Oliver Products Receives City Tax Break

September 3, 2008
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GRAND RAPIDS — Oliver Products Co. received final approval from the city last week for an industrial tax exemption that will allow the firm to expand at its northwest side plant. Commissioners also led a new affiliation of Rockford Construction Co. halfway to the finish line for a tax abatement on a southeast side project.

Rockford General Trades LLC cleared the third of six hurdles last week to qualify for a 12-year rehabilitation district tax break for the renovation of two buildings at 1501-1505 Kalamazoo Avenue SE in the Boston Square Business District.

Rockford General Trades will use a portion of the building for office space and as a warehouse to store materials and supplies. The buildings will also house subcontractors that would work for Rockford Construction or any other builder that does work with Rockford.

“The buildings are meant to house a general trades and carpentry group, kind of as an independent business unit here at Rockford Construction,” said Michael VanGessel, president of Rockford Construction.

VanGessel said the new venture should reduce construction costs for clients.

“We can really get this at price points and control smaller projects on a much closer basis,” he said.

The renovation work is expected to cost $500,000 and create between five and 10 new jobs that will pay an average of $15 an hour. The project will generate $109,000 in new taxes, with half of that total, $54,500, being abated for a dozen years. The city’s share of that abatement comes to $18,000. But the project is likely to generate $36,000 in new income-tax revenue for the city over those 12 years.

Oliver Products has been cleared to transfer an industrial tax exemption certificate from a leased building in Plainfield Township to its plant at 445 Sixth St. NW. Commissioners also extended the certificate for nine more years.

The certificate was awarded to Oliver Products in 2006 for medical packaging equipment it purchased and planned to operate at its Plainfield Township site. The lease, however, is about to expire there and the firm will move the equipment to its Sixth Street location.

“This will allow them to continue to expand,” said Kara Wood, economic development director for the city. Wood said the project cost Oliver Products $2.67 million. The project is expected to generate $126,000 in new taxes over nine years, with $63,000 being abated. The city’s share of that tax total is $42,000 over nine years, with half being exempted.

Oliver Products is expected to create five new jobs from the transfer that will pay about $14 an hour. Wood said the city would get $12,600 in new income taxes over nine years.

Oliver Products provides packaging solutions to the medical and prepared-food industries and manufactures food-processing equipment. The company had sales of nearly $85 million last year and employs 235 at its northwest side plant.

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