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State board votes $12 million for post-Pfizer businesses
6/28/2007
The Michigan Strategic Fund Board voted unanimously on Wednesday to set aside $12 million to help retain Pfizer employees and reuse Pfizer facilities across the state.
The board administers Gov. Jennifer Granholm's 21st Century Jobs Fund, which has awarded money from the state's share of the federal tobacco settlement for economic development projects.
The MSF board approved for the money to be used for the following:
About $8 million for loans to new startup companies or growing companies across the state that have Pfizer connections, such as former Pfizer employees starting companies, or businesses hiring former Pfizer workers.
$550,000 would be granted to the Michigan Innovation Equipment Depot, which takes used life sciences equipment and provides it at a low cost to startup companies across the state. All the equipment in the depot so far has been donated by Pfizer.
About $3.4 million would be used to support capital equipment, operational and maintenance costs for the Pfizer-donated facility in Holland that will be used as a life sciences incubator.
Final contracts still need to be approved by the MSF board in July. After that, the state's administrative board also must approve the contracts.
The $8 million will be administered jointly by three economic development agencies: Ann Arbor Spark, Southwest Michigan First in Kalamazoo and Lakeshore Advantage in Holland.
Officials at the three agencies will determine requirements for the loans and choose which companies to work with, said Mike Shore, spokesman for the Michigan Economic Development Corp., which will be working with the agencies.
Mike Finney, president and chief executive officer of Spark, said the three groups expect to loan money to eight to 10 companies in total. Companies that want to participate can submit proposals.
In September, the state's Jobs Fund awarded $126.3 million to 78 companies and organizations - 36 of them in the Ann Arbor area - in a competitive process conducted by the American Association for the Advancement of Science.
Instead of a new round of funding this year, the $12 million was allocated to help communities retain Pfizer workers who are losing their jobs as a result of the company closing its Michigan facilities. Another $30 million was allocated to a "Choose Michigan'' fund that would provide additional incentives to high-tech firms being wooed by other states.
But last month, the Legislature voted to take that $30 million and use it to help fill an $800 million hole in the current state budget year ending Sept. 30. Beginning Oct. 1, the 21st Century Jobs Fund is expected to get another $600 million over the next eight years in tobacco settlement funds.
Ann Arbor Spark originally submitted a proposal to use $9 million of the $12 million of the asset retention fund for various Pfizer retention-related activities, including investment in startups. Finney said he is not disappointed with the new plan.
"We think it's very fair and creates high potential for good companies to be selected and funded because of Pfizer's downsizing,'' Finney said. "We have a good relationship with Kalamazoo and Holland and don't expect any problems there.''
Although the state's overall budget is unsettled and there was talk earlier this year about the $12 million being taken to help balance the budget, Shore said Wednesday he doesn't believe that will happen.
"This $12 million is believed to be safe and usable for these purposes, which is why went this route,'' Shore said.
Contact Jenny Rode at jrode@annarbornews.com or 734-994-6843.
©2007 Ann Arbor News
© 2007 Michigan Live. All Rights Reserved.
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