MEDC Awards Brownfield Tax Credit to Delphi Automotive Systems

Tuesday, December 19, 2000

Kathy McMahon

Up to 500 Jobs Retained in Buena Vista Township

The Michigan Economic Development Corporation (MEDC) has approved an incentive package, which convinced Delphi Automotive to rehabilitate the Saginaw Steering Systems facilities in Buena Vista Township. The MEDC incentive includes the second approved Michigan Economic Growth Authority (MEGA) Brownfield Single Business Tax credit for obsolete property rehabilitation.

Delphi Automotive Systems plans to invest up to $315 million on renovations including building, machinery and equipment costs. Portions of two plants, totaling 400,000 square feet, will be renovated. It is estimated that this expansion will retain 1,690 jobs, up to 500 directly by the company.

“This is an ideal example of a facility that could have been abandoned without the recent changes to the Brownfield Redevelopment Financing Act,” said Doug Rothwell, chairman of the Michigan Economic Growth Authority (MEGA) board. “The updated brownfield program helps Delphi make a business case to invest in the obsolete Buena Vista Township sites.”

Rehabilitation of the facility will begin in March 2001 with construction targeted for completion in December 2004.

“Clearly, this project will be identified as a turning point in Delphi’s future in Saginaw County,” said JoAnn Crary, president, Saginaw Future, Inc. “We’re extremely pleased with the cooperation and assistance from Buena Vista Township, the County of Saginaw and the MEDC.”

The Brownfield Single Business Tax credit was approved today by the MEGA board. The MEGA board recommended a credit for 10 percent of the eligible investment in Buena Vista Township Steering Gear project for up to $30 million over 10 years. The MEGA program, which is administered by the MEDC, is used to promote high quality economic growth, job creation and retention in Michigan.

Delphi’s Buena Vista Township facility was eligible for brownfield tax credit under a recent amendment to the Brownfield Redevelopment Financing Act. This amendment increases the maximum Single Business Tax credit from $1 million to $30 million. The amendment also allows the credit to be given to functionally obsolete, blighted or contaminated property in 88 core communities, including Buena Vista Township.

This project will provide more than $78.9 million in revenue to the state over the life of the agreement, resulting in maintaining state revenues of more than $58 million, after the brownfield tax credit. The project is expected to generate more than $987 million in personal income during that time.

“As the global leader in steering systems, remaining competitive is critical to Delphi’s future success. We are excited about the additional opportunities these partnerships – state and local government, employees and management – will afford us as we plan our future investments,” stated Paul J. Tosch, president of Delphi Steering Systems and vice-president of Delphi Automotive.

Delphi Automotive Systems is a world leader in transportation and mobile electronics components and systems technology. The company operates over 200 facilities in 38 countries.

Delphi Automotive Systems Brownfield Analysis Summary Estimated (All estimates in 2000 dollars)
TOTAL JOBS RETAINED		1,690
	Direct	500
	Indirect	1,190
NET POSITIVE STATE REVENUE IMPACT		$ 58,128,000
	Revenue Foregone	$ 20,687,000
	Revenue Maintained	$ 78,995,000
	Average Wage	$ 936/week
Personal Income Generated Over Life of Brownfield Agreement		$ 987,436,000