Arbor Networks to Expand R&D Operations in Ann Arbor

Michigan Wins $14 Million Investment, 139 New Jobs

Governor Jennifer M. Granholm today announced that Arbor Networks Inc., a provider of secure service control solutions for global business networks, plans to invest approximately $14 million to expand its research and development operations in Ann Arbor. The project is expected to create 139 new Michigan jobs, including 56 jobs directly by the company. Assistance offered through the Michigan Economic Development Corporation (MEDC) helped convince the company to expand in Michigan over a competing site in Massachusetts.

"Arbor Networks is exactly the type of company that we need to continue to nurture and grow in Michigan," Granholm said. "High-tech jobs like those created by this project will help transform the state's economy and strengthen the state's leadership in commercializing the innovative research born at our world-class universities."

Based on the MEDC's recommendation, the Michigan Economic Growth Authority board today approved a state tax credit valued at more than $1.5 million over 10 years to win the company's investment. The city of Ann Arbor is considering a property tax abatement valued at approximately $193,200 over eight years to support the project.

"Winning Arbor Networks' continued investment was a team effort with Ann Arbor SPARK and the city," MEDC president and CEO James C. Epolito said. "The innovative incentive package offered and our world-renowned talent pool ultimately tipped the scales toward Michigan."

An economic analysis conducted by the MEDC estimates that increased economic activity created by the new facility will generate an additional 83 indirect Michigan jobs, in addition to the 56 jobs created directly by the company. The project is expected to generate more than $62 million in personal income for Michigan workers over the life of the tax credit.

"Arbor Networks' research and development facility in Ann Arbor has been an anchor for the company's growth. Expanding our operations here in the Ann Arbor region enables the company to leverage its existing facility as part of a strategic growth initiative," said Dr. Farnam Jahanian, co-founder and chairman of the board of Arbor Networks.  "Talent and resources, like proximity to the University of Michigan and a major international airport, were the catalyst for choosing Ann Arbor over competing sites considered for this expansion."

The Arbor Networks expansion is one of three economic development projects the governor announced today. In all, they are expected to create and retain a total of 261 Michigan jobs.

Arbor Networks provides secure service control for global business networks. Founded in 2000, the company's patented technology is based on pioneering Internet security research conducted by the company's founders at the University of Michigan College of Engineering under a Defense Advanced Research Projects Agency (DARPA) grant.

Arbor Networks is headquartered in Lexington, Mass. with more than 300 customers across the world from leading Internet service providers to Fortune 500 corporations and higher education institutions. Currently, 72 people are employed at Arbor's Ann Arbor research and development facility.

"Companies like Arbor Networks realize that, as a destination for business expansion and location, the Ann Arbor region offers unparalleled resources," said Michael A. Finney, CEO, Ann Arbor SPARK. "Our local community offers a diverse and educated talent pool to support hiring, access to major research institutions, and comparatively low cost of doing business. We are pleased that Arbor Networks recognized the bottom-line benefits of expanding in the Ann Arbor region."

In her 2007 State of the State address, Granholm emphasized the importance of making Michigan a global economic powerhouse in the 21st century. Since January 2005, the governor and the MEDC have announced the creation or retention of more than 217,000 jobs as a result of targeted assistance provided by the MEDC.

 

Arbor Networks Inc.    
(All estimates in 2008 dollars)     

TOTAL JOBS CREATED                                                                                139

 Direct                                                                                                                             56

 Indirect                                                                                                                          83

NET POSITIVE STATE REVENUE IMPACT                                        $3,286,000

 Revenue Foregone                                                                                        $1,539,000

 Revenue Gain                                                                                  $4,825,000

 Average Weekly Wage                                                                                         $1,558

Personal Income Generated Over 10-Yr Tax Credit Agreement              $62,669,000

 

About Michigan Economic Development Corporation (MEDC)

The Michigan Economic Development Corporation is the state’s marketing arm and lead advocate for business development, job awareness and community development with the focus on growing Michigan’s economy. For more information on the MEDC and our initiatives, visit www.MichiganBusiness.org. For Pure Michigan® tourism information, your trip begins at www.michigan.org. Join the conversation on: Facebook Instagram LinkedIn, and Twitter.