The Michigan Strategic Fund Tuesday approved initiatives, business expansions, and community revitalization projects that included support for the renovation of the United Artists Building in downtown Detroit and the construction of a new residential midrise in Midtown, among other projects.
Overall, the MSF has approved five community revitalization projects.
The Woodward at Midtown project will construct a new five-story, mixed-use building on a vacant site along the Woodward corridor in the Midtown neighborhood of Detroit. The completed project will include retail space on the first floor and 204 residential units on the upper four floors, with 41 of the units being reserved for individuals earning 80 percent or less of the area median income.
The project is expected to generate a total capital investment of $59 million and will result in activating one of the last remaining vacant lots in the area while also bringing residential housing to the area. MSF today approved a $5.3 million Michigan Community Revitalized Program performance-based loan participation in support of the project.
The City of Detroit Brownfield Redevelopment Authority also received MSF approval of a brownfield work plan including state tax capture in the amount of $900,841 to be used for the remediation of brownfield conditions at the site. The city of Detroit Downtown Development Authority is also supporting the project with a $2.2 million loan, reduction of the land acquisition price, approval of the local portion of the brownfield tax increment financing with an estimated value of $1.55 million, and anticipated approvals of Commercial Rehabilitation Act and Neighborhood Enterprise Zone tax abatements valued at more than $10 million. The city of Detroit is engaged with MEDC’s Redevelopment Ready Communities Program.
Bagley Development Group plans to rehabilitate a historic, 18-story mixed-use building in downtown Detroit. The United Artist Building will include 148 mixed-income residential units and first-floor commercial space. The project is expected to generate a total capital investment of $73 million and create 25 full-time equivalent jobs. It will reactivate a long-vacant historic asset, increase density near Grand Circus Park, and bring housing.
MSF approved a $5 million Michigan Community Revitalization Program performance-based loan participation in support of the project. The city of Detroit plans to contribute $3 million in Community Development Block Grant funds toward the project and is anticipated to include both an Obsolete Property Rehabilitation Act abatement valued at $382,456 and a Neighborhood Enterprise Zone abatement valued at $8.3 million. The city is also providing a $2.5 million loan from the Downtown Development Authority.
The village of Cassopolis has received $2.8 million in Community Development Block Grants funds for public improvements for the Imagine Cass Streetscape Transformation project in downtown Cassopolis. The project will build on the village’s Imagine Cass master plan that focuses on four main themes by implementing physical improvements that impact more than 400,000 square feet of public space in downtown Cassopolis and the surrounding corridors.
The improvements will enhance the aesthetics and infrastructure of the district, while also improving connectivity and access of low- and moderate-income community members to local businesses and services, encouraging private investment and enhancing safety for pedestrian and bicyclists. The total project cost is estimated to be $5.95 million. Cassopolis is contributing $3.15 million toward the project.
Ishpeming received $1,896,342 in CDBG funds for public facilities improvements needed for the Senior Center Public Facilities development project in downtown Ishpeming. The project includes the construction of a new senior center and the demolition of the previous, blighted center. The total project cost is estimated to be $2.073 million, with the Greater Ishpeming Commission on Aging and the city of Ishpeming providing $207,338 toward the project.
A $490,730 CDBG grant was recently approved under MSF delegated authority for the Senior Center Public Facilities project in Negaunee. The city is contributing $52,136 in local funds toward the project. It will also allow the city to continue to provide services and opportunities to senior citizens who reside in Negaunee and the surrounding communities.
The City of Lansing Brownfield Redevelopment Authority has received MSF approval of a brownfield work plan that will include $19,844,895 in state tax capture reimbursement for the Red Cedar development project in Lansing. The project will be located on the former Red Cedar Golf Course site, redeveloping a 35.57-acre portion of a 60-acre riverfront site into a mixed-use development with several components including two hotels, and assisted living facility, multi-family housing, student housing, retail, restaurants, public infrastructure, and placemaking improvements. The remainder of the 60-acre site will be transformed through an Ingham County Drain Commission project into a public park with trails and wetlands.
The project is expected to generate a total capital investment of $255.6 million and create about 397 full-time equivalent jobs. The city of Lansing is supporting the project through the approval of the local portion of the brownfield tax increment financing with an estimated value of $39.69 million and the Lansing Board of Water and Light will be investing $278,965 to remove an electrical substation.
“Today’s MSF actions build on our efforts to deploy every resource available to support Michigan’s businesses, communities, and residents as they work to economically recover from the COVID-19 virus,” says Mark A. Burton, CEO of MEDC. “It is more vital than ever that we stay focused on restoring economic prosperity for all Michiganders, and the projects approved today are putting our state in a position to not only recover economically, but to thrive.”
MEDC has deployed 14 response programs in the past two months to support small businesses, communities, entrepreneurs, and workers, providing support for more than 2,700 companies and helping retain more than 11,000 jobs. The programs reached all 83 Michigan counties in industries such as food service, retail, health care, construction, professional services, and more.
Metro Community Development Inc., a community development finance institution based in Flint, received approval on a $2 million loan through MEDC’s Capital Access program to make micro- and small-business loans ranging from $5,000 to $250,000 to small businesses in the 13 counties it serves, with an emphasis on businesses in economically disadvantaged areas. The program is aimed at helping businesses that have been most impacted by the virus, such as restaurants, coffee houses, retail stores, and service providers. Businesses can use these loans primarily for working capital, acquiring machinery and equipment, and inventory.
Metro Community began accepting loan applications Tuesday. Businesses interested in applying can click here.
