Following the Tuesday approvals by the Michigan Strategic Fund board, the grants through Michigan's business incentive program, the Strategic Outreach and Attraction Reserve Fund, are headed to the House and Senate appropriations committees as soon as Wednesday for a final vote on the transfer of funds.
The $100 million grant for a University of Michigan supercomputing and artificial intelligence lab — set up in partnership with the Los Alamos National Laboratory — is expected to create 200 jobs over 10 years, with the state grant coming to about $500,000 per job. Each job is expected to carry an annual salary of about $200,000.
The $100 million in strategic site readiness program funds will be matched by about $850,000 in university funding and $300,000 in funding through the Los Alamos National Laboratory.
Quentin Messer, chief executive officer for the Michigan Economic Development Corporation, said Los Alamos was considering other locations for the lab, including an expansion at its current location in New Mexico. Los Alamos chose UM because of the research done there, the $100 million commitment from the state and the state's "long-term climate resilience," according to a briefing memo on the project.
The MEDC compared the project's potential to Michigan State University's Facility for Rare Isotope Beams (FRIB), which also relied on significant public funding.
"This is an opportunity to be catalytic and provide supercomputing opportunities, incredibly high paying jobs," Messer said. "I think what you will see is it will attract follow up investments."
UM is expected to pay about $3 million for the 20 acres in Ypsilanti where the lab is expected to be located. The state's $100 million contribution will pay for the construction of the university's non-classified 10 megawatt capacity facility where university staff, students and some private partners will work. Los Alamos will pay $685 million for the construction of its 100 megawatt capacity facility, meant to study potential enhancements in science, energy and national security. The buildings are likely to be completed by 2029 or 2030.
Los Alamos is "maxed out" at its current location and performed a nationwide search for its new home, said Charlie Nakhley, associate labor director for weapons physics at the Los Alamos National Lab. The lab chose Michigan based on its electrical grid and water infrastructure as well as the neighboring university, airport and housing infrastructure, he said.
"The AI revolution is just sweeping through and it's going to impact all manner of research," said Mackey. "It’s going to impact what it means fundamentally to be a national laboratory. It’s going to impact what it means fundamentally to be a university. The only way for us to get ahold of that as a nation is to try to put these innovation hubs in place and to get ahead of the wave.”
It was not clear whether the university went to donors first to seek financial aid for the program. The MEDC, when asked about whether UM had sought other aid, referred questions to UM. UM officials did not immediately respond to a request seeking comment on whether it pursued private funding for the project.
DETROIT DIESEL AID
The $27.7 million critical industry program funding slated for Detroit Diesel is expected to offset a $285 million investment in an expansion of its electric component manufacturing efforts for medium- and heavy-duty electric trucks.
The project is expected to "preserve" 2,000 jobs and create up to 436 hourly and salaried positions. Of the 436 positions, 335 will be hourly jobs with an estimated median wage of $25.86 an hour, which is slightly higher than the regional median wage of $23.73. Another 101 jobs, largely engineering positions, will make a median annual salary of $113,000.
"This initiative positions the site as a potential cornerstone for future ZEV (zero-emission vehicle) component manufacturing within the company's wide-ranging footprint, reinforcing its role in Michigan's automotive future," an MEDC memo describing the project said.
The project also will receive a 15-year personal property tax exemption worth up to $3.3 million for $161.8 million of eligible investment. It's also expected to receive a state education tax abatement and real property tax abatement.
The company has a production network that stretches into Portland, North Carolina, South Carolina, Mexico and Germany, said Matt Pfaffenbach, vice president of operations at Detroit Diesel Corp.
"We evaluated Michigan because it's really been a long history for us in terms of technology, development and leadership within the industry," Pfaffenbach said.
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