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U.P. economic development incentives continue absent new legislative action

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Shoreline of Lake Superior in the Upper Peninsula.

A projected billion-dollar development project in the Upper Peninsula got approval for financial incentives from the state Tuesday.

The paper company, Billerud, had partnered with Delta County to ask the Michigan Strategic Fund Board for a Forest Products Processing Renaissance Zone designation. Briefing materials suggest that would be worth $29.4 million over the course of a 15-year span.

Company Deputy President and General Counsel Kevin Kuznicki told the strategic fund board the move will support a pivot to making carton board rather than just graphic and specialty papers.

“Today’s request is an important step to enable the company to invest up to a billion dollars at the Escanaba mill. And in turn change the future of that mill from a declining growth market to a growing market in the North American segment,” Kuznicki said during Tuesday’s meeting.

Michigan Economic Development Corporation CEO Quentin Messer Jr. said the move will help cover an expansion to allow for new equipment at the plant.

In turn, the state said the added competitiveness will help save around 1,240 jobs. But officials are uncertain about job creation numbers.

“The important thing to think about is whenever you are able to retain a job, you are better positioned for future growth and the possibility for future jobs. And so, I think retaining jobs are a necessary precondition,” Messer said Tuesday.

The Billerud project was the subject of rumors surrounding a large-scale spending deal that didn’t get done before state lawmakers went home last week.

Roughly $200 million in government money was purportedly on the table to attract the investment.

Any possible new major legislative spending package will have to wait until the new Legislature convenes next month.

“We have men and women who answer the call to public service. Let’s let them get into office. Let’s let them assume their rolls and we’ll see what happens. But I think it would be premature to discuss any additional incentives,” Messer said, recentering focus on the renaissance zone designation.

Tuesday’s strategic fund board meeting also saw the automotive tech company Lear Corporation get approved for a $4.5 million grant, as well as up to $1.9 million in other incentives.

That’s for the growth of its electric vehicle battery part operations in Oakland, Grand Traverse, and Macomb Counties. The state expects the majority of the company's projected $112 million investment to go to a plant in Independence Township.

Messer said Michigan had competition for the investment.

“It was quite keen to compete with their facilities in Mexico. Texas also put in an aggressive offer. This is important because Lear’s been here since 1917 and we can’t take for granted that if we don’t go out and earn it every day that they’re going to be here for over another 100 years,” he said.

Officials expect the Lear Corporation project to create up to 500 new jobs.

Other projects approved for incentives include a planned multi-use industrial site in Marquette, water infrastructure improvements in St. Clair County, and a battery testing facility in Auburn Hills.

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Colin Jackson is the Capitol reporter for the Michigan Public Radio Network.
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