FY2014 MSF-MEDC Annual Report Revised
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MEMORANDUM DATE: February 17, 2015 TO: The Honorable Rick Snyder Governor of Michigan Members of the Michigan Legislature SUBJECT: FY 2014 MSF/MEDC Annual Report Attached you will find the annual report for the Michigan Strategic Fund and Michigan Economic Development Corporation as required in the Michigan Strategic Fund Act, 1984 PA 270, and budget boilerplate. This report summarizes the activities and programmatic spending for fiscal year 2014. In an effort to consolidate legislative reporting, the attachment also includes the following reports: • A revised Michigan Business Development Program annual report (pages 6-11) – PA 270 of 1984, the Michigan Strategic Fund Act, Section 88r (MCL 125.2088r) • Business Incubators and Accelerators annual report (pages 28-29) – PA 252 of 2014, the General Government Omnibus Budget, Section 1034 • A revised Michigan Community Revitalization Program annual report (pages 57-61) – PA 270 of 1984, Section 90d (MCL 125.2090d) • Core Community Fund annual report (page 66) – PA 252 of 2014, Section 1014(2) • Urban Land Assembly annual report (page 67) – PA 171 of 1981, the Urban Land Assembly Act, Section 9 (MCL 125.1859) • Michigan Film Incentives and Tax Credits annual report (pages 74-75) – PA 252 of 2014, Section 1032 and PA 36 of 2007, the Michigan Business Tax Act, Section 455 (MCL 208.1455) • Skilled Trades Training Program annual report (pages 82-89) – PA 252 of 2014, Section 1039 • Workforce Training Programs annual report (page 94) – PA 252 of 2014, Section 1068 • Michigan Community Colleges Awards Conferred annual report (pages 95-96) – PA 252 of 2014, Section 1050(3) • North American Indian Tuition Waivers annual report (pages 97-100) – PA 252 of 2014, Section 1050(2) • Jobs for Michigan Investment Fund annual report (page 111) – PA 252 of 2014, Section 1010 • Business Development, Community Revitalization, and Film Incentives Performance Metrics annual report (pages 12, 62 and 76) – PA 252 of 2014, Section 1007(2) If you have any questions regarding this report or need additional information, please contact Joel Freeman in our Office of Governmental Affairs at 517.335.1847. Attachment cc: John Roberts, State Budget Director Ellen Jeffries, Director, Senate Fiscal Agency Mary Ann Cleary, Director, House Fiscal Agency 2014 MSF/MEDC Annual Report to the Legislature FISCAL YEAR FISCAL MEDC FY 2014 TABLE OF CONTENTS Executive summary 3 Michigan Renaissance Recovery Zone program 53 Michigan Automotive Office 5 Michigan Tool & Die Renaissance Recovery Zone program 55 Michigan Business Development Program 6 Community assistance and development 56 MBDP Section 1007(2) program performance metrics 12 Michigan Community Revitalization Program 57 Michigan Supplier Diversification Fund 13 MCRP Section 1007(2) program performance metrics 62 SSBCI 14 Community Development Block Grant program 64 Small Business Capital Access Program 16 Core Community Fund 66 Private Activity Bonds 21 Urban Land Assembly 67 21st Century Investment Fund program 22 Brownfield edevelopmentR program 68 Accelerator Fund 24 Brownfield Tax Increment Financing 69 Pure Michigan Venture Development Fund 25 Michigan Council for Arts and Cultural Affairs 71 Capital Conduit program 26 Michigan film incentives 72 Michigan Income and Principal-protected Growth Fund 27 Michigan film incentives—tax credits program 74 Business incubators and accelerators 28 Michigan Film Office Section 1007(2) program performance metrics 76 Early Stage funding 30 Talent enhancement 77 Michigan Transitional Research and Commercialization program 31 Community Ventures 79 Pure Michigan Venture Match Fund 32 Skilled Trades Training Fund 82 University Technology Acceleration Workforce Development Agency 90 Commercialization program 33 Michigan community colleges Entrepreneurial support services 34 awards conferred 95 Export program 36 North American Indian tuition waivers 97 Pure Michigan Business Connect 46 Travel Michigan 101 Michigan Defense Center 47 Business marketing 106 Michigan Energy Office 49 MSF/MEDC expenditures 110 Tribal business development 51 Jobs for Michigan Investment Fund—Permanent Fund 111 Michigan Economic Growth Authority 52 MSF/MEDC annual report to the Legislature / FY 2014 / 2 MEDC FY 2014 EXECUTIVE SUMMARY The Michigan Strategic Fund (MSF) is required to The venture capital community in Michigan is submit an annual report to the Michigan Legislature outpacing the national trend with 23 venture capital summarizing activities and program spending for the firms managing $1.6 billion in capital. Michigan ranks previous fiscal year. This requirement is contained in the top 10 nationally for relevant venture ecosystem within the Michigan Strategic Fund Act (1984 PA 270) drivers