Incentives Deal of the Month
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Michigan's $66M in STBC Subsidies Could Spur 4,000 New Jobs, Eight Expansionsby JACK LYNE, Site Selection Executive Editor of Interactive Publishing
LANSING, MICH. Michigan is working on a multi-faceted, incentives-fueled expansion that could ultimately trigger a very rich payout: more than 4,000 new jobs for the Wolverine State's southeast section.
The 4,000 jobs will come from no fewer than eight different firms' expansion projects. The incentives recipients are Advanced Technology Services; Akebono Corp.; Robert Bosch Corp.; Champion Foods; Faurecia; General Motors; HTC Global Services and TRW Automotive.
The Michigan Economic Development Corp. (MEDC at www.michigan.org) is awarding those eight firms a combined US$66 million in incentives from the state's Single Business Tax Credit (SBTC). (Editor's note: As of press time, other possible state and local project incentives had not yet been announced.)
All eight expansion projects are getting multi-year passes from Michigan's single-business tax, the only general business tax the state levies. The tsunami of subsidies is among the last of the incentives salvos that the MEDC has mounted in boosting Michigan's business-attraction allure during Gov. John Engler's 12-year tenure. (Engler, along with MEDC head Doug Rothwell, left office on Dec. 31. For more details, see "Michigan's Rothwell Moving from ED Role to GM Real Estate" from the Dec. 16 Snapshot.)
SBTC incentives are available to companies already located in Michigan that create at least 75 new full-time jobs, or to out-of-state firms that create at least 150 new full-time jobs. The SBTC program is often used to help persuade firms that are contemplating expanding outside of Michigan.
All eight companies awarded the new SBTC incentives were considering out-of-state sites, according to MEDC officials. Those officials disclosed some, but not all, of the Midwest states and Canadian provinces competing for the projects.
One of the expansions, however, remains a large question mark. Michigan is currently only one of the sites GM is considering for its $300-million project. For that matter, all eight firms' boards must approve the projects before they're fully official. GM, though, is the lone expansion not yet committed to Michigan, according to the MEDC.
Here are brief capsule looks (in alphabetical order) at the eight projects and their SBTC incentives.
Akebono Relocating North American HQ Advanced Technology Services (ATS) will create 218 new jobs by expanding its office in Livonia. A Peoria, Ill.-based provider of industrial parts and repair, factory maintenance, and IT services for manufacturing operations, the company will lease as much as 40,000 sq. ft. (3,600 sq. m.) of new space. ATS was awarded a seven-year, $997,000 SBTC. An Illinois site was the prime contender for the project, according to the MEDC.
Akebono Corp. is investing $54 million in purchasing an existing facility in Northville Township for the relocation of its North American headquarters. The relocation, according to the MEDC, will create 190 new jobs - some local hires, others transfers from other operations for Akebono, an automotive brake and component supplier. The project was awarded a 10-year, $3.6-million SBTC. The relocation, however, is actually an in-state move. The subsidiary of Japan-based Akebono Brake Industrial Co. is relocating its headquarters to Northville Township from its current location in Farmington Hills, Mich. The MEDC didn't disclose other competing locations.
Robert Bosch Corp. is building an engineering and sales center on a 77-acre (29-hectare) site in Plymouth Township. The center will create 700 new Bosch jobs over a 10-year span, some transfers from Bosch's Chicago operations, company officials said. The Bosch project, which will involve a $65-million investment for land and building, was awarded a 17-year, $20.8-million SBTC. The company, which recently announced a South Carolina expansion (see " 'Project Kudzu' Blooms: Bosch Adding 200 Workers in $200M South Carolina Mfg. Expansion," from last week's issue), is no newcomer to Michigan. Its North American headquarters is in Farmington Hills, and German-based Bosch employs some 4,300 workers statewide.
GM Officials: Decision on
Faurecia, which manufactures auto seats, is building a new, 97,500-sq.-ft. (8,775-sq.-m.) plant in Auburn Hills to accommodate new work for GM. The plant, which will employ as many as 205 workers in its first five years, was considering a location in Ontario, according to the MEDC. The company, which is headquartered in France, was awarded a 10-year, $7.3-million SBTC for its Auburn Hills plant.
GM's existing plant in Ypsilanti is at this point only one of a number of contenders for the automaker's $300-million project, which could create as many as 850 new jobs. Michigan is offering GM a 20-year, $17.1-million SBTC. The company, GM officials said, is making those incentives part of the business case in weighing locations for the project, which will retool an existing plant to make a new six-speed, rear-wheel-drive transmission for large SUVs and performance vehicles. The automaker will make its decision in early 2003, company officials said. But GM's incentives, as with the other seven firm's SBTC subsidies, have a finite time fuse. All eight projects must be completed by 2004, state officials said.
HTC Global Services Project
TRW Automotive is relocating its headquarters to Livonia from Cleveland. The company will relocate in a new $14-million, 120,000-sq.-ft. (10,800-sq.-m.) facility that it's building on a seven-acre (three-hectare) site. The relocation will create 165 new TRW Automotive jobs over the "next several years," the MEDC reported. The project was awarded a 10-year, $4.5-million SBTC. TRW Automotive had a particularly urgent relocation rationale - its current Cleveland space is closing, part of the headquarters phase-out for parent TRW, which has been acquired by Northrop Grumman. TRW Automotive will become an independent company in early 2003. TRW had earlier sold off its auto-supplier subsidiary to a well-known private investment firm, the Blackstone Group.
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