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City Gives Trio Tax Breaks
GRAND RAPIDS — City commissioners agreed last week to let two local companies join different collaboratives in the Tool & Die Renaissance Recovery Zone. But whether either actually gets in is now up to the state.
Matador Tool & Die Inc. wants to join the United Tooling Coalition, while Grand Die Engravers Inc. wants to join the Tool Makers Alliance. The city’s approval allows both to join their respective groups for five years.
“These zones can be amended later on and can be extended for a total of 15 years,” said Dan Oegema, city business advocate, who added the city would review the progress both companies make in the zone in two years.
Both firms will enjoy nearly tax-free status for five years and have a better chance of finding new customers through a collaborative, if the Michigan Economic Development Corp. admits them into the zone. Both wanted entry into the zone to help offset the cheaper foreign competition both have faced for years.
Matador Tool and Die makes injection molds, diecast dies and trim dies for multiple industries. The company, at 1959 Will Ave. NW, employs 38.
“It’s been a struggle. It hasn’t been easy,” said Scott MacDonald, CEO of Matador Tool & Die.
Grand Die Engravers makes plastic injection molds for the auto, appliance and medical industries, has 24 employees, and is located at 233 Wealthy St. SE.
“My main concern is not the local competition, but the global competition we face,” said Ken VanNoord, president of Grand Die Engravers.
It will cost the city roughly $13,000 a year in tax revenue if the state lets both companies into the Renaissance Recovery Zone.
Commissioners also granted an industrial tax break last week to Precision Aerospace Corp., which plans to expand its plant at 1600 Linden Ave. SE and purchase some new production equipment.
“This company has been growing in the past and is investing about $2 million in this project,” said Oegema.
Precision Aerospace employs 88 and hopes to add 20 more employees to its work force within the next two years. The abatement will last for a dozen years and will save the firm about $120,000 in total tax payments over that period.
The city will lose $27,000 in property taxes over the life of the abatement. But the city stands to gain $89,000 in new income-tax revenue during that time from the jobs Precision Aerospace plans to create. The city will also get higher real and personal property tax receipts from the aerospace parts maker when the abatement ends.
City Commissioners James Jendrasiak and Rick Tormala said the exemptions the three companies received do not cripple the city’s general fund, which provides revenue for most of the city’s services. They said the tax breaks help sustain and create jobs, which, in turn, increase the city’s revenue from income taxes.
“Our general fund gets reimbursed back through our income tax,” said Jendrasiak.
“When we’re using these tax breaks, we’re also sustaining income-tax revenue to the city,” added Tormala.