Construction of $80 million driverless car testing site begins in Mich.
Construction of the American Center for Mobility driverless car testing site will begin in earnest in the spring. Photo credit: Lindsay VanHulle/Crain’s Detroit Business
UPDATED: 11/22/16 11:50 am ET – adds tax incentive
ANN ARBOR, Mich. — Leaders of the American Center for Mobility testing site for driverless cars formally kicked off construction of the planned $80 million project, saying Michigan will be competitive in a race for a federal autonomous vehicle testing designation.
Monday’s groundbreaking ceremony came two weeks after American Center for Mobility administrators closed on the $1.2 million purchase of 311 acres at the former General Motors plant and World War II bomber factory in Ypsilanti Township.
By December 2017, the mobility center’s administrators hope to open a 2.5-mile highway loop as part of the project’s first phase. Construction will begin in earnest in the spring, said John Maddox, the center’s CEO.
The highway track will be funded with $20 million in startup funding from the Michigan Strategic Fund, a division of the Michigan Economic Development Corp. Supporters still need to raise another $60 million from the federal government or the private sector, though Maddox and members of Michigan’s congressional delegation said private funding is more likely.
“We are moving on the assumption that federal money is difficult to get,” said U.S. Sen. Gary Peters, D-Mich., adding that designation of a national testing lab likely would attract new private investment, including from automotive companies with deep pockets.
American Center for Mobility’s strengths include ready-made infrastructure, such as concrete foundations from the former factory and highway overpasses that would be expensive to replicate elsewhere, and proximity to the global auto industry, Peters said.
“I don’t think any site can compare,” he said.
Maddox said he already is talking with private companies about investment, though he wouldn’t name them. The prospect of a public-private partnership related to mobility and autonomous vehicles is “resonating” throughout the industry, he said.
Michigan’s efforts are gaining notoriety overseas, too. Several people involved with the project said Monday that the U.S. faces stiff industry competition from countries in Europe and Asia, which makes projects like the American Center for Mobility more urgent.
Michigan Gov. Rick Snyder recently returned from his sixth trade visit to China, where he toured the country’s Shanghai Auto City production facility and a Chinese self-driving vehicle testing site. He said the state’s delegation was often asked about Michigan’s mobility efforts.
He said he soon will sign new legislation that creates a regulatory framework for autonomous vehicles in Michigan, including allowing them on public roads for any reason, not only while they’re being tested.
“This is simply the start of something,” Snyder said. “We need to stay on the gas and continue down this path.”
Maddox said the project’s leaders will begin repurposing some buildings on the Willow Run site yet this fall, with paving likely in the spring. The Michigan Department of Transportation will also start to repurpose sections of U.S. 12 and Wiard Road near the facility for use by the mobility center, Maddox said, while RACER Trust will prepare groundwater and stormwater systems.
The mobility center’s property acquisition entity, Willow Run Arsenal of Democracy Landholdings LLP, closed this month on a $1.2 million purchase of the 311-acre Willow Run site. The MEDC committed $3 million of its total $20 million funding award to help with the purchase.
The Willow Run property was owned by Revitalizing Auto Communities Environmental Response Trust, or RACER Trust, which formed to handle cleanup and redevelopment of former GM plants in Michigan after the Detroit automaker’s 2009 bankruptcy. This past summer, it was anticipated that a property sale could close in 2017.
Willow Run Arsenal of Democracy Landholdings is a limited partnership created in March specifically for the property acquisition. It is owned by Willow Run Land Management Services, a nonprofit corporation registered with the state, and the Michigan Strategic Fund. The landholding entity will lease the site to the American Center for Mobility, which is a separate nonprofit corporation.
Besides the highway loop, which is expected to help automakers test driverless vehicles at speeds of 55-75 mph, the American Center for Mobility is expected to include an urban grid with intersections, buildings and pedestrian crossings and campus buildings for research and development, Maddox said.
Meanwhile, the state of Michigan said it will waive property taxes for the testing site. The Michigan Strategic Fund, a division of the Michigan Economic Development Corp., on Tuesday approved a 15-year Renaissance Zone designation for the 313-acre testing site.
Such tax zones generally are used to waive property taxes on specific projects for up to 15 years. The property tax incentive is expected to save up to $1.9 million per year, offset in part by an agreement for a payment in lieu of taxes between the mobility center and Ypsilanti Township, the state said.
The MEDC said the Renaissance Zone designation would not create any direct jobs, but would lead to “significant indirect job creation.”
The state has said the American Center for Mobility will repay the state’s contributions through monthly payments for 30 years, starting in January 2020.