CEO Podcast: Phil Santer, Ann Arbor SPARK

Paul Krutko: Welcome to Ann Arbor SPARK’s CEO Podcast…Conversations on Economic Opportunity. My name is Paul Krutko, and I’m the President and CEO of Ann Arbor SPARK.

Today, I’m joined by someone many in our community may already know — Phil Santer, Senior Vice President and Chief of Staff at Ann Arbor SPARK. As part of our ongoing effort to give listeners a deeper understanding of what SPARK does and how we collaborate with our partners, I wanted to bring Phil on to share insight into the work of our Business Development team — the group he leads here at SPARK.

That team plays a central role in supporting companies looking to grow in Washtenaw County — from site selection and incentive coordination to helping businesses tap into local talent and build strong connections within our regional ecosystem.

Phil brings more than 15 years of experience in economic development, including roles at the Michigan Economic Development Corporation and a policy research center at George Mason University. A graduate of MSU’s James Madison College with an MBA from Wayne State, he’s also a certified Economic Development Finance Professional and serves on the boards of Lake Trust Credit Union, Michigan Works! Southeast, and Destination Ann Arbor.

So Phil, you’re the first one in a series here that we want to bring to the audience with the leaders of our various divisions. And so we’re really pleased that you have the ability to do this today. 

So let’s start with the big picture. How does SPARK’s business development team define success, and how does that tie into our strategic plan and mission of driving smart economic growth in service of prosperity for all?

Phil Santer: Well, thank you Paul. I appreciate the chance to be here in the inaugural conversation for sharing a little bit more about what we all do as an organization. I think based on how we define success as a team in our section of the world, I think it really depends on, we define a lot of success in a lot of different ways, and I think about it from the perspective of our stakeholders that we’re working to engage with. So, that could be anywhere from companies that we’re trying to attract and grow, and certainly we track things like how many of those projects we’re working on, what’s the impact that they have on the community in terms of their job creation or investment? But I think we’ve worked, really over the past several years, to try to expand out what our definition of success is and also include community factors also include what is important to our communities that we may be partnering with, and also what are going to drive economic success for Ann Arbor or Michigan more broadly. So how can we try and lean towards addressing some of those root causes that we may face as a community that could lead towards greater economic growth or success? So it’s a huge variety of factors that we take a look at.

Paul: Because there are lots of things that affect a company’s choice beyond whether or not the site is the correct site and whether or not there’s some financial support for them — talent and other quality of life and other things and issues like that. Very true. So you and the team focus on key sectors like mobility, cybersecurity, and life sciences, but also emphasize sustainability and R&D. What’s behind that focus, and how are those priorities evolving?

Phil: Well, if you just look at the metrics overall, Washtenaw County, Ann Arbor region more broadly, we’re sort of an ‘Eds and Meds’ town. So there’s a lot of people that work in the education sector. There’s a lot of people that work in the medical sector, but if you dive a little deeper into what are the various industries that are making key impacts from a private sector perspective, they include some of the ones that you had just sort of mentioned. And a few years ago, we went through and looked at and tried to identify what’s a key driver for a reason that a company may want to locate in Ann Arbor or be able to expand. And we ultimately came up with the idea that there’s really two factors that could focus on that. One would be a focus around sustainability and environmental sustainability. We think that’s an area that we could lean into and try and ensure that Ann Arbor is seen as a place that’s going to be very forward-thinking and leaning on the idea of environmental sustainability.

And the other core element was really related to, ultimately, research and development. So we know from our experience that companies want to be close to the academic talents that we have, not only from a student perspective, but also from the institutions and faculty that they can tie into as it relates to their work and create a really strong pipeline. So we want to be the research and development partner for companies that are looking to invest in that particular area. We think we have a really strong message to share with the world around that. And so when we’re thinking about the work that we try to do, sure we think about some of those various industries that you had mentioned, but functionally, we also think about it from an R&D perspective.

Paul: In doing that, SPARK offers a full suite of services, market entry strategy, turnkey project support, talent solutions, and more. How do we tailor those offerings to companies depending on where they are in their growth journey?

