State approves $2.6M for Metro Detroit auto research expansions
Two automotive research and engineering companies plan to expand their operations in Metro Detroit following state approval on Tuesday of $2.6 million in grants for the projects.
The Michigan Economic Development Corp.'s Michigan Strategic Fund board approved grants to KPIT Infosystems Inc. and Subaru Research and Development Inc. to beat out incentive offers from other Midwestern communities. The projects combined would invest up to $51 million in Novi and Van Buren Township, and would create 272 jobs.
"Seventy-five percent of all automotive research and development in North America happens here," said Jeff Mason, CEO of the MEDC. "It's not only our heritage but also our future. These two projects are continuing in this tradition."
KPIT and Subaru join a number of foreign automakers who are expanding investments in southeast Michigan. Joining Ford Motor Co. and AT&T, Hyundai has invested in the American Center for Mobility, a 500-acre driverless car proving ground at Ypsilanti’s Willow Run that opened in December. Hyundai-Kia as well as Nissan Motor Co. and Toyota Motor Corp. all have growing tech centers nearby, too.
The Ann Arbor-based Subaru subsidiary is investing up to $48.2 million in a technical innovation center in Van Buren to develop safety and environmental advances for future vehicles. Subaru plans to open the 150,000-to-200,000 square-foot facility on 76 acres of vacant land in 2022. It would create 101 new jobs for Michigan residents.
Subaru joins Amazon.com, Brose North America and Penske Logistics in investing in vacant acres in Wayne and Washtenaw counties surrounding Detroit Metropolitan Airport. Detroit Region Aerotropolis Development Corp. has emphasized the location's proximity to the airport, freeways and railways in its attempts to bring commercial activity to the area.
"This is right along Michigan Avenue," said Khalil Rahal, Wayne County's economic development director. "It wasn’t that long ago that Bill Ford stood on a stage and said the future of our region is along Michigan Avenue. They're bringing in autonomous vehicle folks and talent to Corktown, and Subaru is basically doing the same thing in Aerotropolis."
The strategic fund granted the company $1.5 million for the project for road improvements, wetland mitigation and environmental remediation. Van Buren also is assessing real property tax cuts. According to a memo to the Michigan Strategic Fund board from Matt Chasnis, MEDC business development project manager, Subaru also considered sites in Indiana, home to the automaker's only U.S. manufacturing plant, and Ohio, which had offered a "robust" incentive package.
"When given the opportunity, we can stand up and compare against other metropolises," Rahal said. "There's still battles we win. That's a testament to the state and to the county."
KPIT is an India-based, $500 million global product engineering and solutions company focused on the automotive industry. The company is increasing its Michigan presence from 280 employees to 451 research and design employees with a $2.8 million investment in Novi.
Rajeeb Nath, KPIT senior vice president and global head of automotive and transportation, said the positions are for experienced systems and software engineers as well as new graduates. Work will focus on the development of powertrain, connective systems, infotainment and autonomous driving.
"It is the right environment and time," Nath said. "The market demands are there. For the automotive industry, there is a pool of automotive talent that can be found in Michigan, and it's important that we continue to expand."
KPIT's expansion would begin at its current location at 28001 Cabot Dr. and then help it to grow to an existing leased facility that KPIT is in the processing of finding.
Michigan's $1.1 million grant would assist with programming training. Nath said new hires undergo a three-month course to bring them up-to-speed on automotive electronic technologies. The City of Novi has said KPIT can use its videography team for recruiting videos. The state grant also would help with obtaining a ready-built facility and installing technology.
According to the economic development corporations, Michigan competed with Indiana and Iowa for the investment. Nath said it chose to expand in Novi because of the talent, proximity to automakers and the state's financial support.
The MEDC also approved tax abatements for a mixed-used building in Grand Rapids and a hotel in Flint. Uptown Reinvestment Corporation, 352 SS LLC and other entities plan to historically renovate the former Genesee Bank building in Flint's downtown into a new Hilton Buckham Square hotel for nearly $38 million. The building, which has stood vacant for almost two decades, Mason said, would be the first hotel to open in the city since 1982.
All four projects would contribute more than 300 new jobs and more than $100 million in private capital investment.