GR Goes To Bat For This Developer

March 12, 2004
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GRAND RAPIDS — The Grand Rapids City Commission voted Tuesday to help a local developer seek some relief on a development agreement with the Michigan Economic Development Corp. in order to move his project forward.

Developer Roosevelt Tillman, president of Construction Trade Subcontractors and Tillman Construction Co., purchased two long-neglected South Division Avenue properties from the city last year.

He subsequently developed a 16,000-square-foot commercial center anchored by a Family Dollar Store on a two-acre site at 530 S. Division Ave. and a 24,000-square-foot light manufacturing plant on a three-acre site at 630 S. Division Ave. to house a plastic injection molding company that manufactures molds for the medical industry.

The two properties are part of the city's tax-free Renaissance Zone.

Tillman's development pact is tied to an agreement the city has with the MEDC.

The MEDC provided a $675,000 loan toward the project and agreed to forgive the loan by $20,000 for each job created up to the full $675,000.

The agreement called for the creation of 18 full-time jobs at each site that paid a minimum of $7.30 an hour. Thus far, the 530 S. Division project has created 10 full-time and 10 part-time jobs, or the equivalent of 15 full-time jobs.

The city's Economic Vitality Team recommended that the City Commission ask the MEDC for an amendment to the development agreement that would lower the job requirement from 36 to 30 full-time jobs and raise the per-job credit from $20,000 to $22,500.

The team also requested that half of the loan, or $337,500, be converted to a grant as credit for the 15 jobs already created.

Economic Development Director Susan Shannon told commissioners Tillman's intention is to invest that sum in equipment to get the manufacturing facility at 630 S. Division up and running.

"We have enough money from the sale of the property and the performance bond — that's our security to pay back the loan," Shannon said. "We can release the performance bond as we create jobs there. At this point if he can get relief from the performance bond, he can then use that credit line to cover the equipment."

Commissioner Robert Dean of the city's 3rd Ward reminded commissioners that within the past five months they had approved similar concessions for other businesses that faced tough economic times.

He said Tillman's developments have made that section of the South Division corridor more attractive and that area residents appreciate it.

Tillman told commissioners that the manufacturing jobs would fall in the pay range of $10 to $20 an hour, based on the individual's skill set.

Third Ward Commissioner James White pointed out that Tillman has to procure the equipment before he can create the jobs.

He also noted that Tillman has some solid manufacturing contracts in the works, including a $25 million contract with a multi-billion dollar pharmaceutical company.

"In the area of injection molding for medical supplies, they've already got a patent on one of their pieces of equipment," White observed. "We are a business-friendly city. We can't get every business to move to Grand Rapids, but maybe we can get contracts to come to Grand Rapids."

If the MEDC approves the changes, the city would have the go-ahead to release Tillman's letter of credit for the 530 S. Division project.

The development agreement for 630 S. Division would remain unchanged.

First Ward Commissioner James Jendrasiak voted against the request.

"This (South Division) was supposed to be an area of high unemployment and depressed economy. Why they can't create those jobs has not been explained to this commission. I think it's a disgrace even if the MEDC would allow this to go forward.

"The taxpayers are once again being asked to support somebody else's financial burden."

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