LANSING — Town Center Lake Trust site developments have secured about $1.2 million in state economic development funding and a Lansing defense contractor has a chance to avoid paying back to the State $710,000 for job cuts during the COVID-19 pandemic.
On Tuesday, the Board of Directors of the Michigan Economic Development Corporation’s Strategic Fund voted in favor of Plymouth-based Loc Performance Products, Inc.’s forbearance application. The company received a state grant to create hundreds of jobs in 2018, but was grounded by the pandemic.
The board also approved a brownfields work plan, including a state tax garnishment of $1,283,110 for developments at 501 and 503 S. Capitol Ave. City View Apartments is being built at 510 S. Capitol and another mixed-use development is being built at 503 S. Capitol.
“Through these project initiatives today, we remain committed to ensuring that Michiganders across the state feel the impact of our efforts to grow Michigan’s economy and support vibrant communities for years to come. coming soon,” MEDC CEO Quentin Messer, Jr. said during a press briefing. Tuesday morning.
Loc takes longer to create jobs
Loc creates mechanical systems, fabricated structures and armoring products for the defense and commercial industries. It has facilities in Plymouth, Lansing, Lapeer and St. Marys, Ohio.
In June 2018, Loc received a $7 million performance-based grant from Michigan’s Business Development Program to create 700 new jobs, above a base-level employment requirement. of 470. This was a planned investment of $71.5 million in Ingham County, according to an MSF briefing note.
The company’s schedule called for the creation of a minimum of 140 jobs by October 2019 and the creation of a total of 700 new jobs by October 2023, according to the plan agreement.
The company successfully completed its first milestone in March 2020, receiving a disbursement of $1,680,000 in grant funds according to the memo.
However, the company said in its fiscal year 2020 progress report that it cut 54 new jobs. A Notice of Default was issued in October 2020, giving the company 180 days to resolve the default. The period expired in April 2021 and the company was unable to restore the jobs, according to the memo.
In follow-up discussions with MEDC’s compliance team, the company said it cut a total of 71 jobs, resulting in the refund of $710,000.
In its vote on Tuesday, the board voted to delay Loc’s obligation to repay the funds until June 2023 and to extend the company’s timeline by about five years to create jobs and grant grants. disbursements.
The company now has until June 30, 2028 to create at least 525 new cumulative jobs with a maximum of 700.
The company will pay a $70,000 forbearance fee, the memo says.
A call to the Lansing plant and a voicemail for Loc’s chief operating officer, Jason Atkinson, was not immediately returned.
As the U.S. Army’s prime defense contractor, Loc competes with traditional defense contractors to win long-term contracts to support major ground-based combat weapons systems programs. COVID-19 presented many challenges, including requiring all employees to be vaccinated last January, which created additional hiring challenges, the memo said.
As of Tuesday morning, the company had about 70 different positions for four facilities listed on its website, including 21 for the Lansing facility.
The company has taken steps to be competitive in today’s economy, including increasing salaries, seeking recruitment support from staffing agencies, offering signing bonuses, offering career paths with training opportunities to increase employee skill levels and implementing additional cleaning and safety protocols, according to the memo.
Messer said the MEDC has a rigorous due diligence process for auditing companies, taking fiduciary responsibility for taxpayers’ money very seriously.
There are performance-based agreements and if a company can’t meet deadlines after doing their best, the agreements can be changed, but the company still has to make a promise to perform, Messer said.
“So it’s not a mulligan where you don’t have to play, you still have to play,” he said. “We’re just changing the timing of that.”
Lake Trust developments move forward
The board also approved the state tax capture for the development of the former Lake Trust Credit Union headquarters.
The seven-story building is undergoing a complete renovation and will house 55 new multi-family residential apartments and commercial spaces. Its new sister building in the old credit union parking lot at 503 S. Capitol Ave. will include 117 units and a parcel of site will also include a new performing arts center.
The total capital investment for the two mixed-use buildings is expected to be approximately $49 million.
Messer said the building at 501 S. Capitol Ave. is expected to be completed in December and that the building at 503 S. Capitol Ave. should be completed in August 2023.
He said these community development projects will address critical housing needs in the heart of the capital and provide public improvements to curbs and sidewalks.