New life sought for dead auto plants as business climate shifts

December 14, 2009
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LANSING — As Ford Motor Co., Clairvoyant Energy and Xtreme Power work to turn the auto company’s former Wixom Assembly Plant into a renewable energy industrial park, other former auto plants in the state sit empty.

Some are being torn down, like the General Motors Craft Centre in Lansing. Others, such as the Packard Plant in Detroit, await their fate.

One, however, went through a transformation like Wixom Assembly is expected to see.

General Motors Corp. announced the closing of its stamping plant near Kalamazoo in 1992. After the factory closed in 1999, Hackman Capital Partners, a development company based in Los Angeles, bought it and created Midlink Business Park.

The company renovated the building, splitting it in half. The two halves have since been partitioned and occupied by manufacturing and warehouse businesses.

David Smith, president of Midlink, said that part of attracting business to the former factory involved rebranding the site. So in 2003, his company repainted the building to give it the appearance of a facility that could house multiple tenants.

Smith also said that the market for large manufacturing spaces had changed, and manufacturers were looking for smaller spaces instead.

“We had to take a 2-million-square-foot building and figure out how to divide it into spaces of 25,000 to 100,000 square feet,” he said.

Midlink’s Web site lists several companies operating in the business park, including Kaiser Aluminum, Landscape Forms and W. Soule and Co.

Smith and Jill Bland, vice president of Southwest Michigan First, a regional economic development organization in Kalamazoo, agree that Midlink wouldn’t exist without the help of a team of professionals and public officials, and without state tax incentives.

The buildings are on 340 acres of property, including 110 in a Renaissance Zone, which allow businesses to operate nearly tax-free for 15 years. Businesses are exempt from the Michigan Business Tax, state and local income and local personal and real property taxes. These exemptions are phased out during the last three years, and the state reimburses school, library and community college districts for lost tax revenue.

The state has different zones for different industries, such as tool and die and renewable energy businesses.

Renaissance Zones require the approval of local governments, and both Smith and Bland credit Comstock Township board members for their cooperation.

Bridget Beckman, a public relations officer for the Michigan Economic Growth Corp.,    said that programs like tax incentives and Renaissance Zones help bring economic activity to locales that otherwise might not see it.

She also cited another incentive, the Michigan Economic Growth Authority or MEGA credit. Focused on job retention, job creation and high wages, the credit gives eligible businesses a 50 to 100 percent break on the Michigan Business Tax for up to 20 years.

The MEDC is a state agency that works with local governments and development organizations as a liaison between businesses and the Department of Energy, Labor and Economic Growth. It was involved in Midlink’s formation by providing a $3 million grant for the property’s redevelopment and tax credits for potential tenants.

Other state incentive programs focus on renewable energy industries.

One such incentive has proven crucial to bringing Clairvoyant Energy and Xtreme Power to Wixom, an undertaking expected to create 4,000 jobs.

Ford’s Wixom plant, once the headquarters of its Lincoln division, will be occupied by at least three tenants. The 4.7 million square feet of one of the company’s oldest and largest factories will be home to a renewable energy park, according to Ford.

Xtreme Power, a developer and manufacturer of batteries and power management systems based in Kyle, Texas, has qualified for an advanced battery credit. The tax credit is for businesses that develop and manufacture high-energy batteries.

Another empty manufacturing center, GM’s Centerpoint truck plant in Pontiac, will become a movie studio. Detroit-based Raleigh Michigan Studios, formerly Motown Motion Pictures, will spend $70 million to turn the former factory into sound stages for film productions, according to the MEDC. The company, which is expected to create 3,600 jobs, will get a 12-year, $101 million tax credit. The company will also benefit from Michigan’s movie tax credit.

There’s another tangible advantage of reusing abandoned automotive factories.

Smith, of Midlink, praised the construction of the Comstock Township facility, saying that tearing it down “would have been a crime.”

“GM builds one heck of a factory,” he said. “There’s more steel, more concrete, a huge electrical capacity” and other assets that make such buildings ideal for manufacturing.

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