Published in Economic Development
State panel approves guidelines for projects seeking assistance from new $1B economic development fund COURTESY PHOTO

State panel approves guidelines for projects seeking assistance from new $1B economic development fund

BY Tuesday, January 11, 2022 12:41pm

LANSING — State economic development officials have approved criteria for corporations to meet when seeking assistance from a new $1 billion fund created last month to lure major projects to Michigan.

The guidelines were unanimously approved today by the Michigan Strategic Fund Board. They include performance standards and milestones for two new programs to support what Michigan Economic Development Corp. CEO Quentin Messer Jr. called “highly competitive” and “transformational” projects involving billions of dollars in investments and promises to create thousands of good-paying jobs.

“Taken together, these programs will be absolutely vital for assuring both new companies considering Michigan and our current in-state businesses need not look to invest anywhere in North America but right here in Michigan as they look to grow and expand,” Messer said.

Today’s action begins implementing a law that state legislators passed and Gov. Gretchen Whitmer signed in December creating the Strategic Outreach and Attraction Reserve Fund. The fund will support major projects such as a Lansing-area electric vehicle battery plant that General Motors is considering.

The legislative action followed Ford Motor Co.’s announcement in September that it would join partner SK Innovation Co. to invest $11.4 billion and create 11,000 jobs in Tennessee and Kentucky to build facilities that manufacture both electric vehicles and batteries.

Written to make Michigan more competitive with other states in pursuing major projects, the law gave the MIchigan Strategic Fund Board authority to decide whether a project receives state assistance. State funding for individual projects is subject to legislative approval at the state budget director’s request.

Messer declined to speculate on how soon corporations may come forward to seek assistance for a project, although the MEDC will accept applications for major projects that meet specifications “as soon as possible.” He also declined to discuss potential projects such as GM’s, other than to say the MEDC has a “robust pipeline” of prospects.

“We are hopeful that there will be requests yesterday because Michiganders deserve the opportunity to have great opportunities. Our small businesses deserve opportunities to have increased clients,” Messer said. “We are working hard, but I don’t want to speculate. We have a robust pipeline, and so I am very optimistic. We want to make sure when they happen, we are ready.”

In testimony last month to a state House committee, Messer said the state has 11 projects in the pipeline that represent more than $74 billion in capital investments and more than 27,000 direct jobs.

Two new programs

Two new programs approved today that the Strategic Outreach and Attraction Reserve Fund will support financially — the Critical Industry Program and the Strategic Site Readiness Program — will back proposed developments.

The Critical Industry Program will “allow Michigan to make game-changing investments to businesses, (which is) critical to closing deals and creating and preserving qualified jobs in the state while generating significant capital investment,” according to an MEDC staff memo to Strategic Fund Board members.

The Strategic Site Readiness Program will help to prepare sites for major developments by providing “grants, loans, and other economic assistance for the purpose of creating investment-ready sites to attract and promote investment in this state,” according to the MEDC. “Funding under this program may be used to provide an incentive to support business expansion opportunities or development of sites to attract future, not identified projects.”

The Strategic Site Readiness Program will fund work on two types of projects: Public or privately owned strategic sites for manufacturing or commercial use, and “mega strategic” sites “specifically tied for large industrial use,” said Josh Hundt, executive vice president and chief development officer at the MEDC.

“The recognition of having both of these types of sites is important because this is not only important to make sure Michigan has large mega sites available for economic development, but we also must have sites for the continued build out of the supply chain and other types of commercial uses in Michigan as we build a long-term economy,” Hundt said.

The criteria adopted by the Michigan Strategic Fund today for the new programs are the same that the MEDC uses when awarding incentives to companies, Messer said.

The criteria include clawback provisions requiring a corporation to repay the state if it fails to meet performance targets. Among the criteria are the jobs created that result from a technological shift in product or production “that moves Michigan’s economy forward and continues to build our state toward a continuing and growing state in terms of economic opportunity in Michigan,” Hundt said.

Other criteria include the importance of a project to a community or whether it will “act as a catalyst for additional revitalization, local financial and community support, the reuse of vacant or historic buildings, and the overall return on investment to the state.

Read 1370 times