Phil: Well, in a simple way, we ask them, but I think in a more complicated way, it’s really trying to understand and meet the needs of the company or organization that we’re trying to work with at any given time. So it involves usually an identification of what their needs are, usually through a process of being very curious around what their opportunities are and really trying to understand what it is that they need. And sure, there’s a suite of things that we can often bring to the table. And I like to say that the best economic developers know everything and know everyone, which is a very high bar to achieve. But it really ties into this particular side of the work that we’re doing, where we’re sitting down with companies, and this is one area that I don’t think everyone fully understands. Companies are extremely dynamic organizations and things they are trying to achieve, fairly difficult things in economic circumstances and environments that are moving, changing, adjusting at any given time. And for them to be successful, they have a variety of things that they have to think through. So for our perspective, we have to really distill down what it is are the key needs that they have at any given time, and are there people or things that we can put in place or make them aware of that will help them be able to grow and scale and be successful in Ann Arbor. So there is more of a process laid out to that, but at a high level, that’s really what we’re trying to do.

Paul: Yeah, I think one of the things to share with the audience, and an analogy I use sometimes, is that we play a translation role where many times the businesses may, this may be the first time they do a project of scale or they may be a company that’s got facilities all over the world. What we do is help them understand our marketplace and for those that this may be their first effort at this, sort of the whole process of bringing something out of the ground. So we have to speak a number of languages, and I use that translation analogy where many times we can interpret what the permitting process is for them or interpret for them what they’re actually asking for, because sometimes that’s not always very, very clear. 

I also think what’s important about a team like yours and yourself is we have to really be generalists in nature, but then for a particular opportunity, we have to become almost an expert in it. I’m thinking about your work right now with data centers. Several years ago, that wasn’t on anybody’s horizon, but now it’s a big issue in terms of the needs of companies to process large amounts of data. And so we have to become almost an expert in what it means to locate a data center.

Phil: You’re right, it means that every day, every week looks fairly different compared to what we may have been doing in the past. And so we have to be open to that and have to be open to continual learning. But I just want to pull on a thread of something that you had mentioned before, which is that I think oftentimes when we’re playing some of that translational role, what I found in my experience is that in certain cases, the public side of the coin doesn’t always understand what’s going on on the business side of the coin and vice versa is true. It is unclear sometimes, I think, to the business community, what the public sector is trying to do, we’re trying to achieve. And even though we could all be speaking the same language, there’s some assumptions or misunderstandings that can be a part of that process. So that’s one of the best things I like about economic development and about the work that we do, is that we get to play that universal translator role and bring people to the table and convene them from fairly disparate areas of our community or our world, and then try and achieve some common practice. And you’re right, most of that work right now seems to be around data centers, but it depends on what the need is at any given time.

Paul: But to share with the audience, at the moment where data centers are really a hot sort of development opportunity, at the same time you and the team are working on a meat processing facility in Manchester. And so I am trying to just share with the audience that we have a wide variety of types of businesses that we might touch. 

Well, continuing on a little bit, since 2012, SPARK has supported 387 growth projects resulting in more than $1.82 billion in investment and 32,500 new and retained jobs. What are some of the key ingredients that you think make the region competitive for those kinds of wins? I think you mentioned the university as one, but what are some of the other things that are important?

Phil: There are a lot of reasons that I think the region is successful, but I think there’s a lot of dynamism at the heart of being a university region or a university town in a lot of ways. And we like to say that our community hits above its weight class in a lot of different areas. We’re a city in a community and a county of a certain size, but we have amenities and the ability to do things that I think is greater than what it may seem at first glance. And it was interesting, I was chatting with someone the other day about this idea of “why Ann Arbor,” and he was remarking that when he was doing talent acquisition, he would always go for folks that had spent time in Ann Arbor, either at the University of Michigan, at Eastern Michigan University, or at another part of the community. And the reason why he did that is not because they necessarily went to those institutions, but because he didn’t have to sell them on Ann Arbor, they already sort of got it.

Interestingly, when you talk to people that maybe haven’t been here or haven’t had a chance to engage in the community, and they sort of have an assumption around, oh, it’s that college town. But then there is a dynamic to the community that you don’t often get a sense of unless you’re here for a period of time, that you really get to understand that dynamism, the cultural amenities that are here, the folks that are doing interesting and compelling work that can be a part of an organization or just a part of your network. And I don’t think that’s always well understood. So I think those are some of the lesser-known success factors.

Paul: Maybe your next slide, I think, shows where those numbers that we just shared, and I think we have another one that kind of just shows where the projects are. And I think that’s an important part of sharing with our audience. We chose at the beginning as an organization to be called Ann Arbor SPARK because many people, as you’ve pointed out, do have knowledge of Ann Arbor, or they only knowledge may be on a particular fall afternoon that they watch a football game and they know that the University of Michigan is there. But as this slide depicts, we are working on projects all over Washtenaw County and clustered around the towns that make up our community and a pretty wide dispersion of that as well. And I think your point to share is that when people think about the community, I just had this experience with some folks from, we were talking to recruiting from Italy, and they were surprised to learn that Toyota’s North American R&D facility is here in Ann Arbor and has thousands of engineers. People don’t ordinarily connect that with the college town as you described it.

