Michigan loaned $35M to mobility center. Debt could cripple it, boosters say

Michigan is demanding repayment of $35 million from a state-backed mobility research center supporters say is critical to keeping autonomous vehicle development in Michigan.

The American Center for Mobility, a 340-acre test facility in Ypsilanti Township, says annual payment sought by the state could jeopardize the nonprofit project despite a financial rebound last year.

“It’s a state investment to help cement the auto industry’s place in Michigan,” said state Sen. Jeff Irwin, D-Ann Arbor, who wants the state to forgive the loan or delay debt repayment.

“It makes sense to continue that effort.”

The nonprofit tests robotaxis, automated trucks and high-tech delivery services.

Last year, documents show it built a $1.59 million surplus, which would be wiped out by Michigan’s demands for $1.62 million per year in payments on a loan that went into forbearance last year.

The conflict comes at a pivotal time for self-driving technology after US automotive research funding went through years of “peaks and valleys,” said Glenn Stevens, executive director of MichAuto advocacy group.

In all, the state has invested $67 million in the site, a former General Motors facility, and already has forgiven an earlier $15 million loan.

Pushing too hard for payments would make that spending “worthless” if it drives the project out of business, said John Rakolta, a metro Detroit developer.

“It sounds like a conundrum right now for the state, which would probably get criticized for not (collecting) the loan,” said Rakolta, who participated in discussions about the formation of the ACM but is not involved in the project.

Negotiations about the debt are ongoing with the Michigan Economic Development Corp., a quasi-public business development agency. Its spokesperson, Danielle Emerson, said the contract with the state clearly calls for repayment.

‘We’ve proven ourselves’

Auto industry advocates say Michigan is in a “fierce battle” for new mobility jobs. Ford Motor Co., for example, detailed recently week how it is expanding its Long Beach, California, development hub for its new universal platform electric vehicles.

The ACM is fulfilling its role as a state hub for vehicle connectivity, said Paul Krutko, a founder of the research center and its treasurer.

Customers include Toyota and other automakers, and affiliations include the University of Michigan and Michigan Tech.

The center still offers full testing capabilities among the 10 national proving grounds for self-driving cars designated by the Obama administration in 2016. The others are now more limited in scope, giving ACM national prominence for what it offers as advanced research takes off, said Krutko, who is also CEO of Ann Arbor SPARK regional economic developers.

The ACM this spring also is launching a search for a new CEO as Reuben Sarkar leaves to become CEO of SAE International, a global mobility organization based near Pittsburgh.

Krutko credited Sarkar for leadership through rapid changes in automotive technology and federal spending, plus fallout from COVID-19.

’We’re hopeful that we have proven ourselves and that we can figure out a way that the state’s investment continues to be made,” Krutko said.

He said the ACM was never intended to make money and “was always intended to be a nonprofit, open source environment for the industry to use,” Krutko said.

History

The ACM grew out of an effort to replace lost jobs from the General Motors Willow Run transmission factory after GM gave it up during its bankruptcy and closed it afterwards.

The factory — once known as the Arsenal of Democracy for making World War II bombers — was among the most contaminated ex-GM properties to move into the RACER Trust.

Krutko was among those who urged the development of an automotive test site, along with Gov. Rick Snyder and groups including Business Leaders for Michigan.

The Michigan Strategic Fund, the public funding arm of the MEDC, has invested $35 million since 2016 to “complete the purchase of land, facilitate final design, construction costs and operations” according to documents obtained by Bridge through a public records request.

Revenue topped $6 million in 2018 and 2022, but dipped to around $2.2 million in 2023 and 2024. According to the ACM’s 2025 audit, revenue bounced up to about $2.5 million.

The test track was booked for 229 days in 2025, with researchers working in a range of available environments: off-road, a downtown-like area, a highway loop.

Most of the 35,430 square feet of ACM’s office space is also leased, with several long-term commitments, the group said.

And the reach of work on site is broad, ranging from work on underwater drone development to autonomous snow clearing.

“The need for a facility where autonomous solutions can be tested, which was the concept from the very beginning, has sort of come full circle,” Krutko said.

Looking ahead

Both Krutko and the MEDC’s Emerson say conversations continue about the debt. Neither provided details of negotiations.

One factor could involve the University of Michigan’s collaboration with the Los Alamos National Laboratory to build a data and research center, said Irwin, the state senator.

The state awarded U-M $100 million for site development work in December 2024.

The state had pinpointed the ACM campus as a site for it in 2023 before U-M bought different land in Ypsilanti Township for the controversial project. Backlash prompted U-M to revisit the ACM campus, an effort that’s ongoing.

The call to repay the $35 million also comes amid a legislative pull-back in subsidy funding. Bridge analysis has reported on how cash-for-jobs incentives have led to many low-paying deals. And during Gov. Gretchen Whitmer’s administration, billions have been promised with a fraction of the jobs delivered.

The state budget deal for 2026 called for about $91 million of cuts to MEDC programs; some lawmakers continue to call for more.

Despite the million conflict, the MEDC’s Emerson says Michigan is prioritizing mobility initiatives, touting the ACM. MichAuto says 58% of US spending takes place in the state.

“Michigan is leading the nation in mobility solutions,” Emerson said, noting subsidy deals with Torc Robotics and Astemo Americas, along with Michigan’s designation by the federal government as a National Range for Deep Uncrewed Aerial Systems Training.

Opportunities are expected to increase, said MichAuto’s Stevens, also an ACM board member.

“Automated and connected vehicle technology is really full steam ahead,” said Stevens.

The ACM has built a research ecosystem well beyond its original autonomous test track, Krutko said. Gas technology, hydrogen fuels and EV charging interoperability all have played into that.

Those are all areas where the United States and partner nations need to develop “our own technologies and our own supply chains,” Stevens said.

“It’s really, really important for Michigan’s competitiveness.”

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This story was originally published by Bridge Michigan and distributed through a partnership with The Associated Press.