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MIRS Weekly Report

Michigan News And Capitol Report, Week Ending Friday, July 12th, 2024

MSF, MEDC Approves Nearly $277M For 37 Projects 

The Michigan Strategic Fund board met Tuesday and approved incentives through private bonds, grants and loans worth nearly $277 million for 37 different projects to support businesses. 

Michigan Economic Development Corporation CEO and MSF Chair Quentin Messer Jr. thanked Gov. Gretchen Whitmer and the Legislature for the budget, which gave them the ability to help businesses succeed across the state. 

“Team Michigan remains steadfast in our commitment to the ‘Make It in Michigan’ economic development strategy’s focus on people, places and projects to revitalize our communities and support employment and entrepreneurial growth in key industries across the state,” Messer said. 

Gestamp North America Inc., was given a 15-year 100 percent State Essential Services Assessment exemption worth an estimated $5.96 million and a Business Development Program grant for up to $5 million. 

The Match on Main program issued $748,018 in grants to 31 small businesses. The funding was approved by the board in February and the MEDC approved the awards Tuesday after picking from 113 applicants. 

The multinational group manufactures metal components for auto manufacturers, and the projects supported would help expansion of operations in Mason, Lapeer, and Chelsea. There was also a fourth project that would add machines and equipment to an operation in Chesterfield. 

Gestamp U.S. President Luis Ceular thanked the MEDC and other local economic development partnerships that helped the company. 

“We are happy and proud to have the support from the government of Michigan to help Gestamp grow our business in this key automotive hub after 20 years of success in the local car industry,” Ceular said. 

BerQ U.S. Investments, LLC, was approved to increase their private bond inducement to include two projects in Farwell and Kalamazoo, which would increase the bond amount to $235 million. 

The projects would create manure digesters that would be used to create organic compressed liquid natural gas. 

Side Door Michigan LP and eLab Capital Partners III received money from the Small Business Venture Capital Program 2.0 for different projects. 

Side Door was given $9.8 million to launch a venture capital investment fund that would be used to support technology companies in the state. 

The eLab project is an artificial-intelligence focused venture capital firm that would get $11 million to invest in early-stage AI companies in the state. 

Broadway Detroit Development II LLC would get a more than $8.2 million Michigan Community Revitalization Program Other Economic Assistance loan and the Detroit Brownfield Development Authority was given more than $3.45 million for a housing development project. 

The Broadway Lofts Redevelopment Project was expected to turn three vacant buildings into a single, multistory, mixed-use building, which would have 80 residential units and 6,462 square feet of commercial space. 

Colman Allen LLC, also got a revitalization loan for more than $2.67 million. 

The project was expected to help build a 50-unit housing development in Pontiac. The project also received a $3.5 million Missing Middle Grant from the Michigan State Housing Development Authority.  

“As enthusiasts of Pontiac, we are thrilled to embark on the revitalization of Casa Del Rey, a nationally registered historic building once owned by C.L. Groesbeck,” Ronita Coleman, of Coleman Allen, said. 

 

 

Enbridge Wins Round Against Whitmer In Line 5 Lawsuit 

A federal judge rejected Gov. Gretchen Whitmer's attempt to dismiss Enbridge Energy's lawsuit fighting her 2020 notice to cease operating Line 5 in the Mackinac Straits. 

U.S. District Judge Robert Jonker held the state wasn't able to establish sovereign immunity – which protects states or officials from being sued in federal court. 

"Enbridge requests relief that would preclude state officials from shutting down ongoing operations of a pipeline that has been functioning under easement for the past 65 years," Jonker wrote. "And the basis for that requested declaratory and injunctive relief are rooted in alleged violations of federal law." 

Jonker noted there are exceptions to sovereign immunity, as noted in Boler v. Earley, including when a state waives immunity. However, he said, Michigan hasn't waived immunity and, as a result, the Ex parte Young exception is the "only relevant" one available. 

That 1908 decision from the U.S. Supreme Court essentially holds that state officers cannot rely on sovereign immunity to defeat lawsuits for prospective relief. 

Jonker said Enbridge seeks a "prospective injunction" preventing state officers "from allegedly breaching federal law by stopping the ongoing operation of a pipeline. That brings this case squarely within Ex parte Young." 

Jonker will hold a hearing July 31 to consider Enbridge's motion to dismiss two claims and enter a judgment that holds Michigan's attempt to force the shutdown of Line 5 is preempted by the Pipeline Safety Act and the Foreign Affairs Doctrine. 

A message seeking comment from Whitmer was not returned. 

Enbridge spokesperson Ryan Duffy said the Canadian company continues to believe Michigan lacks authority under federal law to regulate Line 5's safety or to seek closure. 

"At the same time, we are pleased that the State's motion to dismiss was denied, vindicating our decision to seek relief from the State of Michigan's unwarranted efforts to force a critical international pipeline to close," Duffy said. 

"Over the past five years, the State of Michigan has taken affirmative steps to prevent Enbridge from operating Line 5 across the Straits of Mackinac based on perceived safety and spill risk concerns," he added. "Our position continues to be that only our exclusive safety regulator, the Pipeline and Hazardous Materials Safety Administration (PHMSA), has authority to make safety decisions relating to Line 5. PHMSA has raised no safety concerns regarding Line 5's crossing of the Straits and the State should not be second-guessing PHMSA's authority." 

