MEDC Helps Attract Kmart's New High-Tech Center to Troy

Gov. John Engler announced Monday that the Michigan Economic Development Corp.’s incentives package has helped bring Kmart Corp.’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 selected Troy over Louisville for its new high-tech development center that will spearhead the overhaul of corporate-wide information systems. An economic analysis report estimates 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 Corp. 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-sf 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 company, 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 Monday by the MEGA board, worth an estimated $15.9 million over 14 years. MEGA, which is administered by the MEDC, is used to promote 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 Corp. 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,” says Chuck Conaway, chairman and CEO, Kmart Corp.