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Michigan Magnet Fund |
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The MEDC and MMF used $25 million Qualified Equity Investment by MMF ($15M) and the Brownnfield Redevelopment CDE ($10M) to induce Whirlpool Corporation, a Fortune 500 firm to build the first phase of a 250,000 square foot office complex in downtown Benton Harbor on approximately 13 acres to support the staff of its North American Regional business operations; this is in addition to an approximate $20 million investment in current facilities in the nearby suburbs. The project will maintain 868 jobs in the region and will shift the jobs and tax base from a surrounding location to strengthen a New Market Tax Credit qualified Low Income Community. The Leveraged Loan was provided by Whirlpool. The first phase of this project will move over 400 jobs downtown into Benton Harbor to help establish a foundation for a new urban economy |
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The Fortune 500 firm sought an intial NMTC Qualified Equity Investment of $25 millionin addition to state incetives as a condition of of its new location. The Michigan Magnet Fund is providing $15 million in Qualified Equity Investment while Brownfield Revitalization is providing $10 million in QEI. JP Morgan Chase is providing the equity financing to the CDEs. Community Benefits The project is supported by Benton Harbor’s master plan and has created new enthusiasm from surrounding development; Benton Harbor has become an example of rebirth. For example, The Boys & Girls Club with strong financial support from Whirlpool Corporation has made a commitment to build a state-of-the-art facility to benefit youth in the community |
The $500 million Harbor Shores development is less than ½ mile north of this proposed site on the western border of the City. MMF helped finance the 530-acre development located north of the Main Street corridor and follows eastward it into the central downtown known as the Arts District. Harbor Shores is an example of the benefits provided by investment as this area has seen improvements the return of businesses. |
Michigan Magnet Fund Wins $25 million New Markets Allocation Donna Gambrell, Director of the CDFI Fund, on February 24th, announced that the Michigan Magnet Fund will be awarded a $25 million of 2010 New Market Tax Credit allocation for investment in eligible businesses in low income communities throughout the state of Michigan. This is MMF's third award bringing the total awarded to MMF to $145 million. It received its first award in 2005. MMF must invest a minimum of $6.25 million of its allocation in nonmetropolitan (rural) counties In addition Great Lakes Capital Fund received an allocation of $46 million for their 4 state region, LISC received $70 million for its national strategy, and PNC received $53 million for its footprint including Michigan. MMF is requesting its clients and board members and partners to update its pipeline information. The MMF Board of Directors will select an estimated three job creating projects in the next few weeks. |
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MMF is pleased that they are able to provide additional investment to the state. Ted Rozeboom serves as Chair, Mark McDaniels as Vice Chair, and Mark Morante of MEDC as its Secretary.
It is presently estimated that MMF will have a signed allocation agreement by the first week of March and MMF can start doing deals. In the meantime anyone interested in a new market tax credit investment should complete the Preapplication and submit it to MMF by either e-mail or snail mail. The Board of Directors will be announcing its selection criteria in the next month. The key priority will be JOBS, JOBS, and more JOBS in that order of priority. In order to be competitive for the allocation, MMF has agreed to focus on areas with higher distress levels and to allocate 30% of its investment to business ventures. The eligibility criteria will be published on this web page as soon as they are formalized. A list of all CDEs selecting Michigan for investment are shown below. |
MMF Invests $10M in Renewable Energy Project To Preserve UP Jobs
The Michigan Magnet Fund announced its $10 million investment in a $50.2 million Verso Paper Renewable Energy Project in its Quinnesec Plant in the Upper Peninsula. The project will meet 95% of its energy needs using renewable biomass sources. The project will make the plant cost competitive in an ever increasing competitive commodity market and keep 475 people working in the facility. An additional 50 persons are projected to be hired by local small businesses that will supply the biomass. MMF is a certified community development entity who won a $60 million in new market tax credit investment allocation from the CDFI Fund. MMF has invested $82 million in 12 projects in low income distressed neighborhoods in 8 cities in Michigan. MMF was joined by the Local Initiative Support Corporation and CapFund New Markets LLC who invested $17 million and $5 million respectively to provide a total Qualified Equity Investment of $32 million. JP Morgan Chase through its subsidiary purchased the new market tax credits from the three community development entities for $8,984,700 to permit them to make investments that are more flexible than market. “The implementation of the Quinnesec Renewable Energy Project is in alignment with Verso’s three-pronged energy strategy, which is to reduce overall energy consumption, generate more green energy from renewable biomass and reduce our carbon footprint, all while reducing costs,” said Mike Jackson, Verso’s President and CEO. “This investment is an important part of Michigan’s commitment to its rural areas. It not only makes our basic industry more competitive but does so by developing and using renewable resources and reducing Michigan’s dependence on fossil fuels. MMF can only invest in projects that could not obtain the financing from any other source.” Said Ted Rozeboom, President of MMF. |
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MMF Invests $12M in Motion Picture Studio for 3600 Jobs
The Michigan Magnet Fund invested $12M as part of a $59.2M Consortium of CDEs in the Michigan Motion Picture Studio in Pontiac. The project is projected to create an estimated 3,400 new jobs as part of building the new industry. MMPS has acquired and will renovate a closed 368,400 square foot GM plant while adding seven sound stages in a new building of roughly 185,000 square feet. The firm already has an overwhelming number of contracts and has been looking to expand operations. The project will serve the growing needs of the Michigan Film industry by becoming Michigan's only full-service film business facility. In addition to preproduction, post-production, and full-production capabilities, the project will feature education and training facilities serving the state.