such as PhDs graduated, R&D spending, and and the budget boilerplate. The MSF board has granted SBIR awards and patents awarded. In 2014 MEDC authority to the Michigan Economic Development launched a micro lending initiative in conjunction Corporation (MEDC) to provide administrative services with Huntington Bank. The private/public partnership to the MSF for a variety of programs overseen by the is focused on initiatives to increase lending for small MSF. The MEDC serves as the state’s marketing arm and businesses that might not otherwise be able to secure lead advocate for business growth, jobs and opportunity bank-backed financing. with a focus on helping grow Michigan’s economy. Michigan needs vibrant places to live and play in For two years in a row Michigan was ranked among order to attract and retain the talent workforce needed the top five states for major new corporate facilities and to grow Michigan businesses. Community vitality is expansions by Site Selection magazine. Michigan’s new core to the state’s economic development strategy economic development toolkit includes services for which aims to facilitate the reinvigoration of cities and procurement, export, real estate development, talent villages across the state. and capital and focuses on three pillars to drive specific An innovative matching grant initiative was results: accelerating business investments, increasing launched to help drive public space projects in community vitality, and matching talent supply with Michigan communities. Public Spaces Community demand. These pillars, along with the Pure Michigan Places is the first program of its kind in the nation image and branding, provide a strong foundation for where local residents, businesses and others can pool increased job growth and investment in Michigan. resources and actively engage to transform public The MEDC’s approach to accelerating business spaces in their communities. Crowdfunding is an investment in the state is centered on providing easy and innovative way for community projects to high-value services to retain, grow and diversify gain public interest and raise money by leveraging existing Michigan companies. From strengthening donations of all sizes. Michigan’s global automotive and manufacturing With the state’s fourth largest high-tech workforce innovation leadership to ensuring the availability of in the country, Michigan has one of the richest talent key entrepreneurship services to leverage technology pools. The “talent enhancement” pillar of the economic commercialization, the MEDC places a strong development strategy addresses the opportunity to emphasis on business investment as one of the pillars match Michigan’s extraordinary workforce with the of the state’s economic development strategy. jobs available today and tomorrow. To further elevate Michigan’s global leadership in the The award-winning Michigan Advanced Technician automotive industry, the Michigan Automotive Office Training (MAT2) program was launched in FY 2014 was established within the MEDC in FY 2014. In its to connect students with employers, who provide first year the office developed a 30-year strategic plan tuition and paid apprenticeships in exciting, growing with input from more than 25,000 stakeholders locally fields. The program quickly expanded to add three and globally. The MEDC and the Michigan Automotive mechatronics cohorts and two occupational programs, Office played a critical role in securing a $70 million with plans to expand further in future years. federal award for the American Lightweight Materials The Community Ventures program, an initiative that Manufacturing Innovation Institute, a $148 million promotes employment and social enterprise by placing high-tech manufacturing research institute that is structurally unemployed residents into full-time, expected to bring 10,000 jobs to the state within the long-term employment, continued in FY 2014. Since next five years. its inception in FY 2013, Community Ventures has MSF/MEDC annual report to the Legislature / FY 2014 / 3 MEDC FY 2014 EXECUTIVE SUMMARY continued connected over 2,600 structurally unemployed persons entrepreneurship, talent attraction and retention. with over 100 companies and has established several The campaign continues to be recognized by peers in sustainable public/private partnerships to promote job other states and the travel industry. Pure Michigan creation and employment in economically distressed took home the 2014 Effie Award for “Sustained communities and promote community engagement Success” in advertising. and connectivity. To date, more than 400 Michigan companies and The Skilled Trades Training Fund facilitates on-the- organizations have incorporated the Pure Michigan job training, bridging the gap between in-demand jobs logo into their