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MEDC has funding for all types of businesses
The head of the Michigan Economic Development Corp. said last week that his organization has capital readily available for businesses in all sectors and in every nook and cranny of the state.
“We’re providing a small bakery in Detroit with $400,000, and that’s not something the MEDC would have done previously,” said Michael Finney, MEDC president and CEO, who appeared at an event here last week sponsored by the Grand Valley Metro Council.
Finney told a small but attentive audience at the Kent District Library branch in Kentwood that giving the bakery funding revealed the extent the MEDC will go to in order to get capital into the hands of needy and promising business owners.
The private organization, which is often miscast as being a state agency, offers connections to venture matching, fund-to-fund funding, microloan programs, banking funds and venture capital funds.
Finney, who directed the Ann Arbor Spark to national economic development prominence before joining the MEDC, said the MEDC is trying to leverage capital to promote growth in all stages of the business lifecycle.
The organization now offers two business incentive programs in cooperation with the Michigan Strategic Fund; both replace benefits that came from the Michigan Business Tax, such as the brownfield and historic tax credit programs. The MBT goes away Jan. 1 and will be replaced by a 6 percent corporate tax.
The first is the Michigan Business Development Program. The MBDP offers grants, loans and other unspecified economic assistance of up to $10 million to businesses that are creating “qualified new jobs” and making new investments in Michigan.
The second is the Michigan Community Revitalization Program, which like the MBDP offers up to $10 million in financial help through grants, loans and other economic assistance to projects that promise to revitalize urban areas, act as a catalyst for additional investment, reuse vacant or historic buildings, and promote mixed-use and sustainable development.
“We are creating entirely new incentive programs to attract new business investment for job creation and redevelopment of our communities that are performance based with clear benchmarks, that will offer greater flexibility and a transparent process,” said Finney, who was raised in Flint when that city was pumping out Buicks for the General Motors Corp.
“We can now offer quicker access to funding assistance for businesses and developers while affording lower costs and greater flexibility for economic developers,” he added. “They’ll be able to collect cash instead of a tax credit.”
The state Legislature allocated a total of $100 million for the incentive programs. Finney said $20 million came from the state, while the federal government gave $80 million. He added that there is another $2 billion in private-sector money available. “I think we can honestly say the commitment is there.”
Finney noted that 86 percent of Michigan’s existing businesses will have more capital available beginning in January when the new state tax program goes into effect — another $1.8 billion statewide. Those firms will be exempt from the state’s new corporate tax.
Finney also said the MEDC will help companies define alternative markets to increase sales and cash flow.
“The reality is we can make medical devices as well as we make cars.”
Matchmaking is another function the MEDC provides. Finney said he has convinced a few more Michigan companies to buy supplies from businesses in the state instead of crossing state lines for supplies. “We’re not trying to pick any particular sectors. We’re trying to be open to all sectors,” he said.
But Finney said getting the word out about the state’s business climate isn’t easy. At the recently held Pure Michigan NASCAR event at the Michigan International Speedway, Finney said a dozen business site-selection consultants attended the race as MEDC guests. He learned that the consultants don’t suggest sites for businesses to consider; rather, they told him they eliminate locations from consideration. He asked if Michigan was on their elimination list, and the answer he received surprised him.
“We weren’t even on their radar screens, so we couldn’t be eliminated,” he said. “Site consultants are very important. We’ve got to get on their radar screens.”
Finney also said Michigan isn’t as well known nationally as it should be for all the software that is produced by Metro Detroit firms.
Finney said the Snyder administration’s goals are to lower the state’s unemployment figure to a number that puts Michigan in a group of 10 states with the lowest number of unemployed workers, and to raise the state’s gross domestic product to the top 10 of states nationwide. He said that revival would be led by the private sector, but he added that changes have to be made if the goals are to be reached.
“If we don’t figure out how to be a knowledge-based economy,” he said, “we don’t have a prayer.”