The Metro Community loan provides business relief in counties not previously covered through a $2 million loan approved by the MSF in April to Northern Initiatives, which is using the funds to assist small businesses in the 77 counties it serves. Between Northern and Metro, businesses in all counties in Michigan except Wayne County have been provided access to micro loan funds through the MEDC Capital Access program. It is anticipated that a similar loan will be recommended to cover Wayne County at an upcoming MSF meeting.
The fund approved updated guidelines to the MI State Trade Expansion Program to increase the reimbursement ceiling from 50 percent to 75 percent for international website development for companies impacted by COVID-19. The increased cap is designed to provide greater support for companies going global, making it more favorable for them to participate in export activities. The approved changes are based on directives from the U.S. Small Business Administration as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and include increasing caps for allowable reimbursements for small- and medium-sized businesses engaged in exporting activities.
The program is administered by MEDC’s Export and International Trade Program. MEDC’s MI Project Exception Program, which provides export assistance to companies that do not meet the SBA’s small business requirements, also received MSF approval of similar updates to its guidelines so it remains consistent with the MI State Trade Expansion Program.
The MSF also approved the 2019 Action Plan amendment for the Community Development Block Grant program, which includes incorporating $20.5 million in coronavirus response funds into the program to be used for CARES Act eligible activities.
Packing Compliance Labs, a medical device packaging engineering and testing firm headquartered in Kentwood, specializes in assisting global medical device manufacturers in speeding new medical devices to market. It plans to expand its Kentwood facility, a project that will generate a total private investment of $2.57 million and create 27 high-wage jobs. The company also plans to invest in the training and development of its employees. PCL has been awarded a $135,000 Jobs Ready Michigan program performance-based grant. It was chosen over competing sites in Denver and Tampa.
“PCL has worked closely with the Right Place, MEDC, and several other local organizations since our inception in 2014,” says Matthew Lapham, president of PCL. “We are grateful to have these support systems available in our community. This grant is another example of the great resources offered to small businesses here in Grand Rapids.”
The Right Place has offered staff time and resources in support of the project. Individuals interested in careers with PCL can click here.
ArcelorMittal Tailored Blanks Americas Corp., a subsidiary of ArcelorMittal, a steel and mining company that serves the automotive industry, received a $2 million Michigan Business Development Program performance-based grant for plans to establish a manufacturing facility in the I-94 industrial park in Detroit. The project was expected to generate a total capital investment of $83 million and create 120 jobs and was the company’s first and only facility in Michigan.
The company has reached its milestones and has recently secured new business to begin manufacturing contracts with two different automotive OEMs. The new project lines will require an expansion at the company’s existing Detroit facility.
MSF approved an increase to the company’s grant and a five-year, 100 percent State Essential Services Assessment exemption valued at $379,200. ArcelorMittal pays higher than average wages and provides employees with a technical training program.
MSF awarded $950,000 to Michigan Translational Research and Commercialization (MTRAC) Programs across the state. Programs approved include $350,000 to Wayne State University’s MTRAC Advanced Computing Innovation Hub, $250,000 to Michigan Technological University’s MTRAC Advanced Materials Innovation Hub, and $350,000 to Michigan State University’s MTRAC Agriculture-Biology Innovation Hub.
MTRAC supports the acceleration of technology transfer from Michigan higher education institutions, nonprofit research centers, and hospital systems for commercialization of competitive-edge technologies in the areas of agriculture-biology, advanced computing, advanced transportation, life sciences, and advanced materials. The MTRAC program is supported by funds from the MSF and administered by the MEDC with additional funding coming from partnering institutions.
More information on MEDC’s COVID-19 response programs is available here. Other resources for businesses that are struggling with economic losses can be found here. The MEDC also developed a frequently asked questions page for Michigan businesses and communities here.
The MEDC is the state’s marketing arm and advocate for business development, job awareness, and community development with a focus on growing Michigan’s economy.
In related news, Capital Impact Partners in Virginia launched a $12.5 million Diversity in Development – Detroit Loan Fund, which is designed to increase support for minority real estate developers spearheading rehabilitation of new construction of mixed-use, multifamily housing projects in Detroit. Capital Impact has an office in Detroit.
The fund builds on Capital Impact’s Equitable Development Initiative, a program comprised of training, mentorship, and financing to support historically underserved local developers. The new fund leverages the company’s experience working with local developers and community partners to support minority developers in growing their careers and rebuilding their communities. Since launching in 2017, the initiative has had 47 participants in Detroit and has since expanded to Washington, D.C.
“We’ve seen great success since launching the EDI program, and we are excited to continue providing opportunities and increasing capital to ensure equitable development in the communities we serve,” says Ellis Carr, president and CEO of Capital Impact. “This fund allows us to further grow this effort and support Detroit’s minority developers who are working to stabilize communities, build affordable housing, and revitalize neighborhoods across the city.”
Interested candidates must be locally based, identify as racial or ethnic minorities, and have projects with at least five residential units in Detroit. The fund includes loans of up to $5 million, up to 100 percent loan-to-value, loan terms between two and 10 years, amortization up to 35 years, and a minimum equity contribution of 5 percent.
Capital Impact hopes its fund will create a pathway of success for developers who have not been able to enter the real estate industry due to systemic disinvestment.
For more information, click here or email Nicholas Pohl at npohl@capitalimpact.org.
Capital Impact is a nonprofit community development financial institution that offers mission-driven financing, social innovation programs, capacity building, and impact investing. It has disbursed more than $2.5 billion since 1982.
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