Strategic Fund Board approves millions in project financing
The Michigan Strategic Fund Board is moving toward financing a portion of a billion-dollar potash and salt production plant in Evart Township.
Potash is a key potassium mineral used in fertilizing crops.
The board’s resolution allows a request for a $225 million tax-exempt bond to move forward. The private activity bond would cover sewage and wastewater disposal.
Cory Christofferson is chief development officer of the Michigan Potash Company. He said the investment would help reduce American reliance on importing the fertilizer ingredient.
“We're excited about what this project means for our country, for food security, national security and certainly … for the positive impacts that will come in the local community,” Christofferson said.
Officials described the step taken Wednesday to approve the inducement resolution as an administrative step.
Chris Cook is with the Michigan Economic Development Corporation, which oversees the Strategic Fund Board. He said the next steps are an independent evaluation, and then another board vote.
“We don’t necessarily have an exact date, but it could happen — a request for authorization, if we get to that step, could occur before the end of the calendar year,” Cook said.
At Tuesday’s meeting, the board also approved over $25 million in coronavirus relief money for a Michigan-based auto parts supplier, Nexteer Automotive.
The company's Vice President, Jill Dralle, said high community spread of COVID-19 near its Saginaw County-based operation hurt the company.
"And we continue to face considerable business costs associated with the volatility caused by the pandemic, including supply shortages, increased logistics costs, increased medical costs and more,” Dralle said.
In addition to receiving the COVID relief money through community development block grants, Nexteer also got approval for a multi-year state essential services assessment exemption.
According to state documents, the assessment exemption “is required for manufacturers that do not pay personal property tax on eligible manufacturing personal property.
Jeremy Webb is strategic projects advisor with the state Economic Development Corporation. He said this is the first time he’s been favorable to stretching out the exemption for a period of time.
“This particular one was completely necessary to encapsulate the investment, the long-term investment that Nexteer is committing to over the next ten years, and so it was imperative to do that in this particular instance,” Webb said.
State officials framed the Nexteer investment as helping save 1,100 jobs. Without the investment, they shared concerns the company would slowly stop investing in its Michigan manufacturing operation. The worry is that would lead to potential job loss.
“It wouldn’t happen overnight, honestly and obviously. But it would happen in relatively short order,” Webb said.