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German insulation manufacturer expanding in Albion ● MSF approves Transformational Brownfield Plan for paper mill in Kalamazoo ●DBRA receives approval of a brownfield work plan for Mack Avenue Engine Complex ● Community projects in Holland, Detroit
LANSING, Mich. – Projects expected to generate $625.2 million in total investment and support the creation of 555 jobs in Michigan gained approval from the Michigan Strategic Fund, the Michigan Economic Development Corporation announced today.
“The projects approved by MSF today will have positive economic impacts in communities throughout the state, from Albion to Detroit and Holland to Vicksburg, and will help build on our efforts to make Michigan communities vibrant places to live, work and play,” said Jeff Mason, CEO of MEDC, the state’s chief marketing and business attraction arm that administers programs and performs due diligence on behalf of the MSF.
“The redevelopment of the Vicksburg Paper Mill into a dynamic, exciting multi-use development will bring the village of Vicksburg and the surrounding area to life and represents exactly the type of development the Transformational Brownfield Plan program was intended for – supporting big-impact community revitalization projects around the state. We look forward to working with our local partners to bring this exciting redevelopment project to fruition,” Mason said.
Knauf Insulation North America, Inc., a subsidiary of its German parent Knauf Insulation GmbH, was established in Shelbyville, Ind. in 1978 and is a multinational producer of building materials and construction systems. The parent company is the fastest-growing insulation manufacturer in the world with a wide range of products for energy efficiency and acoustic performance in new and existing homes, commercial buildings, and industrial applications. Knauf Insulation has production sites in Alabama, California, Indiana, Michigan and West Virginia.
The company is experiencing growing demand for energy-efficient new-home construction as well as increasing the energy efficiency of existing homes through the addition of attic insulation. Knauf plans to invest in its facility in the city of Albion, a project that will convert and restart an idled production line, increasing production capacity by more than 30 percent. The project is expected to generate a total private investment of $32.4 million and create 34 jobs, resulting in a $204,000 Michigan Business Development Program performance-based grant. MSF also approved a 100-percent, 15-year State Essential Services Act exemption valued at $708,325. Michigan was chosen for the project over facilities in Indiana and Alabama.
“Keeping pace with the growing demand in the upper Midwest for quality loose-fill insulation products will be made possible through the expansion of our plant here in Albion,” said Kevin Keen, Albion plant manager. “The support we received from the State of Michigan and City of Albion helped make this expansion possible. We are excited to add 34 new full-time positions to our team roster, and to provide the surrounding area with an increase in employment both through the construction phase of the project and after start-up.”
The city of Albion plans to host a job fair in support of the project. Individuals interested in careers with Knauf should visit https://www.knaufinsulation.us/en/careers.
Paper City Development, LLC received MSF approval of a Transformational Brownfield Plan for its proposed multi-site mixed use redevelopment project in the village of Vicksburg and Schoolcraft Township that will include hotel and residential space, incubator space for microbreweries, a beer garden, demo gardens, public green space and more. The Mill at Vicksburg project includes the redevelopment of the abandoned historic Vicksburg Paper Mill, a former gravel pit and surrounding undeveloped property in the village and will serve as a catalyst for additional economic activity in the region.
The entire project is expected to generate a total private investment of nearly $80 million and create 221 permanent, full-time equivalent jobs. MSF approval of a Transformational Brownfield Plan authorizes several sources of tax capture in support of the project. The entire package is valued at $30 million, with an estimated state-benefit-to-incentive ratio of $2.30 in state revenue for every $1 of incentive.
The TBP program aims to revitalize communities by allowing large-scale, transformational projects to capture or receive an exemption from state sales and income taxes to redevelop challenging brownfield sites into new, vibrant developments that bring jobs and economic growth. Sites considered under the package are high-profile, high-traffic areas that define a locale’s identity and economic prospects. The TBP provides a key approach in closing the financing gap for private investors while generating a positive return on long-term tax revenue.
Support for The Mill at Vicksburg is the second Transformational Brownfield project approved by the Michigan Strategic Fund under the legislation. In May 2018, MSF approved a TBP package for Bedrock’s multi-development project in downtown Detroit. For more information on the Mill at Vicksburg project, visit here.
