Southwest Michigan First’s Marshall contract: $950,000

• MAEDA signed a $950,000 contract with Southwest Michigan First this month.
• The Kalamazoo private nonprofit will head economic development and will run the visitor’s center.
• The agreement is costlier but includes more services than what the city had with Battle Creek Unlimited.

MARSHALL – Southwest Michigan First will be paid $950,000 over the next two years to head economic development in Marshall under an agreement it signed last week with the city’s Area Economic Development Alliance.

The contract, obtained Wednesday by the Enquirer through a Freedom of Information Act request, outlines services that include retaining current businesses, attracting new employers, staffing the city’s visitor center and small business and downtown development. MAEDA will pay Kalamazoo-based Southwest Michigan First in quarterly payments of $118,750, and the remaining $250,000 in costs will be “an in-kind contribution to cover the lease, utilities and maintenance associated with the physical visitor center/office building for the staff,” according to the contract.

Southwest Michigan First will provide the staff, and MAEDA’s six employees have been told they can apply for the new positions. The contract does not say how many staff members will assigned to Marshall duties.

Marshall City Manager Tom Tarkiewicz and Southwest Michigan First CEO Ron Kitchens signed the document Sept. 3.

“Together MAEDA and Southwest Michigan First Partners, a wholly owned subsidiary company of Southwest Michigan First, bring the collective strength of hundreds of thousands of business and community leaders committed to building and diversifying the Southwest Michigan economy,” the contract says. “The goal of this agreement is to establish regional alignment, focus resources and utilize historical strengths in accordance with the state of Michigan’s regional alignment strategy.”

The contract with Southwest Michigan First is notably costlier than what the city paid Battle Creek Unlimited, although it does include additional services. BCU headed economic development in Marshall through a contract first agreed upon in 1999, overseeing administration and coordination of large commercial projects. It also marketed the area for economic development and represented the city on related legislative issues and other state matters.

In December, the City Council approved a new consulting contract with BCU in which both parties agreed to use services on an as-needed basis. The new agreement, set to expire in November 2015, was made after MAEDA was formed and was set to take over economic development in Marshall.

BCU President and CEO Karl Dehn told the Enquirer last week that his group was not pursuing a long-term contract with Marshall officials.

During the 2012 fiscal year, the city paid BCU $168,500. That’s compared to the $475,000 that will be paid annually to Southwest Michigan First, which represents two-thirds of MAEDA’s annual revenue.

The alliance is projected to receive about $715,000 from its partners and to spend about $712,000 this fiscal year.

MAEDA was formed in early 2013 as a nonprofit partnership between the Marshall Area Chamber of Commerce, the Marshall Downtown Development Authority and Main Street Program, the Marshall Economic Development Corp. and the Local Development Finance Authority. Its first and only CEO John Coulter resigned earlier this year, prompting the group to begin working with Southwest Michigan First for technical support.

After gathering input during a series of public sessions, MAEDA decided to pursue a formal agreement.

In Marshall, Southwest Michigan First will hold small-business networking events and will “develop and support strategies that positively impact the prosperity and vitality of downtown Marshall,” according to the contract. It also will provide administrative and staff support for the visitor center, which city officials have aimed to make a central location for residents and tourists, and will enhance its website and volunteer efforts.

The MAEDA Board of Directors will remain the active contracting body for the agreement. Community event management will be negotiated with the board as a separate line item, and MAEDA will maintain custody, maintenance and liability of all physical property.

The agreement begins Oct. 1 and ends Sept. 30, 2016. Either party may choose to terminate the contract at any time with a 60-day notice.

You can view MAEDA’s contract with Southwest Michigan First here:

MAEDA-SWMF contract

And the city’s most current contract with BCU is available here:

Battle Creek Unlimited and city of Marshall agreement

Call Jennifer Bowman at 966-0589. Follow her on Twitter: @jenn_bowman

By the numbers

The Marshall Area Economic Development Alliance received some $650,000 in revenue during the 2014 fiscal year, according to the city’s budget. That number is expected to increase for the current 2015 fiscal year.

MAEDA will pay Southwest Michigan First $475,000 annually — in quarterly payments — for economic development services.