Phil: Well, to that point, Paul, I was just going to add, I think part of the things that we work on as a team, some of these projects are large and others of them are relatively small, a handful of folks that might come in. And it’s always been my understanding and experience that when you test the market, you try to see, okay, what’s Ann Arbor all about? I’m Toyota and I have to come here to engage in the EDA, or I’m sorry, the EPA’s facility on Plymouth Road because I want to sell into the United States market. And then over time, you recognize, oh, there’s actually a significant amount of engineering talent that I can tap into here, or I can try and understand more about how I can engage in the automotive cluster here. So we have this long experience of people making small bets on the community that grow into much larger and deeper investments, and that’s something that we want to try and repeat on a regular basis.

Paul: Yeah, that’s absolutely correct. So as the slide is showing that in 2024, we had $111 million in new investments, 19 successful projects. Can you share one or two of those that stand out to you from last year and what it took to land them?

Phil: Sure. Yeah. I mean, you invest a lot of time and effort into some of these projects. And I think what’s interesting to note that the listeners may not know is that the sales cycle and economic development sometimes can be a matter of years. 

One of those was a good example of something that we were able to secure last year, which was a last-mile delivery center for Amazon, which was pretty significant multimillion-dollar investment into the community looking around at other places in the country. It was sort of surprising that we hadn’t seen this kind of investment yet, but we’ve been working on that for several years. And from that, it’s a matter of identifying the opportunity and then figuring out again, where they are in their cycle and what it is that they need, and then how can we apply our network and resources to what was required in order to get that project done. So a lot of introductions and identification of opportunities to tap into the network. So I think that was one that was on our priority list and was interesting. 

Maybe a couple others to point out. We also had, last year, the fifth expansion of Liebherr into the city of Saline. So this is an aerospace company out of Europe, and they had come into Saline in the early 1990s and had built out a business, and they just continued to be a great community partner in Saline and in our community overall. And they continue to expand every few years, which I think is a great indication not only of Liebherr, but also really says a lot about our community overall and how welcoming places like Saline can be. 

And then I was also excited last year that we landed a new headquarters for NorthStar Clean Energy, which was a, I think ties directly into the work that we’re trying to build out as a sustainable community. And this is an organization that works with other organizations as they’re trying to identify how they can be as carbon-neutral as possible. And we were happy to welcome their headquarters into our community, and I think they wanted to be a part of the ecosystem that we’re building here. So those are, I think some good examples of what we do sort of well as a community, all from last year.

Paul: Yeah, Liebherr is a very interesting one in the sense that if you told someone that flies on a regional jet in the United States who takes care of their landing gear when it needs to be rebuilt, because landing gear has to be rebuilt, it’s Liebherr in Saline that does that. And so it’s a federally certified facility because those parts have to be certified that they are okay by the FAA, that they will work every time. And so it’s just interesting when you drive around a community like Saline and you see that sign, you may wonder what they do there, and that’s a pretty cool operation. 

Well, let’s talk about advocacy. SPARK identified legislative priorities at both the state and federal levels. How does your team engage with polic, and why does it matter to the success of our projects and partners?

Phil: I think it makes a huge difference. I mean, what we’re talking about as it relates to policy is really setting the table of how we’re going to operate as a community. And I think what we’ve realized in the economic development spaces that we need to play an active role in trying to identify what are the key needs that we’re hearing from the companies that we’re working with, and how can we educate the rest of our decision-making process around what some of those important things are. 

So for us, that could be a matter of working through the pendulum, sometimes, of economic development tools that maybe enter and then leave, or there could be changes or tweaks that could be made. So I just think that we’ve recognized over the past several years about how impactful we can be in this process, and also how important it is to be able to have a voice of the companies and communities that we’re working with on these particular issues.

Paul: And it’s really important in the context that if you think about Michigan, the regions are very, very different. So one of the roles that we play is communicating to the state about what our specific needs are and how those might be appropriate to be done in other parts of the state or highly targeted to us. So it’s really bringing our voice of our community in a very substantive way to the legislature and to the governor.

Phil: Well, I want to tie in that particular piece because I think it ties into something that actually Toyota is known for. So the Toyota way of manufacturing, they have this phrase of ‘go and see.’ And what I think is interesting about when you’re talking about public policy decisions that are being made, I don’t think oftentimes public policies are going and seeing how those things are being impacted or what’s actually happening in those communities. And I think we serve from a regional or from a local perspective, that kind of effort, we’re seeing the impact of how those tools are or are not being implemented and can give that feedback up; we’re sort of the boots on the ground as it relates to a lot of those decisions.