The City of Detroit Brownfield Redevelopment Authority (DBRA) received MSF approval of a brownfield work plan including local and school tax capture in the amount of up to $92,853,618 for the alleviation of brownfield conditions at the site of the FCA US LLC Mack Avenue Engine Complex at Mack Ave. and Conner St. in the city of Detroit. Of that amount, $33,977,977 in state and $58,875,641 in local tax revenue over the next 30 years was approved for MSF-related activities at the project site by DBRA. FCA plans to convert the two plants that comprise the complex into a manufacturing site for next-generation Jeep Grand Cherokee and an all-new three-row full-size Jeep SUV. The new facility will be the first new assembly plant to be built within Detroit’s city limits in nearly three decades. Additionally, the eligible property will be developed into surface parking, storage areas and locations for newly constructed stormwater management infrastructure. Current brownfield conditions will be alleviated through the redevelopment and expansion of the facility and development of the its supporting properties. Without the tax capture, the cost burden related to alleviation of the brownfield conditions at the site would make the project financially unfeasible.
The MACK project is expected to generate a total capital investment of $1.7 billion consisting of $1.6 billion by FCA and $150 million by the DBRA, along with the creation of approximately 3,850 permanent full-time equivalent jobs.
At its May 2019 meeting, the Michigan Strategic Fund approved a package of incentives for FCA projects that will generate a total of 6,433 new jobs and up to $4.5 billion in investment for the MACK project, Jefferson North Assembly Plant, Warren Truck Assembly Plant, Warren Stamping Plant, as well as its Sterling Stamping Plant. As part of the comprehensive package, it was noted that the City of Detroit would be requesting a brownfield work plan to support the brownfield activities associated with the project.
The City of Detroit Brownfield Redevelopment Authority also received MSF approval of local and school tax capture in the amount of $9,965,000 for a project that will include the redevelopment of a parking lot into a six-story, mixed-use parking structure to support the SoMA project located at 115 Erskine in Midtown Detroit. The project will rehabilitate an existing office building and will also include the activation of the adjacent alleyway, allowing for a vibrant mixed-use district. The parking structure will also support proposed development projects in the surrounding area. The project is expected to generate a total capital investment of $21.5 million and create 225 permanent, full-time equivalent jobs. The tax capture will be used to alleviate brownfield conditions at the site.
Local support for the project includes a Commercial Rehabilitation tax exemption valued at roughly $3 million. The city of Detroit is engaged with the MEDC’s Redevelopment Ready Communities program, simplifying and streamlining the process of engaging with developers in alignment with the city’s development goals.
Midtown Project, LLC received MSF approval to amend the original Brownfield Michigan Business Tax credit for The Mid at 3750 Woodward project with the addition of 3750 Woodward Avenue, LLC as a qualified taxpayer and a change to the scope of the project. The Mid at 3750 Woodward project will include the redevelopment of one parcel of property located at 3750 Woodward Ave. in the city of Detroit. The proposed amendment will bring a new developer to the project and include the construction of a 25-story tower that will house retail and event space, hotel space and condominiums. The amended project will also include a 27-story building containing 180 multi-family units and five levels of integrated parking; a 12-story building containing 198 co-living residential units and retail on the first two floors, and two single story cultural/arts buildings. The new facility will replace the previously approved medical office building and parking deck that were not built. The City of Detroit Brownfield Redevelopment Authority also received approval of an amendment to increase its local and school tax capture for brownfield alleviation activities to $58,331,654. Tax increment capture began in 2015 and is expected to continue for 30 years.
The project will generate a total capital investment of nearly $377 million, which is an increase of nearly $304 million over the previously approved work plan.
The city of Holland Brownfield Redevelopment Authority received MSF approval of an amendment to a Brownfield Work Plan for previously approved local and school tax capture in the amount of $4,031,000. The original project consisted of the construction of a 91,336 square-foot parking deck and site improvement activities between Columbia and College Avenues in downtown Holland. The amended project now includes the completed parking deck, construction of a three-story, multi-tenant commercial building and the installation of approximately 3,300 square feet of publicly-maintained, snowmelt-equipped sidewalks to support the project and downtown. The amended project will generate an additional capital investment of $37.2 million and create 75 full-time equivalent jobs, resulting in a new total tax capture of $6,901,450.
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.