Two delayed development projects now back on track are bringing relief, a sense of optimism and, more importantly, hundreds of jobs to the city and county of St. Clair, Mich., which have been hard hit by the pandemic recession.
According to the Michigan Department of Technology, Management & Budget, the county had an unemployment rate of 9.8 percent in December, the fifth worst rate of the state's 83 counties.
One is a project delayed almost a year because of the pandemic, the renovation and expansion of the iconic and long-shuttered St. Clair Inn on the St. Clair River, where construction has resumed. Owner Jeff Katofsky says he has bookings for weddings and other events scheduled throughout the year and hopes to be open for business in April.
The other project was delayed much longer — two decades, in fact. On Feb. 23, the Michigan Economic Development Corp. approved a grant of $1.5 million over five years for construction of a new $70.1 million plant for Magna Electric Vehicle Structures-Michigan Inc., an entity of Troy-based Magna International Inc. That will go on 65 acres of a 100-acre site the city bought 20 years ago and put in roads, water and sewer lines for an industrial park that never materialized.
There is another potentially big project that could result from the Magna deal. It wasn't mentioned in press releases put out by Magna, the MEDC or the governor's office, but Magna executives and county and city officials have had preliminary talks about forming a public-private venture to build a training academy on the 24 acres of land adjacent to the new Magna plant, modeled after a training academy Magna International launched in 2015 in Liberty, Mo., a suburb of Kansas City, to start training high school students for the highly skilled workforce required by modern factories.
The KC Tech Academy is a partnership between the Kearney and Liberty school districts, Metropolitan Community College and Magna Cosma, a unit of Magna International. Under the free two-year program, students get on-the-job training, a high school diploma, college credit and certification in manufacturing technologies.
"We hope to have something like that here, but there are no firm plans, yet," said Andy Hrasky, group general manager of the five plants in Michigan in Magna's body and chassis group. "The local colleges, city and country have been very helpful, and we hope to have something similar here to the Kansas City academy. It is a benchmark program for Magna. The roles we and other manufacturers struggle with are skilled trades, and the KC tech academy is a public-private partnership focused on skilled trades, starting students off when they are juniors and seniors in high school."
He said if an academy is built in St. Clair, the goal would be to involve other local manufacturers, too. He said that if Magna decides to build an academy in Michigan, it would consider other sites, as well, "but this community has been very proactive. It's been very vested in getting this plant. They did a great job and continue to do so."
The city of St. Clair has agreed to a property tax abatement for the new plant and St. Clair Community College will provide some free training through the Michigan New Jobs Training Program.
The St. Clair plant is expected to create at least 304 jobs. Chris Hinman, who will be the plant manager, told Crain's that he expects the plant to employ more than 100 by the end of the year to start fulfilling an eight-year contract to make complex structural battery enclosures made of steel, aluminum and composites for General Motors' 2022 GMC Hummer electric vehicle. The steel, aluminum and composite enclosures are designed to protect the batteries.
If the plant hits that job number, it will hit the first two milestones of the MEDC grant. The first is $250,000 for the creation of 50 jobs, and the second is another $250,000 for the next 50 jobs. The third milestone is $500,000 for the next 100 jobs with milestone four of $500,000 for the final 104 jobs.
"Our job is to bring investment here, to create a tax base here and to create jobs here, and this will do all of that," said Dan Casey, CEO of the Economic Development Alliance of St. Clair County. "We want to attract jobs that have higher wages, and this will do that."
Production of the Hummer EV is scheduled to begin at GM's Factory Zero plant in Detroit and Hamtramck this fall.
While county and city economic development officials were prevented from talking about the new Magna plant under terms of nondisclosure agreements until after the MEDC vote on Feb. 23, approval was considered a mere formality.
In fact, Magna broke ground on the facility in November. "We've already got a lot of cement in. We've made significant progress," said Hinman the day after the MEDC approval. "We'll start seeing steel go in in the next week or two. We expect to start moving equipment in by mid-summer, and sometime in Q4, we'll have some level of occupancy and producing our first parts."
Lansing-based Wieland Corp. is the general contractor.
The plant will be built in phases, with a first phase of 345,000 square feet, and pending further contracts with GM or other OEM, could top out at one million square feet.
That plant will be built at 1811 Range Road, two miles north of downtown, a mile and a half west of the St. Clair River. The county originally paid to have the land cleared. The city then put in the infrastructure in anticipation of quickly getting the property on the tax rolls. The city had been trying to develop it for more than 20 years, with a string of disappointments, deals that fell through, financing that couldn't be worked out and changes of mind.
Bill Cedar has been mayor of St. Clair for 21 years, since just before the city bought the property.
"We never thought it would take this long. There was an economic upturn when we started and we thought we'd get something done fast," he said. "Deals would come along, and then they'd say they found an empty building somewhere, instead. Then we got to the Great Recession. Over the years, we had the land for sale, we offered it for free.
"Obviously, we're excited talking about hundreds of good jobs. Kids get out of school here and leave. They go somewhere else to find good jobs. My kids were the same way. These are good jobs. Kids will be able to stay and raise their kids here."
According to the MEDC, the jobs at the plant will pay between $17 and $48 an hour, with an average wage of $27.
Last summer, when word got out that there seemed to be a deal brewing that would finally get the would-be industrial park back on the tax rolls, government officials were hoping to get $200,000 for the sale of the land.
The deal came in at half that, mostly because Magna didn't need the whole site. It eventually bought 65 acres. Excluding roads, that leaves 24 acres of usable land. Cedar said a training academy on some of that would be great, and with a Magna plant going up there, the site might be more attractive to other manufacturers.