Make It In Michigan Fund — SOAR Reform Package, A New North Star
Summary
Testimony document titled Make It In Michigan Fund SOAR Reform Package, proposing to reform the Strategic Outreach Reserve Fund (SOAR) so economic development aligns around prosperity goals for Michiganders, not just landing projects. It cites US News & World Report's 2023 analysis placing Michigan 41st in the nation. It describes the Make It In Michigan Fund as made up of three programs: Michigan 360, the Critical Industry Program and the Michigan Strategic Site Readiness Fund. Michigan 360 would be required to be at least 20% of all offer packages, and the proposal adds disclosure of offers to the legislature and strengthened clawbacks.
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“Make It In Michigan Fund — SOAR Reform Package, A New North Star.”
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MAKE IT IN MICHIGAN
FUND
SOAR Reform Package
A NEW NORTH STAR
Economic development can no longer exist in a vacuum.
Michigan has had an inconsistent history with economic
development tools and spending through multiple administrations
– the results haven’t led to increased prosperity for Michiganders.
With an aging and declining population, and declining median
income, it’s time to reimagine the largest economic development
tool: SOAR, to align around prosperity goals for Michiganders, not
just landing projects.
In national rankings which consider outcomes for
residents – NOT projects – Michigan has fallen behind
In US News & World Report’s 2023 analysis, which ranks states utilizing
71 different rankings across 8 categories, Michigan is near the bottom at
41st in the nation. Only one Midwest neighbor appears in the Top 5 –
Minnesota, at 5. View the full report here: 2023 State Ranking
Placeholder BLM slides: where residents are moving
Who Our True Competitors Are – And Why
MEDC frequently benchmarks Michigan against Midwest and However, Business Leaders for Michigan identified that – of
Southern states based on tools available and projects places Michiganders are moving to – they’re either warm
secured – NOT based on prosperity metrics states (which we can’t do anything about) or tech hubs
(which we CAN do something about)
Who Our True Competitors Are – And Why
The good news for us: we may not be able to make Michigan a warm state, but a
majority of the Top States overall in US News & World Report’s rankings are
actually Northern states…
Making the strong case that we should stop benchmarking ourselves against
warm states and start benchmarking ourselves against Top States.
GOOD NEWS (and a sign to take a
“don’t panic, improve” measured approach to reform)
Michigan is
improving in
overall prosperity
for residents
THE CASE FOR REFORM
While Michigan has been making great strides to become
more inclusive, invest in fundamentals like education,
infrastructure, childcare, healthcare etc. – we know that
systemic changes will take time. Reforming these tools
through a new focus on prosperity and not just projects can
ensure we still attract business investment utilizing smarter
incentives while simultaneously investing in our places and
people to maintain consistency and close the gaps.
A NEW FRAMEWORK FOR ECONOMIC DEVELOPMENT
PROPOSED VISION (LEGISLATURE – FOR ALL ECONOMIC DEVELOPMENT)
Proposed stated goal, Senate: Team Michigan is building a holistic approach to economic development to secure the best future for
all Michiganders, present and future. We understand that economic development can no longer be viewed in a silo, and that the most
successful states are packaging traditional economic development tools with targeted investments in communities, housing, workforce
development, education, and wraparound services - leading to greater success in landing transformational projects while simultaneously
investing in any state’s greatest asset: their people. Our goal is to ensure each and every economic development project that moves
through the state’s pipeline furthers our progress towards the stated goals of the MI New Economy plan and its three pillars:
1) growing the middle class; 2) supporting businesses; 3) investing in Michigan’s communities.
Through holistic, multifaceted offers that combine regional, community and service investment alongside incentive packages, every project
should check the box in moving towards the previously-stated goals of:
● Lifting 100,000 families out of working poverty
● Our 60 by 30 goal to have 60% of Michiganders 25 and up earn a postsecondary degree or skills certificate by 2030.
● Expand access to low or no-cost childcare to 150,000 families.
● Becoming a Top 10 state for small business growth, revenue growth, and venture capital funding.
● Building 75,000 new or rehabilitated housing units
● Ensuring 100% access to high-speed internet in 5 years
And the addition of:
● Raising the median household income for Michiganders
● Increasing our state’s population and workforce
MAKE IT IN MICHIGAN FUND
Every offer package must answer a simple question:
Will this community and Michiganders be better
off after this investment even if the company’s
commitment fails to materialize, the business
decision changes, or the company falls short of
their stated goals?
