Michigan economic development agency gives former member $202M in grants

When the Michigan Strategic Fund approved $300 million in taxpayer subsidies for projects in Detroit, Pontiac, and Lansing, most of that money flowed to a former member of the economic development agency. Paul Gentilozzi, managing partner of New Vision Lansing, along with the city of Lansing, received $202 million for the Transformational Brownfield Plan.

The plan is estimated to create or redevelop five buildings and bring more than 560 housing units in the capital city over 30 years. 

The money will fund a 26-story skyscraper with 287 residential units, retail space and a two-story parking garage. It will also be used for Capitol Tower, a six-story building with office space and 105 residential units. A third project, along Washington Square, would redevelop a 10-story former office building into a mixed-use building with 60 residential units and a three-story parking deck. A fourth project involves a seven-story, mixed-use building in Old Town with two floors of parking and five residential stories with a total of 90 units. Lastly, the Ingham Building will be redeveloped into a five-story, mixed-use building containing first-floor commercial space and 25 residential units on the upper floors.

“The Transformational Brownfield Plan approved today is essential to launching the five projects that will bring a renewed vibrancy to Downtown Lansing,” Gentilozzi said in a news release. “A project of this magnitude is only possible with great cooperation and support at the state and local level.”

Gentilozzi is a former MSF member, according to meeting minutes from February 2023.

“As of April, 2023, Mr. Gentilozzi is not a member of the Michigan Strategic Fund board,” Otie McKinley, media and communications manager at the Michigan Economic Development Corporation, told Michigan Capitol Confidential in an email. The MSF approves grants and loans for MEDC projects.

Michigan’s economic development programs exist to benefit the companies and individuals who profit from them, not the communities they’re supposedly intended to serve, John Mozena, president of the Center for Economic Accountability, told CapCon in an email.

“They’re supposed to be making sure subsidized companies deliver on their promises and holding them accountable when they don’t,” Mozena said. “They’re supposed to be defending us against scam artists, corporate welfare boondoggles and companies that want a quick handout for doing what they’d be doing anyway. In reality, all these agencies are run by the very companies and industries they subsidize, enabled by cronies who never say ‘no’ to anything.”

The MSF also approved a $79.2 million brownfield plan in Pontiac with a time frame of 25 years. The project will include three buildings:

• The Exchange Flats, a nine-story building with 287 residential units
• 91 North Saginaw (El Centro), a redeveloped four-story building that will include space for restaurants, hospitality, meetings and offices, and
• 48 West Huron (Tech and Arts), a redeveloped three-story building that will include a food hall, event, and traditional office space.

The city of Pontiac gave the properties a tax abatement for rehabilitating obsolete properties. The abatement is valued at $1.27 million over 12 years.

Pontiac anticipates it will give the project a Neighborhood Enterprise Zone tax abatement in spring 2027, good for 15 years. Finally, the project will receive a Brownfield Tax Incremental Financing status, valued at $9.79 million.

A Michigan Community Revitalization Program loan for up to $2.4 million was approved for Aria Warren Detroit LLC to rehabilitate a property in the city of Detroit, creating 32 new residential housing units. Rents on the units well range between 60% and 100% of the area median income.