MMF was supported with New Markets Tax Credit investments from US Bank CDE,Stonehenge CDE, and Fifth Third Bank CDE
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for a total of $59.2M. The project had the additional support of a $30M recovery bond from Oakland County, an $18M insurance from the State Employer pension Fund and $17M in film tax credits from the state of Michigan. US Bank provided the equity investment in the Investment Fund
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MMF Closes |
10 Cities - 6 Historic -
14 Michigan Brownfield - 5 Mixed Use -3 Rural - 1 Land Development |
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The Michigan Magnet Fund has closed 13 New Market Tax Credit Projects by allocating $91.0 million of its Qualified Equity Investment. The projects are in 8 cities and include: 8. Bicycle Factory - Grand Rapids is a $4 million QEI investment into a historic rehabilitation and transformation of this former factory into a mixed use facility. Fifth Third Bank is the QEI investor in MMF. However, within one week of the closing the building |
was completely destroyed by the largest fire ever seen in the City. It was restructured from a historic rehabilitation to a larger new construction. It is operating successfully. 9. Studio One - Detroit is a $5 million investment by Fifth Third Bank in the MMF toward this $18 million project toward a mixed use development in the City's Cultural Center and will provide 128 market rate apartments on land leased from
Wayne State University. This project closed in May, 2007. It also has a state brown field tax credit. 11. Michigan Motion Picture Studio - Pontiac is a $12 million investment using leveraged debt provided by the sale of Michigan Film Tax Credits and NMTC equity provided by US Bank. The project is located in a very distressed area and MMF was joined by 3 other CDEs for this $59.4 million NMTC investment and is expected to create 3400 jobs. 12. Lofts on Ludington - Escanaba is a complex $5 million project with a $4 million QEI mixed use, it takes a village development using leverage financing from a community bank, MSHDA CDBG funds, a City loan and NMTC. The NMTC Equity was provided by The Bank of Holland. 13. Verso Renewable Energy - Quinnesec in the rural UP is a $50 million project that will permit the paper plant to use renewable biofuel which will make its plant more competitive to preserve its 480 jobs and add at least 50 new jobs in new suppliers that are being developed. This took 3 CDEs with MMF providing $10 million of the total $32 million in QEI. Verso provided the leveraged debt. 14. Heart of the City - Grand Rapids is a new $23.8 million facility that will permit the merger of three health care organization to provide health care services to the poor of the City. MMF is investing $9 million of the in QEI with PNC providing the leveraged debt and NMTC Equity. 15. Whirlpool - Benton Harbor is a project to induce Whirlpool to consolidate its operations in the City and keep its jobs there and act as a catalyst for the development of the distressed City of Benton Harbor. MMF is providing $15 million in QEI toward the total $25 million QEI. The NMTC equity was provided by JPM Chase and the leveraged debt by Whirlpool. 16. Seidman Center - Grand Rapids uses $7.0 million QEI into a building that will house expanded operations of all of the resource organizations serving Western Michigan small businesses and ntrepreneurs and the new Grand Valley State University Business School. The total QEI from 3 CDEs was $22.5 million 17. Hamtramck Recycling Center - Hamtramck was provided a QEI of $5,750,000 and is a industrial waste recycling center that will employ 60% of it employees must be low income since the project must meet a target population requirements. The site is ina 100% industrially zoned census tract with a master plan for future industrial use. |
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13342 Sherwood Drive, Huntington Woods, MI 48070 313 445-1843, fax-432 204-1431
e-mail address bogdanaa@aabds.com
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