Paul: On the list here that we’ve been working on for quite some time is the Good Jobs for Michigan program. When that was in place, we were able to attract a very significant investment from a hard tech company, KLA, who essentially created a second headquarters here with hundreds of jobs and millions of dollars of investment in a very attractive, environmentally sensitive building, located just on the other side of US-23. 

So we do the same thing on the federal side. And so from your perspective, why are programs that made me think are kind of distant, but why is the Community Development Block Grant, and I mean much in the news now, NIH funding so important, why are they so critical to our local economy?

Phil: I think these have been, they’re sort of baked into what we’re trying to do as a community and the way that these can be directed and impacted. And so when you think about something like the Community Development Block Grant program, this is funding allocation that is going through our county, through Washtenaw County and being allocated to our community partners so that they can work on housing issues or they can work on infrastructure issues. And it’s one of those things where, yeah, it’s not thought about all that much because you sort of take it for granted. And when we find ourselves in a moment where the question is, well, should I take these things for granted? And the answer is of course, no, you shouldn’t take it for granted because these things have really significant impacts. And sure, there’s a ton of work that has to be done in order to improve where we are from a housing availability standpoint or from a wage growth standpoint, but you can’t sort of pull the rug out from the things that are already doing that kind of work.

And I think about that from CDBG, I think about that from NIH funding, which has been really the backbone around the entire research enterprise and research economy that we have in our community. So when there’s considerations that might adjust or change that or take it away, I think that’s a really important thing for us to note and to advocate for as an economic development perspective because I think a lot closer to seeing the impact of some of these programs than maybe the average person that’s out there who frankly haven’t had to think about these things. So it’s important for us to raise this as a flag to say, Hey, these are important elements, these are important investments because they’ve made our communities what they are today and are going to allow us to be able to improve them going forward.

Paul: Just to put a little fine point on that, when we talk about research funding, sometimes it’s hard for people to think, well, what are they doing in the labs? What does it mean to me? But the screens on all of our phones, the OLED technology was developed by a researcher here at the University of Michigan. Flo Mist is another example in sort of the therapeutics place. But most recently, you and I both went, with a lot of pride, and the university had a lot of pride, in a company called HistoSonics, which it took 10 years out of the research lab to get to the point. And it is a hard technology device that uses sound waves to dissolve, at this point, the liver tumors. So when you think about, well, should we spend money on research to help them develop that kind of technology versus someone who walks into a treatment room and a few hours later leaves without a tumor in their liver, you kind of get the connection. 

So we often talk about that We work beyond Ann Arbor’s core, and I mentioned earlier we define the name of the organization at the beginning because we wanted to play off the known brand, but we also spent some time with our local partners and identified some tools that they think are important that we could put some advocacy effort behind. And those are on the screen right now. So maybe you got any comments about these?

Phil: Yeah, I think this sort of applies similar to what I was saying before when we were talking about the ‘go and see’ element of state policymaking. And I think this applies when we’re trying to engage from our local partners as well. So if we’re working with a community like Dexter that has a particular set of market dynamics that are going to be different than, say, the housing stock or development opportunities that are in a Grand Rapids or a Detroit or a Lansing, there’s a voice that I think they need to have at this overall process of saying, Hey, let’s have some nuance as it relates to the housing that we’re trying to develop as a community, or here are the particular needs that we have from developers that might be trying to increase the housing stock here. And I think we just need to make sure that we’re being mindful that the way that these policies get in place are going to be impactful in all of the communities that they want.

And similarly, as it relates to the economic development toolbox in Michigan, if we’re looking at things like the idea of a core community, which is this ability to have certain economic development tools be applied in certain communities, but not necessarily in other communities. At this point, that policy was put in place at the turn of the century, and we find ourselves 25 years later with that same policy, yet our communities have continued to age during that period of time. It might be worth considering, how do we try and ensure that some of these economic development tools like the Obsolete Property Rehabilitation Act, or Oprah, as we like to say in the biz, are available to all of our communities and not just some of them? So it is sort of defining and making sure that the needs of the communities at the moment that we find ourselves in are understood by our local decision makers. And so this is an example of that.

