For a list of Michigan economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
FINANCING & GRANTS
Community Development Block Grant Public Infrastructure: The MSF administers the Michigan Community Development Block Grant (CDBG) program, which is a federal program that provides funds to eligible counties, cities, villages and townships for economic and community development. Qualifying economic development projects are those directly related to a for-profit business location or expansion involving eligible activities that will result in the creation of jobs, with at least 51% of those jobs held by low- and moderate-income workers.
Michigan Business Development Program (MBDP): The Michigan Business Development Program is an incentive program available from the Michigan Strategic Fund (MSF), in cooperation with the Michigan Economic Development Corporation (MEDC). The program is designed to provide grants, loans or other economic assistance to businesses for highly competitive projects in Michigan that create jobs and/or provide investment. The MBDP is available to eligible businesses that create qualified new jobs and/or make qualified new investment in Michigan. The Qualified New Jobs must be held by Michigan residents of the Applicant company and be in addition to those maintained in Michigan prior to the project. Eligible investment includes investment made by the business in Michigan in support of the project and approved by the MSF. Preference may be given to businesses in need of additional assistance for deal-closing and second stage company gap financing.
Any business seeking to qualify for MSF support on the basis of job creation must create a minimum of 50 Qualified New Jobs. Unless a project is in a rural county (a county with a population of 90,000 or less) or qualifies as a high-technology activity, in which case the business must create a minimum of 25 qualified new jobs. High-technology activities are defined in the Michigan Economic Growth Authority Act, Public Act 24 of 1995, although it does not include Tool and Die unless the eligible business meets a different high-technology definition.
Michigan Community Revitalization Program (MCRP): The MCRP is an incentive program available from the Michigan Strategic Fund (MSF), in cooperation with the Michigan Economic Development Corporation (MEDC), designed to promote community revitalization that will accelerate private investment in areas of historical disinvestment; contribute to Michigan’s reinvention as a vital, job generating state; foster redevelopment of functionally obsolete or historic properties; reduce blight; and protect the natural resources of this state. The program is designed to provide grants, loans or other economic assistance for eligible investment projects in Michigan. A person or two or more persons may apply to the MSF for approval of MCRP incentives associated with a project
The MSF’s support will not exceed 25% of the total eligible investment for a single project, and in no event exceed a total of $10,000,000 for loan agreements or $1,000,000 for grant agreements, or $10,000,000 for a combination of support. Any grant or loan under the program will be performance based. Grants and loans will include flexible terms and conditions and may be assignable upon approval of the MSF. Loan terms and conditions may include below market interest rates, extended grace and repayment provisions, forgivable terms and no security or some security (which may be subordinated). As required by the Act, all written agreements will include a repayment provision for failure to comply with the provisions outlined in the written agreement. The Program will also consider awards to projects where the MSF will purchase a share, or participate, in a Senior Loan facility or contribute equity into the project all on terms acceptable to the MSF.
Eligible investment to an eligible property is considered based on one or more of the following categories as further determined by the MSF Board (MCL 125.2090a(d)):
- Any alteration, construction, improvement, demolition or rehabilitation of buildings;
- Site improvement;
- The addition of machinery, equipment or fixtures; and
- Architectural, engineering, surveying and similar professional fees for a project but not certain soft costs of the eligible investment
Public Spaces Community Places: A program which provides matching funds to resident-led crowd funding community improvement projects.
A creating funding program that partners the Michigan Economic Development Corporation (MEDC) and the Michigan State Housing Development Authority (MSHDA) with the Michigan Municipal League and the Michigan-based crowd funding platform Patronicity. This opportunity mobilizes community members, residents and general supporters to make individual contributions while promoting their efforts to others. Communities, non-profits and other business entities can submit projects by applying for a Patronicity crowd funding online donation campaign. Projects meeting fundraising goals can receive a matching grant from MEDC/MSHDA of up to $50,000.
Public Spaces Community Places projects include:
- Public Plaza & Green Space Development
- Access to Public Amenities
- Farmer’s Markets, Community Kitchens, Pop-Up Retail/Incubator Space
- Alley Rehabilitation
- Any other place based (or public space improvement) project
The creative funding mechanism is available to projects located in Michigan communities which contain a traditional downtown. Only local communities and non‐profit entities are eligible to apply. Non‐profit entities must have 501c3 status in place before project launch. A traditional downtown is defined as follows:
- A grouping of 20 or more contiguous commercial parcels containing buildings of historical or architectural significance.
- The area must have been zoned, planned or used for commercial development for more than 50 years.
- The area consists of primarily zero lot‐line development.
- The area has a pedestrian‐friendly infrastructure.
Pure Michigan Business Connect: Through economic gardening initiatives, Michigan businesses have new ways to buy and sell, raise capital and connect with each other. Pure Michigan Business Connect is a $3 billion public-private initiative that strengthens our economic gardening philosophy through an alliance of the MEDC, Michigan companies and other Michigan organizations. Pure Michigan Business Connect matches people with resources including venture capital, debt financing, collateral support and other funding assistance; business support services like customized market research, executive and professional talent search assistance, training support, customized site searches and ombudsman services; and additional public/private support such as entrepreneur services, export assistance, legal services and matchmaking with Michigan suppliers.
Inventory Tax: No inventory tax no matter where a company locates in Michigan. All inventory is exempt from state and local property taxes.
Personal Property Tax Reform: In an ongoing effort to make the state a more attractive place for businesses to invest and grow, Michigan is phasing out its Personal Property Tax (PPT) for most businesses beginning in 2014. This reform will substantially reduce compliance and administrative costs for businesses and will be especially attractive to manufacturers who rely on expensive capital investments in tools and other equipment. Eligible manufacturing personal property could include both commercial personal property and industrial personal property. More specifically, the term refers to all personal property located on real property where that personal property is used more than 50% of the time in industrial processing or in supporting industrial processes.
Eligible manufacturing personal property purchased by the first owner:
- after 2012 will be 100% exempt beginning in 2016.
- before 2006 will be 100% exempt beginning in 2016.
- in 2006 through 2012 will be 100% exempt when the personal property becomes 10 years old.
Property Tax Abatement under PA 198 of 1974: Local units of government in Michigan¹s border counties have the ability to reduce property taxes on new investment by 50% for some warehouse, distribution and logistics centers. These abatements can last up to 12 years and can provide relief on both real and personal property taxes. The business must occupy a building that is no smaller than 100,000 square feet in size, and at least 90% of the facility must be used for warehousing, distribution or logistic purposes. The local unit of government is responsible for approving these abatements and their duration.
Sales Tax Exemptions: The 6% state sales tax is not levied on the purchase of machinery and equipment used in manufacturing.
State Education Tax Abatement: The MEDC can abate half or all of the 6-mill State Education Tax on new investment when the project presents significant economic benefits to Michigan, and when the project receives a property tax abatement under PA 198 of 1974.
Tax Abatements: Municipalities have the authority to provide a tax abatement on real and personal property for manufacturing facilities.
Talent: From high-tech to skilled trades, Michigan is creating momentum to become a top 10 state for job creation. Developing talent for today and tomorrow’s jobs is priority one, offering companies a deep and diversified talent pool. MEDC works with its sister-department, the Talent Investment Agency, to help companies find and attract the best talent.