CASE STUDY:
AMAZON HQ2
Modest tax breaks paired with massive education investment
CASE STUDY:
AMAZON HQ2
A package that won the business and withstands changes in the
economy or business decisions; sets residents/state up to
succeed long-term
A HOLISTIC MODEL THAT WORKS
Direct investments in places and people driving wins
while reducing reliance on incentives or tax breaks
• Intel, Ohio: $25,000,000 - workforce • Hyundai, Georgia: $100,000,000 – education
• Workforce training grants through JobsOhio, New Quick Start Training Center in an
ensuring significant investments in upskilling
existing community college, creating new
workers in a way that will benefit the residents
whether or not they stay with the company educational pipelines for residents
independent of the company
• Micron, New York: $25,000,000 – community, education
• Façade improvements, Syracuse University R&D
program, workforce development and workforce
attraction, plus $100,000,000 to create opportunities
for residents in underserved communities in
Syracuse
PROPOSED LEGISLATION
REFORM SOAR
UTILIZE THE NEW Make It In Michigan Fund
MAKE IT IN
SOAR MICHIGAN
FUND
Make It In Michigan Fund– made up of three
Strategic Outreach Reserve Fund (SOAR) – programs, including direct investments in the
made up of two programs directly benefiting the community and people in the location a potential
company and the company’s site project may be located
• MICHIGAN 360
• Strategic, targeted investments from the state in direct support of the community, placemaking,
• CRITICAL INDUSTRY PROGRAM and people aligned with the needs of the qualified business to promote their success. Unlike
• The Critical Industry Program (CIP) provides qualified investments to qualified traditional Community Benefits Agreements which require the qualified business to fulfill as a
businesses for deal-closing, gap financing, or other economic assistance to create or qualification to receive the incentive, Michigan 360 will be state dollars invested directly into
retain qualified jobs as a result of a technological shift in product or production or
1 qualified expenditures (such as childcare, broadband expansion, education, housing,
1 make capital investments, or both, in Michigan as determined by the MSF board. placemaking, or workforce development) within the sited community
• MICHIGAN STRATEGIC SITE READINESS FUND
• The Strategic Site Readiness Program (SSRP) provides financial incentives to eligible
• MICHIGAN STRATEGIC SITE READINESS FUND applicants to conduct eligible activities on, or related to, strategic sites and mega-strategic sites
• The Strategic Site Readiness Program (SSRP) provides financial incentives to eligible in Michigan, for the purpose of creating a statewide inventory of investment-ready sites to attract
applicants to conduct eligible activities on, or related to, strategic sites and mega-
strategic sites in Michigan, for the purpose of creating a statewide inventory of
investment-ready sites to attract and promote investment in Michigan. Administered
2 and promote investment in Michigan. Administered by LEO on behalf of the Michigan Strategic
Fund (MSF), the SSRP provides access to grants, loans, and other economic assistance.
2 by MEDC on behalf of the Michigan Strategic Fund (MSF), the SSRP provides access
to grants, loans, and other economic assistance.
• CRITICAL INDUSTRY PROGRAM
• The Critical Industry Program (CIP) provides qualified investments to qualified businesses for
deal-closing, gap financing, or other economic assistance to create or retain qualified jobs as a
result of a technological shift in product or production or make capital investments, or both, in
3 Michigan as determined by the MSF board.
MAKE IT IN MICHIGAN FUND
brings to life the high-level economic development vision introduced by
the Governor and legislators at this year’s Mackinac Policy Conference
PEOPLE PLACES PROJECTS
Key investments in Key investments in Site readiness
talent, attraction, the places where a funding and
education, project may be targeted incentives
workforce located, such as as a final step – a
development, or broadband, transit, true ”closing fund”–
human benefits housing, to secure
(such as childcare) placemeking investment in
Michigan
WHAT IS MICHIGAN 360?
