Is an economic recovery arriving

April 15, 2011
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Grand Rapids city commissioners had five applications for industrial tax exemptions and one for an obsolete property exemption come across their desks last week. Those applications mean more economic development and jobs for the city, which had 306 projects completed from 2003 through last year worth almost $1.8 billion in private investment.

“I think it says two things. One is people like to do business in the city. I think some of the things that have come before us have been in the works for a while. We have a good team, employees that look to attract business in Grand Rapids,” said City Commissioner David Schaffer.

“Some of those jobs are in the manufacturing sector, which is good because we like to have that balance of adding those high-end jobs and those manufacturing jobs, as well.

“I also think one thing that is really encouraging is to see some products being developed on the health hill,” he said of the “Medical Mile” on Michigan Street and an application from Grand River Aseptic Manufacturing.

The six applications totaled nearly $11.5 million of real and personal property investment that should create 211 new jobs and retain 323 existing jobs. Commissioners gave all six their approval. Two gained final approval, while the other four were scheduled for public hearings this week.

Do these applications mean a recovery is taking hold in the city?

“I think we’re starting to see signs of that. (But) until we can get the majority of people that have been off work back to work … And again, that’s why I’m encouraged by some of the manufacturing because some people won’t be able to take the high-end jobs or have the education to take those jobs. I think it’s a sign that a recovery is starting. And at least from my standpoint, people want to do business in the city, in the urban core, and I think we’re starting to see that,” said Schaffer.

“To me, it’s optimistic. I think it’s a sign that we are moving forward and coming out of this slump that we’ve been experiencing for a number of years now,” said City Commissioner Rosalynn Bliss. “I think (manufacturing) is an area that needs to be revitalized. I know that (Economic Development Director) Kara (Wood) has worked tirelessly around economic development, so I’m sure she has a number of things in the hopper right now.”

Here are the applications commissioners approved:

  • Knape & Vogt Manufacturing Co., at 2700 Oak Industrial Drive NE, plans to invest $3.5 million in new equipment and create 100 new jobs, while retaining 35 more.

“This is an exciting project for the city of Grand Rapids,” said Wood, who added that the firm was getting a tax credit of $335,409 from the state.

  • Beero Partners LLC, at 941 Wealthy St. SE, plans to invest $145,000 to rehab underused first-floor space in its building for Atomic Object LLC, which will add five new jobs to its work force in the first year and retain 26 employees. Atomic Object hopes to add 30 more workers within five years.

Here are the applications commissioners scheduled for public hearings:

  • Grand River Aseptic Manufacturing Inc., at 140 Front Ave. SW, plans to invest $4.3 million into real and personal property, which is expected to create 10 new positions and retain another dozen. The life-sciences business that will make clinical drugs grew from an affiliation between the Van Andel Institute and Grand Valley State University.

“These are very high-paying positions they’re adding,” said Wood. The firm plans to pay an hourly wage of $38.47. “That’s a huge investment,” said Schaffer.

  • Hearthside Food Solutions LLC, at 2455 Oak Industrial Drive NE, plans to invest $3 million into real and personal property. That investment is expected to create 75 new jobs and retain 257 others.

“Actually, they’re doing two large projects in the region,” said Wood, who remarked that the baker is also adding a breakfast bar line like the Kellogg Co. earlier said it was doing. “The food industry in West Michigan is growing tremendously.”

  • Harmony Brewing Co., at 1551 Lake Drive SE, plans to invest $291,000 into real and personal property for a new microbrewery, a brew pub and a restaurant. The investment should result in 18 new jobs.

“Hopefully, this will spur more development,” said Bliss, who would like to see a nearby vacant Blockbuster store find a tenant.

  • S.J. Huisman LLC, 1001 S. Division Ave., plans to invest $240,000 to renovate its location for an EMT and paramedic training school. The work will create three jobs and retain three more.

If all the requests are approved, the city will abate $24,582 in property-tax revenue. At the same time, the city will collect $61,183 in new income-tax revenue, if all the requests are approved.

Even during recession years, investment took place

Almost $1.8 billion in private dollars has been invested in 306 projects in Grand Rapids over the last eight years. That investment has resulted in nearly 13,000 new jobs and residents and $7.5 million in new tax revenue for the city. Here is a yearly breakdown of that investment.


Year
2010
2009
2008
2007
2006
2005
2004
2003
Total
 


Projects
51
24
34
64
42
29
25
37
306

 

Private
Investment
$241,316,587
$142,619,927
$259,641,697
$360,965,650
$159,026,023
$345,971,715
$145,758,237
$131,254,836
$1,786,554,672

 

New Jobs/
Residents
1,986
480
1,178
2,592
1,147
3,127
1,362
1,126
12,998

 

Total New
Taxes
$1,736,888
$432,738
$866,546
$1,683,546
$613,079
$1,374,523
$464,858
$337,800
$7,509,978

Source: Grand Rapids Economic Development Office, April 2011. BJ

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