Michigan plots ‘drone zone’ to test package delivery tech of the future

• Michigan plans to set up a new drone corridor in a rural area between Alpena and Graying by spring
• Move comes as FAA appears closer to allowing drones to fly out of the sight of a pilot, which would drastically expand commercial options
• The new initiative follows nearly $25 million in state funding to increase drone capacity in Michigan

Michigan aims to establish a “drone zone” running from Alpena to Camp Grayling in early 2025, creating a six-mile wide airspace to test technology it hopes ultimately will help make large-scale drone deliveries routine.

The new drone corridor — the first in the state — will allow unmanned aircraft to fly outside of a pilot’s view, a format that opens broad commercial potential for uses like package delivery.

“This will take the handcuffs off this industry,” said Tony Sauerbrey, drone program coordinator at Northwestern Michigan College in Traverse City. “It will let drones be used for what they can do.”

Today, the Federal Aviation Administration requires pilots on the ground to keep their eyes on the unmanned devices as they’re used to take aerial photos and video for land surveys, real estate needs and other uses. 

The FAA has issued some rule waivers, notably for researchers developing new drone technology. And in July, the FAA approved its first authorized commercial drone flight “beyond visual line of sight,” or BVLOS. 

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Removing the visibility requirement opens up new commercial applications, and not just for delivery, Sauerbrey told Bridge. Other possible uses include inspections of bridges and downed power lines, weather research, water monitoring, along with public safety and military operations. 

The FAA changes come as the state widens its effort to expand its drone capacity and while the U.S. commercial drone market is expected to grow 37% per year through 2034 to $418.5 billion. 

With the drone corridor near Alpena, the state is seeking to “lower the barriers associated with achieving routine (out-of-sight drone) operations, make airspace accessible, and provide a path for regulatory approvals,” according to a recent request for proposals issued by the Michigan Economic Development Corporation. 

Initial impact could include new military and corporate research spending, with a statewide network potentially to follow.

“Michigan’s vision is to implement and commercialize these capabilities across the state and potentially make them extensible throughout the National Airspace System for commercial, military, and public operations,” the state said in the proposal request.

Michigan lawmakers last year approved $10 million in drone-related funding for the Michigan Department of Transportation, along with a separate $7 million earmark dedicated to establishing a so-called “advanced air mobility park”  at the Battle Creek Executive Airport. 

That initiative, called MICH-AIR, is led by the Battle Creek Unlimited economic development group, which envisions the location as a manufacturing site for large drones and a drone-centered cargo terminal as drone use expands to the state’s largest commercial airports.

The Democratic-led Legislature added another $7.5 million in drone infrastructure funding to the new budget that Gov. Gretchen Whitmer signed in July. It’s set to take effect in the new fiscal year beginning Oct. 1. 

Some Michigan Republicans complained about the drone funding, citing it as an example of what they called “reckless spending” by Democrats. 

“Despite having yet to fix the damn roads, (the budget) will allocate no further monies for local roads — which is cost-effective and broadly beneficial to all citizens — and instead provides tens of millions of dollars for bus operators in urban areas, e-bikes and drones,” state Rep. Sarah Lightner, a Springport Republican who serves as House Appropriations Vice Chair, said in a floor statement opposing the spending plan. 

At the time, state Rep. Donni Steele, R-Orion Township, called drone support “misguided” given “the financial support desperately needed by our brave law enforcement officers.”

Whitmer’s administration and other state officials were not available for interviews or comment on this report. 

However, Whitmer expressed confidence about exploring drone opportunities in April, when she announced plans to launch the Alpena-area dedicated airspace with an autonomous drone competition.

Entrants in next year’s Unmanned Triple Challenge will use autonomous drones to transport a package across Michigan via air, land, and water from Rogers City to Camp Grayling. 

The competition “will unleash innovation in drone technology for a wide range of applications,” Whitmer said in a statement at the time.

Participants are likely to come from academia, military or government, she said. A month earlier, she’d announced  a repositioning of the Michigan Defense Center into a new Office of Defense and Aerospace Innovation to grow the state’s defense and aerospace industry. 

“We will bring more jobs and investment home so we can keep building the future of mobility right here in Michigan,” Whitmer said in May.

The new drone zone is expected to be used by April 2025 by both military and commercial flight testing and training operators, as operations there define and establish “a sustainable long-term business model for operating the BVLOS system,” according to the MEDC.

Nationally, other states also are exploring how the emerging drone capability — including emerging designs heavier than the FAA’s 55-pound limit — could be profitable. 

North Dakota, for example, had spent $50 million as of 2023 as it sought to develop unseen drone capability and a market. Test sites also exist in Oklahoma and New York. 

North Dakota realized 100 new jobs and over $8 million in tax revenue as of 2022 from its partnership with a private company that developed a statewide network for out-of-sight drone flights. 

Drone research and testing continues in Michigan outside of the planned Alpena-area air corridor, including through partnerships centered at research hub Newlab at Michigan Central in Detroit.

Last fall, the Michigan Department of Transportation released a 

Drone Corridor Feasibility Analysis to assess what it needed to add drone traffic in the state, “putting Michigan first in integrating (drones)  into the state’s robust transportation network.”

In July, Lt. Gov. Garlin Gilchrist announced $6 million in state funding toward initiatives suggested in that report, including expanding beyond pilot line of sight drone operations that could support moving goods between manufacturing facilities and transporting critical supplies between medical facilities. 

The awards include: 

• $2.6 million to BETA Technologies toward creating a charging network for what it called “next generation aircrafts.” The chargers will be installed at Cherry Capital Airport in Traverse City, Capital Region International Airport in Lansing, West Michigan Regional Airport in Holland and Willow Run Airport near Ypsilanti.
• $2.45 million to Michigan Central in Detroit as Newlab sets up new pilot projects connected to the Advanced Aerial Mobility Region in Detroit.
• $512,168 to Skyports as it explores ship to shore drone delivery in Sault Ste. Marie and De Tour Village in the Upper Peninsula’s Chippewa County.
• $689,500 to Traverse Connect, which is leading a group exploring drone delivery of medical supplies in rural areas.

Meanwhile, as the MEDC seeks proposals from system engineering companies to develop and operate infrastructure to allow the BVLOS corridor in Northern Michigan, responses are due Sept. 11. The MEDC expects to award the contract by October 7.

A successful drone corridor could lead to more drone activity in Michigan, Northwestern Michigan College’s Sauerbrey said. To reach that point, regulations and technology advances need to align, he added.

Operating drones outside of a pilot’s sight “will really help the economy, both with jobs available in this industry” and from deliveries and access,” Sauerbrey predicted.