Mercedes-Benz is moving its plans to establish an alternative fuel powertrain research center in southeast Michigan from Ann Arbor to Redford Township.

Driving the decision are the economics behind using an existing corporate facility instead of building new construction, said Michael Finney of Ann Arbor SPARK.

Officials told SPARK early this month that they were seeking tax abatements in Redford, a Wayne County community in the I-96 corridor that borders Detroit.

That decision follows an announcement in mid-March by the Michigan Economic Development Council that Mercedes would build a $10 million R&D center in Ann Arbor, aided by a $7.5 million, 10-year tax credit.

The Mercedes-Benz Engineering Center for Powertrains USA would have marked the first major alternative propulsion technology operation in the Ann Arbor region, which is seeing growth among companies dedicated to batteries and electric vehicle technology.

“We have obviously been working with Mercedes for quite some time in finalizing the details of their project that was announced back in March for Washtenaw County,” Finney said. “As the economic crisis … continued to deteriorate, their senior management made the decision to take a look at an existing facility they own in the region.”

That facility is the former Detroit Diesel complex at Telegraph and Plymouth Roads, said Redford Township Supervisor Tracey Schultz Kobylarz.

“At the moment all we have done is enter into an agreement to consider a tax abatement to welcome them into this community,” Kobylarz said.

The decision to abandon plans to build in Ann Arbor appears permanent, Finney said.

The loss of the R&D center - and the 223 jobs it was expected to generate - is a disappointment, Finney said.

"It’s a project that really fits with what our community is all about," Finney said. "(Heavy R&D) thrives here."

It's a new business element for Redford, Kobylarz said.

"It would be a very welcome mix to our businesses here," she said.

Redford's proximity to Ann Arbor - it's about 30 miles east - means that the facility still will look to the Washtenaw County area for employees, Finney said. About 16 percent of Redford residents have a bachelor's degree or higher, according to SEMCOG. That compares to 69 percent in the city of Ann Arbor.

"The good news is that they'll still recruit very heavily in the Ann Arbor market for talent," Finney said. "Obviously, Redford is a very easy commute from Ann Arbor."

And despite the loss of the project in Washtenaw County, Finney said the facility still will be a win for Southeast Michigan.

"We try to be much more regional in our thinking and approach," Finney said.

Mercedes employs about 14 at an engine tech center in Ann Arbor among its 93,000 worldwide employees, according to year-end corporate data. It's based in Stuttgart, Germany.