Whitmer issued a notice in November 2020 seeking to revoke the 1953 easement allowing the pipeline's operation, and she filed a lawsuit in Ingham County Circuit Court, but she dismissed that suit after the federal court held her lawsuit would remain in federal court as Enbridge requested. 

Enbridge filed its own suit against Whitmer to block her shut-down order. 

Jonker was assigned to the Enbridge lawsuits after U.S. District Judge Janet Neff retired in 2021. 

Both Enbridge and Whitmer's administration filed requests for speedy consideration and Whitmer also asked to stay Enbridge's suit against her while Attorney General Dana Nessel's suit continues. 

Enbridge tried to move Nessel's suit to federal court, but the U.S. Sixth Circuit Court of Appeals held in May that the removal request was filed too late. 

 

 

MSF Reduces $1B Grant To $410M For Marshall Battery Park 

The Michigan Strategic Fund board on Tuesday cut the amount of money earmarked for the BlueOval Battery Park after Ford announced last year that it would reduce the size of the factory. 

The funding cut required six separate votes for amendments to different programs given to create a 2,000-acre Marshall Area Jobs, Opportunity and Recreation (MAJOR) campus. The total investment from the state went from more than $1.034 billion to a maximum of $409,146,329. 

“We are nimbly adjusting our manufacturing operations to match evolving customer demand, and the Michigan Strategic Fund board is revisiting its incentive offers accordingly,” Ford State and Government Affairs Director Tony Reinhart said. 

The size of the battery factory Ford expected to build at the BlueOval Battery Park was reduced from 2,500 jobs to between 1,700 and 2,100, with a maximum capital expenditure between $2.5 billion and $3 billion. 

Ford restarted the $3.5 million project after a 2023 strike by the United Auto Workers and MEDC said there would be a reduction.  

The resulting reworked Michigan Economic Development Corporation incentives offered were a lowering of the State Critical Industry grant from $210 million to between $141 million and $166 million.  

A nearly $773 million Renaissance Zone was deleted from the project, which removed a business tax-free zone approved by the MSF board. 

The State Essential Services Assessment exemption was also lowered to nearly $18.5 million. 

Ford officials said the battery park, which was 20 percent built, would create 1,700 jobs and was expected to start producing batteries to be used in electric vehicles by 2026. 

“BlueOval Battery Park Michigan will play an important role in our plan to make electric vehicles more accessible and affordable by producing low-cost LFP batteries in the U.S. and not relying on imports,” Ford Electric Vehicle Programs Vice President Lisa Drake said. 

The battery factory would take up 730 acres, with another 245-acre conservation easement along the Kalamazoo River.  

The Marshall Area Economic Development Alliance (MAEDA) also talked at the MSF meeting and said the MAJOR campus would also be used for other businesses, and the building site was already spurring economic activity in the area. 

“It’s exciting to see hundreds of workers on the MAJOR Campus that will continue to ramp up to almost 1,000 by the end of the year. In the short term, this means more people visiting our shops and spending money at our small businesses and, in the long term, it means more jobs, personal wealth and revenues for our community,” MAEDA CEO James Durian said. 

Durian said Hoffman Brothers and Granger Construction were the companies that received the MEDC funding to upgrade the water and wastewater infrastructure that serves the area.  

Reinhart and Marshall Mayor Jim Schwartz said Ford had also started sponsoring local events in the county. 

“We continue to hear from members of our community who are excited about the new opportunities coming here because of Ford’s investment,” Schwartz said. 

 

 

2 Michigan Companies Get $657M In EV Grants From DOE 

General Motors and ZF North America got a combined $657 million in grants from the U.S. Department of Energy to retool factories to build electric vehicles and build EV infrastructure in Michigan. 

The funding comes through the Domestic Manufacturing Conversion grants with money from the Inflation Reduction Act. General Motors would be getting $500 million to upgrade the Grand River plant in Lansing and ZF North America would get $157.7 million to make electric vehicle parts in Marysville. 

“We must be proactive if we are going to keep building the cars and trucks the people rely on in America, and I am proud that Michiganders are ready to roll up their sleeves and get it done,” Gov. Gretchen Whitmer said. 

The awards, however, are subject to negotiations to ensure commitments to workers and communities are met, White House officials said.  

Other recipients include Fiat-Chrysler Automotive, Volvo as well as suppliers like American Auto Parts, according to the White House and Department of Energy. 

The White House said the grants cover a broad range in the supply chain, including parts for electric motorcycles and school buses as well as hybrid powertrains, heavy-duty commercial truck batteries and electric SUVs. 

In addition to Michigan, battleground states Pennsylvania and Georgia as well as EV facilities in Ohio, Illinois, Indiana, Maryland and Virginia will receive grants. 

ZF North American would also get a $10 million matching grant from the Battery and Advanced Manufacturing Challenge, which was a competition announced by Whitmer in February.  

The funding for the matching grant comes from the Make it in Michigan Competitiveness program, which was distributing grants from the CHIPS Act, Inflation Reduction Act, and the Infrastructure Investment and Jobs Act.  

The program was administered by the Michigan Infrastructure Office, which has $267 million in federal funding left in the program. 

Chief Infrastructure Officer Zachary Kolodin said the office was coordinating the different departments to help efficiently go after and win federal funding, without stepping on each other’s toes.  

“Investments from the Inflation Reduction Act are creating jobs in hard-working counties across Michigan, building the future of sustainable transportation and clean energy. That’s why we are competing to win every dollar through fiscally responsible investments like the Make it in Michigan Competitiveness Fund and Technical Assistance Center,” Kolodin said.