MI: General Motors MEGA Amendment Features Automaker’s $1B Investment
16 Dec, 2015
At the final meeting of the year, the Michigan Strategic Fund board focused on continued economic progress in 2016 by approving a range of projects including an amended MEGA agreement with General Motors, several business expansions and community revitalization projects, support for entrepreneurship and two Pure Michigan sponsorship agreements. MSF also made administrative changes aimed at improving efficiencies between the Michigan State Housing Development Authority and the Michigan Economic Development Corporation.
The MSF board also passed unanimously a revised agreement related to the state’s defunct tax credit program with General Motors. That amended agreement includes GM’s plan for a $1 billion capital investment in the state by the end of 2029.
“The range of projects and administrative changes approved today makes Michigan more competitive and positions the state to attract private investment and create more jobs,” said Gov. Rick Snyder. “The revision to the MEGA agreement with GM provides certainty and will help us better manage state budgets for years to come.”
The following is a breakdown of the MSF board’s approvals:
General Motors Global MEGA amendment – The Michigan Strategic Fund approved a revised Global MEGA agreement with General Motors that caps the state’s liability for previously authorized job retention tax credits and provides incentives for GM to make new capital investment in Michigan of $1 billion over the remaining term of the credit. GM will be required to repay a portion of previously issued tax credits if it does not achieve its new projected investment by Dec. 31, 2029. As part of the agreement, the company will provide periodic forecasts of its estimated tax credits to the state to assist the MSF and state of Michigan in budget planning. As of December 2014, GM has retained 32,890 full-time jobs under its MEGA agreement and satisfied its original investment commitment in the state of Michigan.
Invenergy Thermal Development LLC develops, owns and operates power generation and energy storage facilities in North America and Europe. The company has been working with Cliffs Natural Resources, a leading mining and natural resources company, to develop a 280- MW on-site cogeneration facility in the city of Palmer (Marquette County) to power Cliffs’ mining operations. Invenergy plans to build the facility in time to replace the Marquette, WI Presque Isle Power Plant before it closes and is proceeding with initial development of the project. MSF today awarded a $500,000 performance-based grant in transferred funds to be used as funding assistance for the project.
Sakthi Automotive Group USA, Inc. campus expansion – Sakthi Automotive is a division of the Sakthi Group, one of the fastest growing business groups in South India. The company is a major supplier to automotive OEMs of safety critical automotive components including steering knuckles, control arms, brake drums, brake discs, hubs, brake calipers and carriers. MSF today approved a Designated Renaissance Zone for 15 years in the city of Detroit for the Sakthi Automotive campus expansion project. In April 2015, MSF approved the project for a $3.5 million Michigan Business Development Program performance-based grant. The project is expected to generate $31.8 million in private investment and create 350 jobs in the city of Detroit.
Boyne City has been awarded $1 million in Community Development Block Grant funds for the Dilworth Hotel Building Rehabilitation Project in downtown Boyne City. The historic building will be renovated and restored to its historic use as a hotel and restaurant, serving as a catalyst for the downtown and providing needed hotel accommodations. The project will generate a total capital investment of $9.8 million and create 30 jobs. The city of Boyne City is anticipated to make a contribution of $700,000 through the city’s Local Building Redevelopment Incentives Program.
In addition, MSF approved $253,884 in local and school tax capture for the County of Charlevoix Brownfield Redevelopment Authority to alleviate brownfield conditions at the site, including lead and asbestos abatement and interior demolition.
Offsite Lake Drive, L.L.C. plans to redevelop the historic Kingsley Building in the Uptown Corridor Improvement District of the city of Grand Rapids. The project will include a significant overhaul of the building’s interior and exterior, resulting in 41 residential units, live-work space and a multilevel parking deck. The project will generate a total capital investment of more than $11.3 million and create two full-time jobs, resulting in a $1,773,700 Michigan Community Revitalization Program performance-based loan participation. The city of Grand Rapids has approved an Obsolete Property Rehabilitation Act tax abatement valued at $965,892.
In addition, MSF approved $1,648,060 in local and school tax capture for the City of Grand Rapids Brownfield Redevelopment Authority to alleviate brownfield conditions at the site.
