A package of bills to help Michigan better compete for, and win, transformational projects was passed by the Michigan Legislature last night with bipartisan support and is on its way to Gov. Gretchen Whitmer’s desk to be signed into law. She is expected to sign the legislation.
With funding appropriated at $1 billion, state leaders say the programs will put the state in the strongest possible position to win projects that would create economic opportunity for the next 20 years and beyond, while also delivering relief for businesses impact by COVID-19.
“We have said from the beginning that Michigan will move mountains to ensure we can compete for, and win, transformational projects that will bring long-term economic opportunity and security to regions and communities across the state,” says Quentin L. Messer Jr., CEO of the MEDC and president and chair of the Michigan Strategic Fund Board.
There are several projects with capital investment of more than $1 billion and more than 1,000 new jobs in MEDC’s pipeline that require these programs to secure them in Michigan, Messer adds.
As the automotive industry shifts from internal combustion engine vehicle manufacturing to electric vehicle production, investment decisions being made over the next 15 months will have a profound economic impact for Michigan’s economy and workforce. With nearly 300,000 jobs at stake, it is critical Michigan has the tools necessary to secure these generational investments here in the state.
The new legislation includes HB 5603, which creates a strategic site readiness program to provide grants, loans, and other economic assistance for the purpose of creating investment-ready sites to attract and promote investment in this state.
Site availability and readiness have risen quickly as key deciding factors for companies when considering future growth and expansion opportunities. As the MEDC works to win projects across multiple industries in both rural and urban areas, the program, state leaders said, will ensure an increased inventory of sites, particularly large sites, to support projects today and in the coming years.
SB 771 creates an industry investment fund that will allow Michigan to make investments to businesses, to close deals and create and preserve qualified jobs while generating significant capital investment.
SB85 funds the economic development efforts with a $1 billion appropriation while SB 769 creates the vehicle by which funding for the site readiness program and critical industry investment fund will be authorized to the Michigan Strategic Fund for transformational projects.
To support the effort, the Michigan Restaurant and Lodging Association (MRLA) went to work reinforcing the need to help those businesses most impacted by the pandemic. Earlier this year, the MRLA created a roadmap for the legislature to target American Rescue Plan Act (ARPA) funding to Michigan’s ailing restaurants and hotels and yesterday the legislature enacted a significant portion of that recommendation.
As a direct result of MRLA’s advocacy, the new legislation creates a $409-million fund in the Michigan Treasury to aid businesses, including restaurants and hotels, that were severely impacted by pandemic related restrictions and closures. The targeted relief fund will offer grants to qualifying businesses based upon the following payments they made in 2020.
- Property Taxes – 100 percent
- Lease Payments of Affected Businesses – 17 percent of annualized payments
- Unemployment Insurance Taxes – 50 percent of state unemployment taxes (SUTA)
- On-Premises Liquor License Fees – 100 percent
- Food Safety Inspection Fees – 100 percent
- Other State Inspection Fees – 100 percent
“We applaud the governor and the legislature for finding common ground to provide meaningful relief for Michigan’s still ailing hospitality industry,” says Justin Winslow, president and CEO of the MLRA. “The COVID-19 pandemic inflicted unprecedented destruction on restaurant and hotel operators across the state, with thousands closing their doors forever.
“For those that remain, erratic supply chains, crippling inflation, and a persistent virus continue to complicate their day-to-day operations. This funding will help many keep their doors open by allowing them to pay down debt and to subsidize their operations until more consistent business conditions emerge.”
“This legislation is much needed and will provide the opportunity for Michigan to win more key expansions while attracting new investment and jobs to our communities,” says Maureen Donohue Krauss, president and CEO of the Detroit Regional Partnership and current chair of Economic Development Leaders for Michigan.
“It is an important step in building out the economic development toolkit we need to beat out other states for major projects, create a more resilient economy, and retain our global automotive leadership. The Detroit Regional Partnership applauds the many who made this possible and look forward to meaningful conversations going forward on next steps to make Michigan as competitive as possible.”