

Show Caption Hide Caption 3 projects to watch in downtown East Lansing Here are three projects that are reshaping downtown East Lansing.

In Lansing’s “old economic model,” jobs in the mid-Michigan region were concentrated in three areas: state of Michigan employees, Michigan State University employees and General Motors employees.

But during the last decade, the Greater Lansing Area has expanded its range of industry and job development, leading to the region’s economic diversity.

“Today, our local economy might be the most diverse local economy in Michigan,” said Bob Trezise, President and CEO of Lansing Economic Area Partnership, an economic development organization in Lansing. “There are 20 pieces of the pie now, not three, which is really important for economic growth and stability.”

It’s a shift that started 10 to 15 years ago, Trezise said, when the state's already slowing economy required the region to embrace entrepreneurship and innovation.

And now, the area’s development shows no signs of slowing down.

Indeed, total construction in the region will be in the $3 billion range over the next 18 to 24 months, Tresize said.

More: These people are transforming Greater Lansing's development and construction industries

“(It) is a big number for any community, but it’s certainly historic for the Lansing region,” Trezise said. “What we’re hearing from many developers is the typical tier-one markets are kind of over-saturated with growth right now. So developers are looking at the best tier-two markets right now.”

The diversification of mid-Michigan's economy means many different types of industries have become stakeholders in the region’s development.

“We’ve been on an extremely positive trajectory with economic growth for the last decade here in our region,” said Tim Daman, President and CEO of the Lansing Regional Chamber of Commerce, which promotes the interests of Lansing's business community. “It’s new growth now, it’s diversification.”

Insurance, health industries play a big role in region's development

One large area is the insurance industry. The mid-Michigan region is home to several Fortune 500 insurance national headquarters. With 10,000 insurance employees in the Greater Lansing Area alone, it’s the unofficial insurance capital in the state of Michigan, Daman said.

“When you look at our insurance and financial services sector, those are the knowledge economy jobs,” Daman said. “Those are professional service jobs that every region in the country is working hard to attract and attain.”

Another influential force is health care, shown by Sparrow Health System’s acquisitions of rural health care locations and McLaren Health Care’s expected $450 million hospital and cancer center on the edge of Michigan State University’s campus.

Particle acceleration is another “piece of the pie.” Just 10 years ago, particle acceleration companies didn’t exist in the area, and now these companies are employing several hundred people, Trezise said.

The economy in the mid-Michigan area also is influenced by the many association organizations housed in the area, entrepreneurial startups and information technology jobs.

Of course, manufacturing is still a big part of the economy, but with advanced technology leading to fewer General Motors jobs now than there once were, even that industry has become more diverse.

“People don’t talk about this a lot, but we have a very significant aerospace industry here,” Trezise said. “We also have a very robust medical device manufacturing industry here. The manufacturing sector is still very vibrant and growing in our region.”

The development of these industries means development of new jobs in the area.

Edythe Hatter-Williams, CEO of Capital Area Michigan Works, a workforce development network for residents and businesses in Eaton, Ingham and Clinton County, said jobs are moving toward the knowledge sector and are becoming dependent on training and education.

“You have to have a skill set to get to those higher wages. Education is important,” Hatter-Williams said. “I’m not saying it has to be a college degree, but definitely a high school diploma or a GED is essential and some kind of post-secondary education.”

Major upcoming developments in the area

These new industry and job developments are reflected in physical development projects.

Companies in the area are expanding their facilities, like Charlotte-based Spartan Motors, which saw a $6.5 million expansion in 2017, and Lansing-based Pratt & Whitney Autoair, which expanded their main operation and campus and is now developing a new facility in Delhi Township, Daman said.

There are several transformational projects in the area, like the $242 million Red Cedar project in Lansing/East Lansing, the $40 million new hotel and urban grocery store project on the 600 block of East Michigan Ave., the $125 million Center City project in downtown East Lansing and others, Daman said.

Other big projects in the area are the Board of Water & Light's $500 million new natural gas power plant in Delta Township to replace the coal-fired Erickson power plant, the $765 million Facility for Rare Isotope Beams on Michigan State University's campus and the $555 million dairy processing operation in St. Johns, Daman said.

Trezise said the multitude of development projects in the Lansing area is partly because property is affordable here, but also because developers are realizing the region's potential.

“People in business and potential investors refer to Lansing like we do Washington. Like the capital, like the legislators, like bills and laws," Trezise said. "And what we’re trying to do is say, hold on, there is a most robust, exploding hot economy that is as interesting and robust and growing as Ann Arbor and Grand Rapids.”

The diversification of the mid-Michigan economy doesn't just have economic impact. Communities across the region are by new developments, too.

New industries and job growth are bringing other businesses to the area, and they're bringing more people as well.

Hatter-Williams said efforts to entice people to come work and live in the Lansing area can be seen through placemaking, the strategy of planning for desirable amenities that draw people to live in a community.

“Growth brings more growth. So I do think it’s important to bring all of those extra things to make a person want to come here and want to stay here," Hatter-Williams said.

As a region, Hatter-Williams said, the surrounding cities need to feel that growth in Lansing is growth for their communities, too.

Local officials believe the development and diversification of industries are preparing Greater Lansing's economy for the future.

“Where we’ve been and where we have taken the region in the last 10 years has built the foundation to really support economic growth through the next 20 to 30 years," Daman said.