SPARK's Business Development Team Supports Hyundai America Technical Center Expansion

The North American International Auto Show in Detroit, Mich. kicked off with an exciting announcement from Hyundai this past January. The Korean auto company announced that it would be expanding the Hyundai America Technical Center in Superior Township to include an environmental chamber for extreme temperature testing. Hyundai is planning to invest $15 million into the expansion, a move that it anticipates is going to generate 50 new high-tech jobs in the region.

SPARK's business development team works to promote the region's unique assets to innovative businesses who are selling goods and services globally. So naturally Hyundai has been high on the team's priority list these past few months. Up until Hyundai's announcement at the Auto Show, SPARK's team had been working with Hyundai to help the company secure more than $2.5 million in new business development incentives from the state of Michigan and Superior Township. The funding, which is subject to approval by the Michigan Strategic Fund, will go directly towards the expansion of the Superior Township Hyundai facility.

In July, SPARK's business development team met with Hyundai as part of its annual business retention program. In this meeting it was discovered that Hyundai was considering additional expansion but faced multiple hurdles impacting the probability of expanding in Superior Township. SPARK discussed this opportunity with the Michigan Economic Development Corporation (MEDC) and subsequently submitted a request for incentives that could close this infrastructure gap and allow for the additional investment and job creation by Hyundai to happen in Michigan. Michigan was not without aggressive competition.

Hyundai had no choice but to explore options to locate its future expansion at facilities where it owned vacant land, Superior Township and Alabama. The state of Alabama was very aggressive in their offerings and incentive packages. Once it was known that Hyundai was looking, the state of North Carolina, Duke Energy and the Tennessee Valley Authority were all in contact with leadership at the Superior Township Hyundai facility, offering free land and massive energy rebates and credits.

The MEDC responded to SPARK's aggressive incentive request; however with a new tax environment, including a new approach to incentives, the MEDC was looking for a unique way that Superior Township could partner with Hyundai. This caused Superior Township to look beyond the typical method of support and tax abatements, and work with SPARK to create a Local Development Finance Authority (LDFA). SPARK has been assisting Superior Township with the creation of a LDFA, a tax increment financing tool, each step of the way. Tax increment financing allows an authority to capture increases in property taxes resulting from new investments and use them to reimburse or re-pay costs of infrastructure projects that are related to job creation.

In this case, the MEDC provided an incentive to cover electrical infrastructure improvements for current expansion plans and in turn, the Superior Township LDFA will reimburse the MEDC over a 15-year period. This reimbursement of new property taxes generated from the investment will allow the MEDC to add back to its incentive fund.

"Throughout this project, Ann Arbor SPARK’s business development team played a unique role, similar to that of a project manager," says Mark Torigian, general counsel of Hyundai American Technical Center. "The team was determined to use their knowledge and experience to develop a resolution to Hyundai's question of why Michigan?"

"The announcement at the Auto Show represented the culmination of months of work between SPARK and its partners to provide Hyundai with this answer," says Luke Bonner, SPARK's vice president of business development. "Without cooperation between all the partners, Hyundai's significant investment and high-value jobs may have been committed elsewhere."

"It is clearly a major benefit for Superior Township, Washtenaw County, and the state of Michigan," says William McFarlane, Superior Township supervisor. "This very successful endeavor is the result of cooperation for success utilizing Ann Arbor SPARK, MEDC, DTE, the Charter Township of Superior, and Hyundai Kia."

Because of a critical team approach between SPARK, DTE Energy, the MEDC and Superior Township, Hyundai will move forward with expanding its current facility in Washtenaw County to include an environmental chassis chamber.  The investment will stay in Michigan, along with the addition of 50 high-tech jobs over the next three years. However, the work of SPARK's business development team doesn't stop here. They will continue to advance the region's economy through the attraction and retention of innovative companies like Hyundai.


Photo courtesy of SPARK
L to R: Jin Rim, Manager, Hyundai America Technical Center; Brenda McKinney, Treasurer, Superior Township; David Phillips, Clerk, Superior Township; Valerie Hoag, Director, MEDC; Paul Krutko, President and CEO, SPARK; Dr. Sung Hwan Cho, Ph.D., President, Hyundai America Technical Center; William Mcfarlane, Superior Township Supervisor; Mark Torigian, General Counsel Hyundai America Technical Center