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Gilbert, DTE Energy, trade groups back plan to put $3B of federal stimulus in infrastructure

Crain’s Detroit Business
Oct. 14, 2021
Chad Livengood

Rocket Companies Chairman Dan Gilbert, DTE Energy Co. and several business trade groups are backing a new lobbying effort to get the Michigan Legislature to spend $2.5 billion of federal stimulus funds on modernizing water infrastructure and $500 million on expanding access to broadband internet.

Gilbert’s top lobbyist, Jared Fleisher, is part of a newly formed Coalition for a Strong and Prosperous Michigan that rolled out a detailed plan Thursday for spending $6 billion from the American Rescue Plan, the federal government’s massive spending program to counter the economic downturn from the coronavirus pandemic.

Fleisher said Thursday the $10 billion Michigan has to spend from the federal stimulus legislation could be “truly transformational” for the state’s economy.

“What you see in this plan is extremely important to bridging us to that future,” Fleisher said during a virtual press conference on Zoom.

Rocket Companies as a business backs the plan, Fleisher said.

“We think it’s incredibly important to put before policymakers a comprehensive framework that we think will help the process and get legislators to see what the whole picture looks like,” Fleisher said.

The new coalition includes the Community Economic Development Association of Michigan, the Home Builders Association of Michigan, the Michigan Infrastructure and Transportation Association, the Michigan Restaurant and Lodging Association, retired Ford Land Development CEO Donna Inch and Michael McGee, past CEO and senior principal of the Miller Canfield law firm.

Some of the coalition’s proposals mirror other plans for how to spend federal stimulus funds that have been floated by Democratic Gov. Gretchen Whitmer and members of the Republican-controlled Legislature.

The coalition is calling for lawmakers to earmark $250 million in federal stimulus for a new economic incentives program to lure new companies to Michigan.

The plan also calls for $100 million investment in preparing sites for redevelopment, which has been a topic of discussion within the state’s business community since Ford passed over its home state for $11.4 billion of new investments in electric vehicle and battery assembly plants destined for Tennessee and Kentucky.

“If we don’t have sites, they’re not going to attract development,” Fleisher said.

Asked in a Zoom chat whether Gilbert’s real estate company would benefit from new economic development incentives, Fleisher replied: “God’s honest truth is we have no plans for this. This is about what our state needs.”

The economic incentives and site-prep funding are part of a $910 million tranche of federal stimulus funds that the coalition wants lawmakers to spend on economic development, talent, workforce skills training and direct grants to businesses.

The coalition’s other spending proposals include:

  • $350 million for Michigan’s Unemployment Trust Fund, which was mostly drained during a massive spike in unemployment claims from mass pandemic-induced layoffs in March and April 2020. Lawmakers recently deposited $150 million in American Rescue Plan funds into the unemployment fund to shore it up.
  • $365 million for the creation of a revenue-sharing trust fund to address what municipal leaders consider chronic underfunding of cities, villages and counties by the Legislature over the past two decades.
  • $805 million for affordable housing and community development, including training funds for getting more workers into construction jobs.
  • $500 million for “strengthening Michigan’s health and safety infrastructure,” including addressing gaps in access to care for mental health and substance abuse disorders in rural and underserved areas of the state.

The plan calls for a $2.5 billion investment in water infrastructure, including capital improvements to water systems, removing lead water service lines in older cities such as Detroit, repairing dams and mitigating the spread of PFAS chemicals that have contaminated underground drinking water sources in several areas of the state.

A 2016 report from former Gov. Rick Snyder’s 21st Century Infrastructure Commission said the state needs to be investing an additional $800 million a year in water infrastructure in order to modernize aging systems.

Five years ago, replacing all lead pipes in water service lines in Detroit, Benton Harbor and other older cities was estimated at $2.5 billion, said John LaMacchia, assistant director of state and federal affairs for the Michigan Municipal League.

The coalition’s proposal will “make a dent” in those long-term costs — the plan calls for $250 million to be dedicated to replacing lead service lines — but further investments by the Legislature would still be needed, LaMacchia said.

“We know that this proposal is not getting to that overall number,” LaMacchia said.

The coalition’s plan does not include funding for roads and bridges because the federal government has not allowed those expenses with the one-time federal stimulus funds, LaMacchia said.

“We didn’t want to suggest things that we thought at the end of the day might not be included,” LaMacchia said.

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