Governor John Engler announced today that the Michigan Economic
Development Corporation's (MEDC) incentives package has helped bring
Kmart Corporation's new high-tech development center to Troy. The MEDC
won the project by making a competitive business case, against Kentucky,
to expand in Michigan with a Single Business Tax credit and job training
assistance.
Kmart Corporation selected Troy over Louisville, Kentucky, for their
new high-tech development center that will spearhead the overhaul of
corporate-wide information systems. It is estimated by an economic
analysis that this high-tech center will create 753 new jobs, 450 in the
company, for Michigan workers.
"Kmart, under the new leadership of Chuck Conaway, is making
significant strides in restructuring their corporation for maximum
profitability," Engler said. "The fact that Troy is part of this
new plan shows Kmart's continued commitment to Michigan and proves the
quality of the local workforce."
The new center will be located on West Big Beaver Road, near Kmart's
world headquarters. It will require a company investment of about $50
million, including building renovations and equipment purchases.
" Troy is excited about the continual growth of Kmart Corporation
on Big Beaver Road. The latest investment will lead the way to a more
technologically competitive company," said John Szerlag, Troy city
manager. " The nearly $50 million project will upgrade and equip an
80,000 square foot facility near its headquarters."
Of the new jobs, 303 spin-off jobs will be created from increased
spending by people who receive income from the jobs at the Kmart
Corporation, according to an economic analysis done by the University of
Michigan.
A key feature of the MEDC incentives package is a Michigan Economic
Growth Authority (MEGA) tax credit, approved today by the MEGA board,
worth an estimated $15.9 million over 14 years. MEGA, which is
administered by the MEDC, is used to promote high quality economic growth,
job creation and retention in Michigan. In addition, the incentives
package includes job training assistance valued at $450,000 for new
employees at Kmart's high-tech development center.
This project will provide over $43.2 million in revenue to the state
over the life of the agreement, resulting in a net positive gain for the
state of over $27.2 million, after the MEGA credit. The project is
expected to generate over $540.4 million in personal income during that
time.
Kmart Corporation is one of the world's largest mass merchandise
retailers. The corporation employs 4,072 people at its world headquarters
in Troy.
"Kmart will invest more than $2 billion during the next two years
to create a state-of-the-art technology infrastructure that will make our
company more efficient and competitive, " said Chuck Conaway,
chairman and CEO of Kmart Corporation. "We greatly value the vision,
support and leadership of Governor Engler, the Michigan Economic
Development Corporation, Oakland County and the City of Troy as we pool
the strengths of the public and private sectors and leverage the power of
technology."
The Michigan Economic Development Corporation works in partnership with
local communities and Michigan businesses to retain and expand job
opportunities and improve Michigan's overall business climate. For more
information, on the Michigan Economic Development Corporation's
initiatives and programs, visit the website at www.michigan.org.
Kmart Corporation
MEGA Analysis
Summary Estimated
(All estimates in 2000 dollars) |
| TOTAL JOBS CREATED |
753 |
| Direct |
450 |
| Indirect |
303 |
| NET POSITIVE STATE REVENUE IMPACT |
$27,281,000 |
| Revenue Forgone |
$15,957,000 |
| Revenue Gain |
$43,238,000 |
| Average Wage |
$1,154/week |
| Personal Income Generated Over Life of MEGA Agreement |
$540,471,000 |
|
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