News Story

Tech Company Gets $2M in State Money, Fails Performance Test

After failing employment targets, Rigaku repays $825k

Rigaku Innovative Technologies, an Auburn Hills subsidiary of Tokyo-based Rigaku Corporation, sought and received a $2 million performance-based grant from the Michigan Strategic Fund in January 2013.

The company, a manufacturer of high-tech optical products, planned to invest $55.7 million in its Michigan facility and create 27 jobs, according to the Michigan Economic Development Corporation. At a news conference announcing grants to Rigaku and 13 other firms, then-Gov. Rick Snyder said, “That these companies are choosing to stay and grow in Michigan reinforces our well-earned reputation as America’s comeback state.”

Rigaku is still in Michigan. But after receiving its $2 million grant in April 2013, something happened.

According to the online records of MSF board meetings, in October 2014 the company reported that it “had not maintained its base employment level.” State officials provided Rigaku with a “cure period,” extending to May 2015, but they subsequently deemed the company in default of its agreement. In July of that year, MEDC staff proposed, and the MSF board approved, a plan for Rigaku. It required the company to repay $1 million by September 2017 and adhere to the original agreement and repay half of the original grant in installments from 2018 to 2022.

According to MEDC annual reports on the performance grant program, Rigaku repaid $825,000 in 2016 and 2017. It remained in “repayment” status in the 2018 annual report.

MEDC officials declined to discuss what happened to precipitate the Rigaku default, absent a formal Freedom of Information Act request. Rigaku did not respond to a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.