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Ann Arbor Spark

March 9, 2020

Michigan’s Business Development Program

The Michigan Business Development Program (BDP) is a tool used to encourage job creation and investment in Michigan when the company could choose a location elsewhere and Michigan wants to be competitive.

What is it (in two sentences or less)?

A performance-based cash grant to encourage job growth in Michigan vs. another location. Used by Michigan Economic Development Corporation (MEDC) on behalf of the state to encourage companies to grow in Michigan.

How do companies qualify?

Companies that are expanding its team by more than 25 new jobs within the next three years, and have options to locate outside of Michigan. The program is competitive and not every project may qualify. Eligibility is focused on companies involved in:

  • Manufacturing
  • Technology
  • Life science
  • Advanced computing
  • Advanced materials
  • Biotech
  • Electronic device technology
  • Engineering or laboratory testing related to R&D
  • Advanced vehicles technology
  • Technology that assists in the assessment or prevention of threats or damage to human health or the environment

What is the award amount?

It depends on each project, and the MEDC looks at several factors when considering levels of support, including the wages of the project (compared to the rest of the area) and the impact the project may have (in terms of size or for another strategic factor for the state). The program is competitive and not every project may qualify. In our experience, awards tend to be $5,000 – $10,000 per new job created.

Who decides?

The Michigan Strategic Fund (MSF) board approves this incentive. The Michigan Economic Development Corporation (MEDC) makes recommendations to that board and handles the application process for companies looking to utilize the tool.

What is the process?

This is a high-level outline of what is required to receive funding through the Business Development Program. SPARK has assisted dozens of companies through the process and works proactively with companies and our partners at the MEDC to successfully finalize this incentive tool. Please contact us if you’d like to learn more, or apply for this incentive.

  1. Connect with the MEDC or Ann Arbor SPARK to discuss a potential expansion or location in Michigan.
  2. Share specific information about the project with the MEDC, including the number of new people being added, the amount of capital investment, wages, and other location options for the project.
  3. If the project qualifies and funding is available, an offer letter which outlines the potential award is provided to the company.
  4. Once the letter is signed, the company fills out an official application for the program, which includes background checks, financial information, and other project details.
  5. The MEDC staff develops a terms sheet that outlines the award amount and the milestones, which are usually based on hitting certain job creation requirements, to earn the award.
  6. Once the terms sheet is agreed to, the MEDC staff prepares the project for consideration by the Michigan Strategic Fund board. While awards that are less than $1 million can be signed by an MSF designee, awards that are greater than $1 million need to be approved at a monthly MSF board meeting in Lansing.
  7. Once approved, the company files milestone reports to request cash disbursement.

Local example projects that have used BDP:

  • KLA R&D location in Ann Arbor Township
  • Cayman Chemical in Pittsfield Township
  • LLamasoft in Ann Arbor

Where can I learn more?

Contact Phil Santer for more information on this tool.

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