(AP Photo, file)

LANSING — A federal tax credit program will assist plans by ALDI Inc to build a new supermarket in Iron Mountain

ALDI is investing approximately $9.5 million for two projects in Michigan. A former Kroger location will be renovated at 811 S. Centerville Road in Sturgis, and a new facility will be constructed at 2025 S. Stephenson Ave. in Iron Mountain.

Each store will be about 18,000 square feet and will feature a range of products, including fresh meat and seafood, organic produce, and pantry essentials, Michigan Community Capital said in a news release.

The developments are being supported with a $7 million New Markets Tax Credit allocation from Lansing-based MCC. ALDI has said the Iron Mountain store may open later this year.

“Michigan Community Capital is committed to leveraging our tools to bring healthy fresh food to underserved communities in Michigan,” said Eric Hanna, president and CEO at MCC. “Iron Mountain and Sturgis have both identified bringing more grocery options to their community as a high priority, and we are proud to partner with ALDI as they expand their footprint into Michigan rural markets.”

Established in 2000, NMTCs are a federal subsidy tool administered by the U.S Department of Treasury and designed to attract capital to projects that support low- and moderate-income households and communities. MCC is the only community development entity that deploys this resource in Michigan.

NMTC investors provide capital to community development entities, and in exchange are awarded credits against their federal tax obligations. According to the Tax Policy Center, investors can claim their allotted tax credits in as little as seven years –5% of the investment for each of the first three years and 6% of the project for the remaining four years — for a total of 39% of the NMTC project. The NMTC program held steady at around $1.4 billion per year, rising to $1.9 billion in 2020 as Congress expanded the credits available.

PNC Investment Partners is serving as the NMTC investor on the ALDI projects, MCC said.

ALDI Inc. is a leader in the supermarket retailing industry that offers discounted groceries to customers in nearly 2,200 stores in 38 states. Approximately 18 new full-time equivalent positions will be created to support the new stores, MCC said.

MCC is a non-profit diversified public-private partnership that supports the missions of the Michigan Economic Development Corporation and the Michigan State Housing Development Authority. Over its 16-year history, MCC has supported more than $1 billion in project financing, successfully attracted $320 million in federal NMTCs, and helped to create more than 750 housing units and 1.3 million square feet of commercial, retail and industrial space to facilitate job creation and expansion.

The ALDI website lists 103 stores in Michigan, but Escanaba is its only Upper Peninsula location. ALDI’s 81 Wisconsin locations include Marinette and Rhinelander.