An automotive supplier encouraged to build parts in the U.S. will employ 380 workers at a new facility in Flint, thanks in part to a multi-million loan from Michigan’s economic development arm.

On Tuesday, the Michigan Strategic Fund board approved a $5.7 million performance-based loan to C3 Venture Flint, LLC. In return, the company promised a capital investment in the project worth up to $9,684,000 in Flint and the creation of 380 jobs, according to a background document provided by the Michigan Economic Development Corp.

The new Flint operation will be an outgrowth of CT Automotive and Chinatool, which are currently manufacturing profitably in China, according to a MEDC staff background memo. CT Automotive is an interior parts supplier, designing and manufacturing armrests, storage bins, cup holders, docking stations and gear shift surrounds, according to the company’s website.

But one of the companies’ larger customers — who was not named in the memo — would like them to “bring their manufacturing operations back to the U.S.,” Jeremy Webb, the MEDC’s business development project manager wrote in a July 26 memo to the fund’s board.

C3 Venture Flint will recycle plastic into auto parts using existing contracts from its founders. But the company also plans to expand into other products related to clean air, water, energy and soil with a focus on recycling industrial materials, according to the MEDC.

Landing the business in Flint wasn’t a sure thing, state officials said.

C3 Venture Flint explored opening up shop in Indiana, California as well as Michigan, according to the MEDC. Indiana offered an incentive package that included free building space. California had a strategic advantage because the headquarters of one of C3 Venture Flint’s key customers is located in the state, the MEDC said.

So Michigan’s incentive package was designed to best competition in those states, MEDC officials said..

Other factors involved in the fund’s decision to support a loan for C3 Venture Flint includes the fact that the project is not a retail project. It also won support because the project could have been lost to another state; has a net positive return to Michigan and can be started quickly by reusing an existing facility in an economically distressed community.

State officials did not say how much employees at the new Flint operation should expect to earn or how quickly the new facility might be up and running.

Michigan’s seventh-largest city by population has been embroiled in a water crisis for two years after a disastrous switch to the Flint River as a drinking water source. For months, Flint has been under a state of emergency after unsafe levels of lead were confirmed last fall in the drinking water supplied to city residents.

In May, a group of local and national foundations plan to spend nearly $125 million to help Flint — including a push to aid the region’s ailing economy — as state and federal officials continue to wrestle with solving the city’s years-long drinking water crisis.

Michigan’s seventh-largest city by population has been embroiled in a water crisis for two years after a disastrous switch to the Flint River as a drinking water source. For months, Flint has been under a state of emergency after unsafe levels of lead were confirmed last fall in the drinking water supplied to city residents.

State officials had said that they had hoped to stop lead leaching from pipes and restore drinking water to the city in stages, with a full assessment of the system completed by mid-April of this year. But random spikes in lead continue to plague the water system. More testing is expected through the summer as residents continue to use filters on their taps and seek out bottled water.

Contact Matthew Dolan: 313-223-4743 or msdolan@freepress.com. Follow him on Twitter @matthewsdolan.