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Crain’s Grand Rapids Business Brief - 01-03-24

Crain's Grand Rapids Business

WGVU’s Patrick Center talks with Crain’s senior writer Mark Sanchez about Grand Rapids’ proposed professional soccer stadium and what the economy may hold for the state and West Michigan as we head into 2024

Mark Sanchez: Clearly when people look at their own homes and their own businesses, you know, what's the economy going to do? This is the single biggest thing on the minds of a lot of folks. And we talk about, is it going to accelerate? Are we going to have a recession? Is inflation going to get more into control? Are interest rates going to go down? And how's this all going to affect my business, my business planning? So, in our latest edition, in some of the stories we posted last week, we kind of take a good look, again, talk to a lot of folks and try to read the tea leaves and what's going to happen in 2024. And one of the stories was, boy, outlooks for the state and the U.S. economies. Bottom line, slower growth. But a lot of folks are pulling back on that idea that we may have a recession in 2024, whether mid-year, latter half of the year. Right now, the University of Michigan and its latest outlook, 1.7% real GDP for 2024. The federal reserve just before Christmas, week or so, when they decided to hold the line on interest rates and not raise rates again, signaled that rates could come down again in 2024. Its outlook was 1.4% GDP for the U.S. in 2024. And that's really, those are really in line with a lot of what you're seeing out there. Kind of mid 1% range for real GDP. But on the real positive note, and obviously that's slower growth than what we've been experiencing, but on the positive side, inflation looks to be getting into control. The Fed wants it at that 2% range long term. And some of the data just before Christmas for November was about a 2.6% annualized rate. So, a lot of the outlooks and a lot of the folks we talked to for this edition saying, expect interest rates by mid-year to start coming down. How far? We'll see. Some of the outlook said expect three quarter point reductions in the latter half of 2024. So, there's some good news. The other good news is this high inflation that we've been dealing with for a year and a half, two years, that's moderating and getting tempered. And the outlooks as well say inflation, Consumer Price Index, that's getting into control. So, expect that to continue to moderate and get closer to that 2% range. And that of course will allow the Fed, give the Fed some room to start working on interest rates and bringing those down.


Patrick Center: So much of this depends on some of the geopolitical issues that are taking place around the world. We have a number of conflicts and there is of course the health of China's economy that plays into all of this.


Mark Sanchez: Yeah. All this is, you know, we are part of a global economy. Uh, what's going on in the middle East, Ukraine, the issues with China's economy. These are all issues that could affect how the U.S. goes. These are events that you keep in mind, maybe not necessarily planned for, but. Keep in mind these could affect the trajectory of things in 2024. But right now things look okay. Again, slower growth, but still growth. So that'll translate down. Also, uh, you know, we talk about on the state level, there's still some growth ahead for the state in terms of job growth, not as much as the last couple of years. Again, those outlooks are tempered somewhat. U of M’s, it expects 7% job growth for 2024. That’s about half of what was estimated for 2023. There's an outlook also from Comerica a couple weeks ago that take kind of the same track. You know, slower job growth, about 1.4% state GDP next year. So, you know, not bad, not great, but still in positive territory.


Patrick Center: Have you been evaluating any of the local forecasts for west and southwest Michigan?


Mark Sanchez: Well, there was the Right Place event a few weeks back and they had good things to say that West Michigan's in good shape. It's doing better than the rest of the state. Total employment should grow about 1% for the Grand Rapids area in 2024. While the Upjohn Institute out of Kalamazoo predicts little less for the statewide growth numbers. So locally, we're in pretty good shape here in the Grand Rapids area.


Patrick Center: There are a couple of proposed marquee projects that we are aware of. There's the amphitheater along the Grand River. And then also on the West Bank, the near west side of the city, close to the banks of the river, closer to the highway, US-131, is a proposed soccer stadium. What are you hearing about these projects in 2024?


Mark Sanchez: Well, as a lot of folks have reported here in the last few weeks, Grand Action 2.0 has been looking at sites and it's really now zeroed in and doing the due diligence on that site just alongside the freeway. The Big Boy closed here a couple of weeks ago. That's been owned by the DeVos family and Grand Action is now looking specifically at that site for the stadium. That's the site in behind the big boy. The now closed big boy. It's a Dash lot. So, folks will have to find another place to park. But that's the site that Grand Action 2.0 is zero in on. It's going to do the due diligence and you could see more movement certainly on that project here in 2024.


Patrick Center: There are some funding issues there. The county has already said that it will not release any funds, at least not at this point, to finance the stadium. So, I guess the question is where are some of these dollars coming from to make this happen?


Mark Sanchez: You know, that is the big question. There's some public money. County's got its decision it's made. And, you know, Grand Action is a group that has a history of going out and appealing to those large benefactors for good, public projects that we've seen. This is the group that built Van Andel Arena 30 years ago. It helped get the medical school to come to Grand Rapids with Michigan State University and helped raise a lot of money to pull off that project. So, you're going to see some public money. You're going to see probably quite a bit of private philanthropy as well, of folks who, you know, you recognize all the names probably when they come forward. But there's a history there of folks stepping up and making these contributions to pull off these major projects in Grand Rapids.


Patrick Center: There's kind of a chicken and egg situation here, which is you need the stadium before you can have an ownership group, but behind the scenes there has to be an ownership group that is coming together?


Mark Sanchez: I have no doubt that there is. You know, and this is the big puzzle. This is a big broad puzzle that's coming together and it's piece by piece by piece that gets put together. These don't happen overnight. They don't happen quickly. But this is a project that's been worked on for a couple of years, and we are seeing some steady progress now. Again, they've zeroed in on a site. They're going to do due diligence on that specific site. And my guess is when they do indeed make that a final decision to build at that property, you'll see some more question answered in the not too distant future after that about funding, both private and public sector funding.

Patrick joined WGVU Public Media in December, 2008 after eight years of investigative reporting at Grand Rapids' WOOD-TV8 and three years at WYTV News Channel 33 in Youngstown, Ohio. As News and Public Affairs Director, Patrick manages our daily radio news operation and public interest television programming. An award-winning reporter, Patrick has won multiple Michigan Associated Press Best Reporter/Anchor awards and is a three-time Academy of Television Arts & Sciences EMMY Award winner with 14 nominations.
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