Paul: And I think the part that we’re playing in this is it’s sometimes difficult for some of the smaller jurisdictions to be able to have a voice. And our role as a regional organization is we can help amplify their voice by bringing that forward with our ability to communicate on a large scale. Well, so the final slide in your presentation visualizes the full ecosystem, successful businesses, community investment, talent, and quality of life. Why is it so important for economic development to stay connected to all of these pieces?

Phil: Well, this really, I think just demonstrates the entire process that we’re trying to undergo here. So we’re trying to have successful businesses by removing the barriers that they may face so that they are able to do what they’re setting out to achieve, which is create wealth, employ people, and therefore let other people serve the economy that they’re sort of functioning, pay taxes that allow communities to invest in public works that they want. And yeah, part of that is being able to engage in the economic development process that we have sort of this virtuous cycle that we sort of roll through. So when you think about the stakeholders as economic developers, all of the component parts of this, the community, the business community, all the different elements that you see as part of this slide, for those of you looking at this on the screen, we need to be engaged in and a participant in so that we can understand what those needs are, remove the barrier if it is such, and then be able to allow companies to, we supporter want to get out of the way so that companies can be successful and go and do what they need to do so that they can continue to pay taxes and invest in the community and have a great place to do business and live.

So I think this is just sort of an idea of how this virtuous cycle works through. But at the end of the day, I think that’s sort of the important role that we play from an economic development perspective.

Paul: And I think one of the things that we often talk about when we speak to this particular graphic is that communities, people in the communities understand when this cycle gets broken, that in the history of this community, it’s now seems like in the distance past some 20 years ago, but when Pfizer left Ann Arbor, this virtuous cycle got broken. Taxes weren’t paid, people were no longer employed, and that meant there were less resources for the things like parks and public safety and philanthropy and other things like that. So what we often talk about is you need to keep the positive virtuous cycle going because when it’s not working, there are a whole set of deleterious effects on the community as whole. 

So okay, finally, as we close out, what’s something about SPARK’s business development work that you think more people should understand or appreciate?

Phil: I sometimes joke when folks ask, what is it that you do? And I say, well, do you have four and a half minutes that I can try and explain to you what it is, all the nuance of what we’re trying to work through. And of course, no one ever has that kind of patience in order to do it. So I think what’s one thing, I wish that they understood more about the work that we do? I guess it’s just like the work in and of itself, because to your point from earlier, it’s so broad in terms of the areas that we get to get involved in, whether or not that’s working on a particular investment opportunity, trying to help move the needle on availability of child care, trying to engage in other projects or opportunities that we think could move our community to the next level. And so you have this broad perspective across a variety of different things, but also having to get extraordinarily deep on certain particular efforts or areas or issue areas. I guess it would be easier, maybe if nothing else, when I’m at a cocktail party and I explain to people what it is that I do, that they would know more about what that work. But that seems like a minor gripe in the grand scheme of things.

Paul: Yeah, I guess one thing I would share with folks is that those of us who do this, and there are many economic development professionals hard at work all over over the country, is it can be frustrating work from time to time, but at the end of it, it’s very gratifying work, because what you see when a company makes a decision to expand or locate here, that’s changing families’ lives. I mean, people get employed, they can plan their future. So to some extent, I find it to be kind of a very, maybe this sounds grandiose, but kind of a noble profession because you’re really affecting communities and affecting individual families. And so I’ve enjoyed it over my caree, and I know you have during yours.

Phil: I just want to give a moment of that. I think you mentioned the KLA project. I think one of the more gratifying things in my career has been not only the ability to work with KLA and the organization on their project in Ann Arbor, but maybe even more so is when I might be passing by a billboard on US-23 for career opportunities at KLA, because they did a phenomenal job of doing their outreach for their talent acquisition. But that, to your point, that’s connecting someone to their next career step in our community. And so I agree that’s very gratifying to have those kinds of moments to be able to see where that connection could be made.

Paul: Well, great. I appreciate you taking the time to do this with me. This was my idea that I wanted to share with the audience a little more in depth about what we do so they can look forward in the future. We’re going to talk about entrepreneurial services, we’re going to talk about our investment arm, SPARK Capital, and about our efforts to market and communicate about why this is such a great place, not only to have a business, but also to live and enjoy raising your family. So appreciate it. Thanks a lot, Phil.

Phil: Thank you, Paul. Appreciate being first up.

Paul: And I want to thank our audience for listening and learning more about those leaders and organizations working hard to create the Ann Arbor Region’s economic future. These conversations are brought to you by Ann Arbor SPARK. For more information about Ann Arbor SPARK, you can find us on the web at annarborusa.org. We’re also on Facebook, Instagram, and LinkedIn.