Lansing’s status as state capital comes with great economic power

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The Michigan State Capitol, the most distinguishable feature of government in Lansing.

The Michigan State Capitol, the most distinguishable feature of government in Lansing.

By Isaac Constans
Listen Up, Lansing Staff Reporter

Being the state capital means that Lansing is home to Michigan’s highest-ranking officials and is the source for legislation in Michigan. But governmental action is not contained to under the dome; government employees work throughout the city and their employment has an impact that can be felt throughout Lansing.

The presence of the capitol also encourages many different state-wide businesses to settle their headquarters in Lansing, according to Keith Lambert, a tri-county development manager for the Lansing Economic Area Partnership (LEAP).

“I think it has a huge impact on Lansing in general,” Lambert said. “Because we are the capital city of the state Michigan, we see a lot of businesses that are advocacy-oriented. We have a lot of lobbying firms and law firms that have access to legislators right out their back door essentially.”

The city of Lansing is laid out around the Capitol.

The city of Lansing is laid out around the Capitol.

Insurance companies, too, relish the opportunity to directly connect to state legislators, according to Lambert. That is why organizations such as Delta Dental, Jackson National, and Auto-Owners Insurance Co. have all chosen to invest in prime real estate in Lansing.

Without the political connections, the presence of such business centers in Lansing would be up for question. According to Valerie Marvin, president of the Historical Society of Greater Lansing, if the small Lansing township, at that time, with eight voters had not been named the capital in 1847, the city of Lansing would be dramatically different today, assuming it survived that long.

“I would argue that the very existence of Lansing as a city the size it is is due to the fact that it is the capital,” Marvin said. “People instantly started moving here once it was named the capital because they knew that the city would grow. The first year the legislators met here, the stories are that they actually slept in the capitol building because there were not enough places for them to stay.”

Lansing’s political prowess is still important for those who wish to visit the city for whatever reason, as well. Dr. Don Holecek, a professor emeritus at Michigan State University who has extensively covered the Michigan tourism industry, said that it’s the place to go for those who wish to get in contact with or send a message to government officials.

“The thing is a lot of people come in to testify and to participate in demonstrations,” Holecek said. “I think the best way to describe it is it just adds to the ‘drawing power,’ because there are so many things involved in government activity that draw people to the state capital.”

Stained glass of the Lansing Center overlooking the Grand River.

Stained glass of the Lansing Center overlooking the Grand River.

One person that knows the direct economic impact and allure of the capitol and government is Kent Lenzen, the director of sales for the Lansing Center. Inside of the Lansing Center resides “The Governor’s Room,” a popular space for legislative receptions with the illuminated capitol building glowing across the river through the window, prominently flaunting the city’s most popular attraction.

“We do a lot with the government,” Lenzen said. “Most of these organizations, state-wide organizations, are involved in a lot of political work with the government so they like to come here.”

Nowadays, however, the need for a central capital has been mitigated by the invention of the Internet. People no longer have to make treks from their far away homes to the capitol for small tasks, but fortunately for Lansing, tourism remains because of the city’s placement.

“It just becomes a point of central contact in the state,” Holecek said about Lansing, including that the government role was no longer the only draw. “The drawing power is very high… it’s probably the population-centric point in the state.”

It all ties back to the government-based economy, though, for Lansing. According to Holecek, no matter where you go, family and friends are always the biggest attractions. The staunch employment rates from the government indirectly translate into tourism revenues for the city.

The state of Michigan employs more people in the Lansing community than any other employer with 14,249 employees, per LEAP. This figure even eclipses the total provided by Michigan State University to the Lansing community, who employs 11,100 people. Lansing as a result benefits from all of the roots and connections people have to the city.

“We definitely get a lot of friends and families that come to the (Greater Lansing) Convention and Visitors Bureau to see what there is to do here,” Brendan Dwyer, manager of marketing communications for the Greater Lansing Convention and Visitors Bureau, said.

Lansing's largest employers, as per numbers provided by LEAP.

Lansing’s largest employers, as per numbers provided by LEAP.

The Greater Lansing Convention and Visitors Bureau is funded by taxes and a special hotel tax when people spend the night. While the bureau competes against friends and families for the sleeping arrangements of relatives, the competition is welcome because of  the direct economic input into the community.

“Even if you’re not staying in a hotel, we still offer assistance to all visitors to the region no matter where they’re staying,” Dwyer said. “Obviously, we hope they stay in a hotel, but even if they’re not, that’s fine because they’re still patronizing local businesses. Even if they just fill up a tank of gas or buy a pack of cigarettes, they’re still paying taxes that aren’t coming out of the residents’ pocket.”

According to Holecek, that figuring is correct. When a large employer exists in a region, it automatically and immediately adds to the tourism business and boosts the local economy.

“Visiting friends and relatives is always the biggest reason for visiting an area,” Holecek said, although allowing for exceptions in select situations. “The fact that we have a population base that involves state government employees, that contribution will be significant to Lansing.”

In Lansing, like most places, visiting friends and family supersedes even the direct tourism impact of landmarks like the state capitol. According to Holecek, nobody would feel the hypothetical subtraction of capital-status more than the local economy.

“If we didn’t have the state capital, if we didn’t have the employees, then we wouldn’t have the visiting friends and relatives,” Holecek said.

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