Michigan Senate OKs $1.3B spending deal: $630M for Ford battery plant prep

• Lawmakers pass $629.7 million for site development in the Marshall area for a Ford battery plant
• The Michigan Strategic Fund has awarded Ford just over $1 billion in incentives
• Senators unveiled the plan for more investment late Tuesday

LANSING — Michigan lawmakers were working late Tuesday on a $1.3 billion spending plan that would funnel hundreds of millions toward economic development projects.

The bulk of the spending proposed under House Bill 4016 would go to site development for a planned $3.5 billion Ford Motor Co. electric vehicle battery facility that could employ at least 2,500 people once it opens in 2026 near Marshall.

It passed the Michigan Senate Tuesday in a 22-16 vote and now heads to the House for further review

The proposal calls for $629.7 million for land acquisition, site preparation and road and infrastructure improvements to make way for the incoming plant. 

Related: 

• 5 (mostly) good things to know about Michigan’s progress on EVs
• Ford battery plant in Michigan rose from the state’s failure in 2021
• Ford EV battery plant on Marshall Michigan megasite gets $1B in incentives

Another $170.3 million would be deposited into the state’s Strategic Outreach and Attraction Reserve (SOAR) fund, a pool of money designed to lure businesses into the state.

Ford is getting just over $1 billion in incentives, including a $210 million grant and a waiver of property taxes on hundreds of rural acres between Marshall and Battle Creek, following a vote by the Michigan Strategic Fund, the public funding arm of the Michigan Economic Development Corp.

Members of the board unanimously approved the grant, along with creating a 15-year renaissance zone that will allow Ford to run the plant essentially tax-free. Local economic developers also will receive a $36 million loan from the Jobs for Michigan Investment Fund to purchase parcels and make infrastructure improvements to 950 acres of the 1,900-acre site. The Marshall Area Economic Development Alliance is leading the development effort on the so-called megasite. 

In exchange for tax breaks and other incentives, the state expects the new Ford factory to generate $29.7 billion in personal income over the next 20 years from workers who are expected to make $20 to $50 per hour.

The factory would be the first in the U.S. to produce lithium iron phosphate (LPF) batteries, which Ford says will make EVs more affordable. 

The Chinese partner, Contemporary Amperex Technology Co. Ltd. (CATL), would supply the technology design and early versions of the batteries until the factory opens for operation.

So far this year, the state has secured $13 billion in electric vehicle and battery manufacturing projects and announced nearly 13,000 new automotive jobs, according to Gov. Gretchen Whitmer’s office.

The legislation before the Senate would use $826.6 million in state funding and $500 million in federal funds.

Other proposed spending in the legislation includes: 

• Roughly $200 million for hospitals, including hospital staffing and nursing home workforce grants, nursing home reimbursement rates 
• $25 million for assisting residents at risk of water shutoffs
• $60 million for grants to community centers

The Senate remained dormant for most of the day Tuesday negotiating the parameters of the plan before details were shared at a Senate Appropriations Committee hearing shortly before 6 p.m.

Lawmakers could take up the legislation for a vote as early as Tuesday evening.