Published in Breaking News

SpartanNash scales back job creation target needed to secure performance-based state grant

BY Tuesday, July 24, 2018 11:53am

BYRON CENTER — SpartanNash Co. will not meet the original employment projections included in a 2013 state incentive package.

Citing a lack of available workers, the grocery distributor and retailer said that it was unable to hit the 372 new job creation milestone at its Byron Township facility, a target agreed to as part of a deal that secured a $2.75 million performance-based grant commitment from the state.

The former Spartan Stores sought the incentives for an $18.3 million capital investment in November 2013 as it was completing its acquisition of Minnesota-based Nash Finch, which ultimately created SpartanNash (Nasdaq: SPTN), according to a briefing memo from the Michigan Economic Development Corp.

However, many of the company’s Minnesota personnel opted not to transfer to West Michigan, where low unemployment levels led to struggles in finding workers, according to the memo. As a result, SpartanNash only created 147 jobs as part of the project.

Given those struggles, the Michigan Strategic Fund board agreed to eliminate three of the seven hiring milestones that were part of the initial agreement. Additionally, the board agreed to allow two of the company’s other facilities in Wyoming and Byron Center to count toward employment figures in the 2013 agreement.

As a result of the amendments, SpartanNash’s incentives were capped at roughly $1.8 million, which it had already received.

A SpartanNash spokesperson did not immediately respond to a request for comment for this report.

Because the grant was performance-based and dependent on the company meeting certain hiring benchmarks, SpartanNash won’t have to pay back any funds as part of the amended agreement, Otie McKinley, a spokesperson for the MEDC, said in an email to MiBiz.

“Performance-based grants and performance-based loans have award distributions based on predetermined milestones,” McKinley said. “Performance-based incentives are designed to hold companies accountable for their commitments to the state. As milestones are met, a percentage of the funds are distributed.”

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