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Shovel-ready state? Push on for site-prep money after Ford plants head south

Gov. Gretchen Whitmer’s administration, economic developers and industry groups are pushing for the creation of a $100 million fund for industrial development on large tracts of land after Tennessee and Kentucky landed $11.4 billion in investments from Ford Motor Co. and a battery maker.

The $100 million would give the Michigan Economic Development Corp. a pot of money to assemble land and pay for planning, engineering, traffic studies as well as infrastructure and utility improvements to make so-called megasites shovel-ready.

Executives at DTE Energy Co. (NYSE: DTE) and Consumers Energy Co. (NYSE: CMS) told Crain’s that both utility companies are in talks with MEDC officials about how to better coordinate direct marketing of large-scale industrial sites, particularly for future battery plant projects that require a high volume of electricity.

“There are discussions at the state level of making funding available for preparing sites for the future and, at DTE, we support that 100 percent,” DTE Energy CEO Jerry Norcia said in a phone interview. “If the governor and the Legislature want to create funding streams to make sites available, I think that would be a huge opportunity.”

The proposed fund was already part of Whitmer’s broad MI New Economy initiative before Ford shocked the governor’s office, lawmakers and suppliers like DTE in deciding to build two gigantic electric vehicle and battery plant campuses on large sites already groomed for speedy development in western Tennessee and central Kentucky.

Both southern states have reportedly spent millions of dollars prepping a 3,600-acre tract of land one hour northeast of Memphis and a 1,500-acre site south of Louisville, Ky., for fast construction of large industrial facilities.

Michigan economic planners acknowledged last week that Ford’s home state has almost no similar shovel-ready sites to market to automakers looking to make a big bet on electrification of vehicles.

“We don’t have 2,000-acre sites sitting around,” said Maureen Donohue Krauss, CEO of the Detroit Regional Partnership, the 11-county economic development organization.

Despite having vast tracts of farmland along interstate highways that connect to international crossings in Port Huron and Detroit, the state has lacked a policy initiative for buying the development rights of contiguous tracts of land that can be marketed for new vehicle or battery assembly plants, said John Walsh, CEO of the Michigan Manufacturers Association.

“We have not focused a lot on that,” said Walsh, a former GOP state legislator and budget director under former Gov. Rick Snyder. “There are regional efforts, there are local efforts, but not even on a scale half of what they’ve done in Kentucky and Tennessee.”

While acknowledging Ford’s decision to pass up its home state may have been “site specific,” Whitmer said Ford didn’t give Michigan a “real opportunity” to make a bid for one or both of the projects.

Ford spokesman Martin Günsberg said the Dearborn-based automaker’s site selection factors included the amount of land needed in proximity to highways and railways that was “shovel ready.”

“Michigan did not have the type of sites needed for this project, so they were not part of the formal bid process,” Günsberg told Crain’s.

Whitmer’s new MEDC chief, Quentin Messer Jr., tried to downplay Michigan’s inability to compete for the 11,000 new jobs Ford and SK Innovation intend to create between the two southern states.

“Sure, we would love to have all of Ford’s investments in Michigan, but this is only one announcement,” Messer told reporters. “Ford remains a vital part of the Michigan business community.”

‘Not ready for business’

Krauss said the Detroit Regional Partnership is working on creating its own catalogue of 200 build-ready sites for industrial use of 5 acres or more within its region, which extends north to Shiawassee, Genesee, Lapeer and St. Clair counties and south to Lenawee and Monroe counties along the Ohio border.

The sites will be classified as Verified Industrial Properties or VIP, Krauss said.

But Krauss cautioned that such a list of properties can’t be assembled overnight. Piecing together a 1,000-plus acre site often takes years to secure options to purchase multiple parcels of land, Krauss said.

“No one wants to have to come in and negotiate with 40 property owners,” Krauss said. “Our goal would be to have three to five of those (megasites) in the Detroit region in the next few years.”

Jackson-based Consumers Energy maintains a catalogue of “energy-ready” properties in its electric service area outside of DTE’s Southeast Michigan service area.

That catalog for site selectors includes 354 acres on General Motors Co.’s former Buick City complex in Flint, a 400-acre build-ready site in Delhi Township south of Lansing and a 1,600-acre piece of mostly farm ground near Marshall at the I-69 and I-94 interchange.

“The availability of sites is really a proxy for the speed of which a customer can get up and running,” said Brian Rich, senior vice president and chief customer officer for Consumers Energy. “Having an energy-ready site is crucial when we’re attracting some of these larger businesses that we can actually point to a facility that exists, have them see it and know that if they were to commit to Michigan they would be up and running (quickly).”

While the Marshall megasite may have been large enough to suit Ford’s needs for a pair of battery plants it plans to build in Kentucky, there’s been no pre-development work done to date on ground that remains mostly active farm fields, said James Durian, CEO of Marshall Area Economic Development Alliance.

“It’s a great location and has a lot of potential,” Durian told Crain’s.

The Marshall economic development organization, which has been marketing the megasite for a decade, is working with the MEDC to secure funding to pay for the development of an industrial master plan and traffic impact studies that site selectors need to evaluate a property for their client, Durian said.

“That will inform us of what next steps we need to take to make the site more competitive,” he said.

Walsh, head of the manufacturer’s association, said the lack of pre-assembled tracts of land that are ready for immediate construction of a large industrial complex leaves Michigan less competitive for big deals — even before tax incentives, energy prices and the availability and cost of labor come into play.

“We’re not always ready for business,” he said. “We’re not very aggressive here.”


Posted By: Crain’s Detroit Business on October 3, 2021.  For more information, please click here to read the source article.

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