Michigan drops $1M so company can move six miles

The Michigan Economic Development Corporation, an organization that offers taxpayer subsidies to select companies, has awarded $1 million to a Grand Rapids insurance company through the Michigan Business Development Program.

Giving $1 million to OVD Insurance will generate at least $12 million in capital investment and create 131 jobs, the MEDC said in a press release.

OVD Insurance, founded in 1982, is currently based in a nearby suburb, but it purchased a seven-story building in downtown Grand Rapids.

“OVD Insurance is required to create at least 131 jobs over the next three years,” Danielle Emerson, public relations manager at the state economic development agency, told Michigan Capitol Confidential in an email, citing an agreement between the MEDC and the company.

OVD plans to use the state grant on the building, Josh Van Vels, company president, told CapCon during a telephone interview.

When asked if the 131 jobs cited in the press release will be created or shifted from other businesses, Van Vels said it will be a mixture of new employees and seasoned professionals.

“We appreciate our partnership with the MEDC to support our investment in job growth here in West Michigan,” added Van Vels in an email.

The Michigan Business Development Program has an 81% effectiveness rate, according to Emerson of the MEDC. This means that 81% of jobs committed to be created are verified as created. She confirmed that no funds have yet been disbursed for this project.

A study by James Hohman, fiscal policy director at the Mackinac Center for Public Policy, shows that only one in 11 jobs subsidized with taxpayer dollars of the past 20 years have come to fruition.

Advantage Benefits Group, an employee benefits firm, has also been in the Grand Rapids area, operating in downtown Grand Rapids for 28 years.

“We support the mission of funding economic development, to bring new jobs to Michigan,” Advantage Benefits president Robert Hughes told CapCon an email. “In this case, taxpayers are funding a $1 million build-out, for a property and casualty insurance agency to move six miles from Grandville to downtown Grand Rapids.

“Maybe the MEDC can explain to business leaders how this constitutes economic development for our community or Michigan,” Hughes added.

Aric Nesbitt, a Republican state senator from Lawton and 2026 gubernatorial candidate, criticized the grant.

“This is yet another example of the disastrous impact of corporate welfare,” Nesbitt said in an email to CapCon. “Here, they’re simply paying another Michigan company to relocate and compete against other Michigan companies who didn’t get this handout.”

The whole state economic development agency, Nesbitt said, needs to be torn down.