Lawmakers press MEDC on nondisclosure agreements, Mundy Township site and taxpayer protections

LANSING — Lawmakers pressed the Michigan Economic Development Corporation on nondisclosure agreements, local notice and clawback protections during a question-and-answer period after the agency’s presentation to the House Committee on Economic Competitiveness.

Representative Bagole raised the issue first, saying her district includes the Mundy Township site and that, in her view, residents and elected officials had been excluded: “My understanding is you signed a nondisclosure agreement as did a a lot of other, MEDC members, which did not take into consideration the voice of the people who live there,” she told Director Quentin Messer.

Messer responded that MEDC faces a tradeoff when recruiting projects and that some prospective partners require nondisclosure agreements as a gating condition for consideration. He said the agency’s priority is making Michigan competitive for projects and stressed that MEDC “only recommends projects” and that the Michigan Strategic Fund board must approve incentives. Messer told the committee that “any dollar that goes out to a company is in an agreement with clawback provisions,” and described MEDC’s compliance team and performance-reimbursable structures designed to limit risk to taxpayers.

Representative Harris asked specifically how MEDC handles situations when companies sell, close or move operations after receiving state support. Messer said clawback and change-of-control provisions exist in agreements and that MEDC tracks performance against contractual milestones. He also told members that, in general, local land-use and permitting processes are not preempted by MEDC recommendations; those remain under local control, a point Messer reiterated in response to questions about whether MEDC’s work circumvents local zoning.

Other lawmakers pressed on the broader fiscal implications of incentive competition. Representative DeBoer questioned whether the iterative raising of incentive levels across states is open-ended, asking, “When Indiana or Ohio or Florida or Massachusetts bumps their ante, does Michigan then bump their ante?” Messer said the agency seeks to maintain competitiveness with the tools provided by the legislature but acknowledged limits to what an agency can do and emphasized transparency at later stages when projects seek public approval.

MEDC agreed to provide additional data and said staff would follow up with legislators privately on contract specifics and clawback histories. Several members said they intend to press for clearer communication with constituents about projects in their districts.