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State deal helps create auto jobs in Troy, Chelsea

Michael Gerstein
The Detroit News

Lansing — A state board helped sweeten a deal Tuesday that paves the way for an international auto supplier to set up shop in Chelsea, expand in Mason and create jobs in Oakland County.

The Michigan Strategic Fund board approved a roughly $1.6 million performance-based grant to help Spain-based Corporacion Gestamp expand its assembly of auto parts such as chassis, bumpers, doors checks, hinges and pedal boxes in Michigan.

The company’s North America and Asia Pacific President and CEO Jeffrey Wilson said the grant was a major factor in its planned expansions in Chelsea and Mason, which state officials say will create 235 jobs between the two cities and another 60 new positions in Troy — 295 jobs total.

“For Chelsea, it represents the Midwest chassis strategy force,” Wilson said. “So while this business is starting out fairly slow, the overall expectation is we’re going to grow that business into a fairly substantial production location for us.”

The company plans to build chassis for vehicles, an electronic coat paint line and a press-hardening line in Michigan. The firm said it would invest $158 million in its Chelsea and Mason facilities and another $700,000 in its Troy-based North American headquarters, according to state documents.

The new workers in Troy would help with “marketing and promotion assistance,” according to the Strategic Fund.

Wilson said the state incentives are “a big part” of the company’s decision to locate in Michigan as it considered offers from other states.

“It is truly a, I’ll call it, capitalistic approach by the states,” he said. “They understand the importance of their competitiveness. They understand how important that competitiveness is for us, to be awarded new business and to grow our company.”

The announced investment is another sign that Michigan is still the automotive development capital and at the “forefront” of wherever automotive technology may lead in the future, Gov. Rick Snyder said in a Tuesday statement.

“The combination of world-class talent, proximity to automakers and auto suppliers along with our state’s overall economic health presents a compelling case for Michigan as the place to be for businesses looking to achieve global success,” Snyder said.

The Michigan Strategic Fund board also approved a 10-year, $11 million property tax cut for another company that plans to create a new facility in Detroit to supply auto parts to Ford Motor Co.

A company called Flex N Gate LLC wants to buy 30 acres at the I-94 Industrial Park from Detroit that will supply auto parts to Ford. The company does not have space in its plants in Michigan, Indiana, Ohio or Canada, according to Michigan Strategic Fund documents.

The board approved the facility as a new “renaissance zone,” allowing it to avoid $11 million in property taxes to Detroit over the next 10 years at a cost of $1.1 million a year.

In May, the board approved another $3.5 million grant for the company that state officials say will allow it to proceed with its planned plant that would create an estimated 650 jobs and spur a $95 million investment in Detroit.

The new facility would be near 7000 Georgia St. in Detroit.

The state board also approved a $1 million performance-based loan to RecoveryPark and RecoveryPark Farms Inc. to help the nonprofit group hire more farm workers and expand.

The group is planning to acquire another 105 acres northeast of Eastern Market in Detroit. It is working with Detroit officials to get 40 of its planned 105-acre expansion.

“The idea behind the project is to create jobs for people in the city of Detroit that have barriers to employment,” said Gary Wozniak, with Recovery Park, especially ex-convicts or those with mental or substance abuse issues. He said the group tries to use “vacant land in the City of Detroit in a productive way, creating economic opportunities.”

Wozniak said the nonprofit supplies specialty vegetables for 440 restaurants produced from indoor, climate-controlled greenhouses they can harvest year-round.

He said Chartreuse Kitchen & Cocktails and the Detroit Athletic Club are both prominent Detroit clients.

“When you’ve got that felony on your application it’s definitely a barrier,” said Clinton Borders, who has a felony record and was just hired Oct. 17 by RecoveryPark. “I came home, I got sick. So I had a health issue, so it all helped out.”

The state package will help the nonprofit hire four more employees, Wozniak said.

mgerstein@detroitnews.com