Strategic Fund Board OKs incentives for major projects
A trio of economic development projects are set to receive hundreds of millions of dollars in state incentives.
The Michigan Strategic Fund Board approved funding for two battery plants and a wastewater pipeline Wednesday morning. The money for the projects will come from the Strategic Outreach and Attraction Reserve (SOAR), created last year.
Officials estimate one of those battery manufacturing operations, led by Chinese-owned Gotion, Inc., will lead to up to $2.4 billion in investment for the Big Rapids region.
Jeremy Webb is with the Michigan Economic Development Corporation. During the meeting of the Strategic Fund Board, he said the project has been “a long time in the making.”
“The project represents a once-in-a-generation opportunity for the greater Big Rapids area by bringing over $2.3 billion of investment and over 2,300 new jobs, representing the largest economic development project this far north in state history,” Webb said.
Between Critical Industry Program grants to Gotion and a Strategic Site Readiness Program Grant Request approved for the group The Right Place, Inc., the project stands to receive a total of $175 million from the SOAR fund. That’s on top of a 30-year Renaissance Zone designation that would help with lowering Gotion’s tax burden.
Specifics about Gotion’s request from the state were not publicly available before Wednesday’s meeting.
The state expects the other planned battery operation, in Van Buren Township, to lead to over 2,000 new jobs and $1.6 billion in investment. That’s off of over $200 million in state incentives.
Meanwhile, the MEDC sees the $60 million request for a wastewater pipeline in Muskegon and Ottawa counties, called the Southeast Regional Force Main, as helping support local agribusiness.
Quentin Messer is the CEO of the Michigan Economic Development Corporation. He says the state will make sure its money is well spent.
“Before a dollar of Michigan taxpayers goes to the company, they have to perform. These are mutually agreeable. We expect success but we want to make sure we mitigate any downsized risks.”
The investment comes a day after Governor Gretchen Whitmer signed a bill refilling the fund used for the incentives. Proponents argue the SOAR program pays for itself through the economic impact of the business it attracts.
But critics like James Hohman with the Mackinac Center for Public Policy say aspects of the program go too far.
“The critical industry portion is any company can get this and they can collect any dollar amount provided that it’s been appropriated by the Legislature. No other state has that. So, if we have to compete with other states, congratulations,” Hohman said.
He said the state should instead invest in priorities like infrastructure or tax cuts.