University Technology Acceleration and Commercialization Program (UTACP) – MSF approved a one-year extension and $2.3 million in continued funding for two UTACP programs. The UTACP, approved by MSF in 2011, was established to invest in university-business partnerships focused on collaboration, commercialization, economic growth and job creation. The two programs selected for continuation are:
- T3N ($1 million) – A collaboration of seven universities supporting mentors in residence and postdocs towards the commercialization of university projects into licenses and/or startup companies. Since its inception in 2011, the program has created more than 200 jobs, started 38 new companies, attracted more than $28 million in follow-on funding, signed 37 licenses and commercialized several products.
- MCRN ($1.3 million) – A collaboration of six universities supporting the collaboration of small companies with public universities in Michigan. The support includes matching funds for new projects, interns and a research portal. Since 2011, the program has created more than 300 jobs, served more than 300 companies, and attracted more than $56 million in follow-on funding.
MSF also approved the Business Incubator Programs Request for Proposals (RFP) to solicit ideas from high-performance business incubators or accelerators in Michigan to support entrepreneurs in launching and growing start-up technology companies throughout the state.
Proposals must be submitted to the MSF electronically to firstname.lastname@example.org by Friday, Jan. 29, 2016 at 3 p.m. Proposals will not be accepted via U.S. Mail or any other delivery method. Prospective bidders may submit questions regarding the RFP via email by Tuesday, December 29, 2015 at 3 p.m. to email@example.com. The MSF will not respond to questions that are not received by the above date and time. In addition, questions that are phoned, faxed or sent through regular mail will not be accepted. Responses to all qualifying questions will be posted on Tuesday, Jan. 5, 2016 by close of business on the MSF’s website, www.michiganbusiness.org/public-notices-rfps/.
The full RFP will be available later this week at www.michiganbusiness.org/public-notices-rfps/.
Detroit Tigers partnership – Pure Michigan has partnered with the Tigers since 2012 with a focus on attracting new visitors to Michigan by brand integration within Comerica Park. More than 2.7 million fans attended a game at Comerica Park last year, with more than 27 million viewers. MSF approved a three-year partnership with the Detroit Tigers at $325,000 per year. Pure Michigan has partnered with the Tigers since 2012 with a focus on attracting new visitors to Michigan by brand integration within Comerica Park. More than 2.7 million fans attended a game at Comerica Park last year, with more than 27 million viewers.
Pure Michigan 400 2016 sponsorship –Pure Michigan has partnered with Michigan International Speedway to sponsor the Pure Michigan 400 since 2011, with a focus on attracting new visitors to Michigan and showcasing Michigan’s leisure travel assets from car culture and outdoor recreation. MSF approved $700,000 for fiscal year 2016 and $725,000 for fiscal year 2017 to execute two one-year extensions of the Pure Michigan 400 sponsorship agreement.
Community Development MOU – MSF approved a Memorandum of Understanding between the Michigan Strategic Fund, Michigan Economic Development Corporation and Michigan Housing Development Authority that will realign all community development field staff from MSHDA to MSF under the umbrella of the Michigan Department of Talent and Economic Development. Currently both MEDC and MSHDA operate community development programs, and while strides have been made for better alignment of funding sources, both agencies provide similar technical assistance and funding which creates confusion for customers. The realignment will eliminate the redundancy and errors that can occur when dealing with multiple agencies, allow for a more hands-on approach to broader community development issues, and eliminate redundancy of application and monitoring processes.
“Today’s MSF actions offer further evidence of our commitment to help companies grow and generate new job opportunities for Michiganders,” said MEDC Chief Executive Officer Steve Arwood. “It is through the effort of public-private partnerships that today’s projects are taking place, and we’re pleased to support those collaborations.”
Pure Michigan is a brand representing business, talent and tourism initiatives across Michigan. These efforts are driven by the Michigan Economic Development Corporation, which serves as the state’s marketing arm and lead advocate for business growth, jobs and opportunity with a focus on helping grow Michigan’s economy.
For more on the MEDC and its initiatives, visit michiganbusiness.org. For Michigan travel news, updates and information, visit michigan.org. Michigan residents interested in seeking employment with any of Michigan’s growing companies should check mitalent.org, where more than 92,000 jobs are currently available in a variety of industries.