A new fund that will leverage economic development opportunities within the total Make It In
Michigan pot that will empower strategic, targeted investments directly in PEOPLE and PLACES
Traditional Community Michigan360
Benefits Agreements required to be at least 20% of all offer packages
• Direct investments by the state into the community aligned with the
• Places ownership of executing the shared goals of the company/project and the community/people
• Empowers the community as a key partner at the start of the process
benefits on the company, leading to anger
• De-risks the outcome for the community: independent Michigan360
and frustration from community if the investments occur even if the company pauses their project, changes
company fails to fulfill the CBA their scope, or fails to materialize
• Flexible based on what community and its people need – such as:
agreements • Water, internet, power or other infrastructure improvements
• Risk that the benefits may never come • Expanded childcare
to fruition if the company’s project • Placemaking improvements for residents
• Programming within local university or community college
changes, is paused, or fails to materialize • Expanded transit to ensure people can get to/from the job
• Building housing to support a growing workforce
MORE PRESCRIPTIVE CRITERIA
designed to increase prosperity and outcomes for people, not just to win projects
SOAR Make It In Michigan Fund
• Overly vague without quantified goals • Requires MSF/MEDC to justify how each projects
for outcomes brings state of Michigan closer to goals laid out
in MI New Economy Plan
• Views each project in a silo without
• Asks how each project brings state of Michigan
asking how said project – and
closer to equity and climate goals
investment of taxpayer dollars – leads • AND requires local criteria laid out in initial
to overall success SOAR legislation, ensuring greater understanding
• Lacks unified strategy for of how singular projects fit into each community
consideration and our broader statewide prosperity goals
TRANSPARENCY AND ACCOUNTABILITY
Requires disclosure Expands MSF to include Prohibits awards to
Of any offers made to a company be legislature companies not in good
disclosed via copies submitted to identified
members of the legislature prior to the offer With 4 appointed non-voting members standing with the state
being made; any modifications to offers must of the Michigan Strategic Fund Board
be disclosed to legislature at the time of Companies with open fines within
– Majority Chair and Minority Vice
modification the state – especially as related to
Chair of committees as determined by
environmental or labor violations –
the Majority Leader/Speaker
not eligible for award
Maintains transfer Strengthened clawbacks
Maintains authority of the legislature to take That returns funding to the General
action on an appropriations transfer vote Fund due to clawbacks or breach of
written agreement, placing increased
emphasis on all parties to use best
judgment when considering offers that
get into the pipeline with realities of the
budget moving forward
ENHANCED REPORTING & OVERSIGHT
Prosperity-metrics Regular evaluation Quarterly Public Updates
oriented annual report Adds Make It In Michigan Fund and MEDC required to present quarterly in
any projects utilizing the programs public via the Economic & Community
Tracking how all projects advance the within (CIP, MSSRF, MI360) to the Development Committee and
state of Michigan towards our shared Economic Incentive Evaluation Act Appropriations Subcommittee, inclusive
prosperity goals for residents of progress updates on all Make It In
Michigan Fund projects
COMPANY A
COMPANY A is meets with MEDC
identified as a – initial meeting on MEDC/LEO build
potential project, size/scope, Make It In Michigan
opportunity for needs, investment offer
Michigan $$, #/type of jobs
etc.
Identifies site/municipality where the project may be best fit
both for the success of the company and the impact to the
economy/growth of the community/region
Engages with local municipality/leadership to work
collaboratively to build an offer, identifying Michigan 360
community investments that align with the company’s
needs and support the residents of the community directly
Funds Funds
transfer released
Ensuring at least 20% of the total Make It In Michigan Fund
offer consists of Michigan 360 investments, MEDC/LEO accepts request from Make It
develop total offer with the addition of Strategic Site submitted to In Michigan
Readiness Fund and Critical Industry Fund
legislature Fund to
MEDC COMPANY A Community
presents offer accepts,
declines, or Begins work on building/fulfilling the committed
to COMPANY asks for
Municipality or local eligible organization receives
Michigan 360 funding
investments in support of the community/goals of the
company per the agreemtn
A modification
Copy of Site Developer/Redeveloper
offer
transmitted Modification
Eligible entity receives funding from Michigan Strategic Begins work on developing/redeveloping the eligible
requested Site Readiness Fund (MSSRF) site per the agreement
to the
legislature
MEDC/LEO
works with Company A
local
Begins clock for company to execute work per the
partners to Eligible entity receives funding from Critical Industry
agreement (pending clawbacks if agreed-upon metrics
Fund (CIF)
modify and are not reached in allotted time)
create a new
offer
THANK YOU!
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