Industrial companies making large investments

October 28, 2011
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City commissioners approved eight industrial tax exemptions last week, four of which were for the same location but for four different firms.

“These are a family of companies located at 555 Plymouth NE,” said City Economic Development Director Kara Wood, who added that the firms bought the building in February.

The four are making sizable investments in their businesses at the site, led by the $3.9 million that Advanced Tooling Systems is making in personal property improvements. Ultimate Gaging Systems Inc. is a start-up company that wants to invest $1.2 million into new machinery; 3DM Source Inc. is putting $695,000 into new equipment; and Concept Tooling Systems plans to spend more than $313,000 on new machinery.

The four expect to create 74 new jobs from their investments and all have requested exemptions for 12 years.

“Some were a little disappointed they couldn’t get in the tool-and-die recovery zone, but we’re doing the best we can with the tools we’ve got,” said Wood.

Advance Tooling, Concept Tooling and Ultimate Gaging are affiliates of the Tooling Systems Group, which is comprised of mold-and-die stampers, tooling businesses, machinery sales firms and contract machining companies. Wood said Advance Tooling is the flagship company of the Tooling Systems Group. “They are all over the region,” she said.

“It’s kind of interesting to see, as we approve these, that many are clustered around the Michigan Street industrial district,” said Commissioner Rosalynn Bliss, who represents the district.

The four other requests approved by commissioners were for Firstronic LLC, Proos Manufacturing Inc., Terryberry Co. and Benteler Automotive Corp. 

Firstronic LLC, which makes advanced electronics at 1655 Michigan St. NE, invested $252,000 into new equipment earlier this year. Proos Manufacturing, a maker of metal components at 2555 Oak Industrial Drive NE, is making a $1.15 million investment in real and personal property improvements. The Terryberry Co., at 2031 and 2033 Oak Industrial Drive NE, will invest $3 million in real and personal property over the next 18 months. And Benteler Automotive is investing $2.4 million in real and personal property at320 Hall St. SW.

Wood said Terryberry had considered moving from the city and mentioned that the firm provides a lot of community support.

“To show you how long they’ve been in business, I bought my (high school) class ring from them in 1956,” said Commissioner Elias Lumpkins.

Mayor George Heartwell said Benteler had considered leaving the state about a decade ago. “This is a continuing commitment made by Benteler.”

Firstronic, Proos, Terryberry and Benteler also are asking for 12-year exemptions and would create 45 new jobs from their investments.

The eight companies are investing nearly $13 million locally. The jobs created are expected to add nearly $50,000 in new income-tax revenue to the city every year.

“Our objective around this table is, and always has been, to use our tools — in this case, industrial tax breaks — to create jobs. We see it as a net positive to enable these companies to grow,” said Heartwell. “When you talk about the manufacturing sector leading this recovery, this is certainly evidence of that.”

Wood told the Business Journal that she wasn’t certain whether commissioners set a single-day record when they approved eight industrial tax breaks at one meeting, but she noted that the city has given the green light to more of those exemptions this year than in her previous years at the city. The state also has to approve the abatements.

City commissioners also amended a brownfield plan last week for 253 Prospect LLC. The building at that address is a former church that is currently vacant. The LLC wants to renovate and convert it into 22 condominiums at an estimated cost of $2 million. Wood said the developers have to meet a planning and historic preservation condition, which is part of the zoning variance, to collect the state business tax credit. She added that the project qualifies as a brownfield because the property is obsolete. The work is expected to begin in January and be completed across the structure’s 20,000 square feet in July.

“I think to have something remain vacant in a neighborhood has a cost,” said Commissioner David Schaffer of the empty church.

“It’s sad to see it sit there vacant. I agree, it does have an effect on the neighborhood,” said Bliss.

Commissioners also held two public hearings on the project last week. One was to establish an obsolete property district for the two-story structure, while the other was for the project’s tax exemption. The city is expected to receive nearly $8,500 in new tax revenue annually from the project.

“A lot of investment has to be made in it. I know they’re working closely with the neighborhood and the residents,” said Wood. “The prior owners began interior demolition. I don’t know how much work they got done, but it was in pretty bad shape then,” said Bliss. “It’s a beautiful building — a really beautiful building.”

For the second time in about two months, commissioners had to reapprove a tax abatement because the Michigan Department of Treasury couldn’t support the language contained in the city’s resolution.

The initial resolution, which gave an exemption to Offsite Lake Drive LLC in June for its redevelopment of the Kingsley building at 1415 Lake Drive SE in Eastown, read, in part, “if there is any decrease in the SEV or in the economic value or in the projected jobs created, the years (of the exemption) may be reduced by action of the city commission.”

But Treasury told the city that commissioners could only revoke the certificate, not reduce the years, and wouldn’t accept the resolution without changing the language.

“This is a technical amendment,” said Wood. “We’ve had lots of issues with Treasury receiving these applications. They’ve become more regulatory.”

In August, commissioners had to reapprove 10 industrial tax exemptions for language changes mandated by Treasury. Andy Dillon, a state House Speaker until last year and a Democrat who sought the party’s nomination for governor in 2010, became Treasurer for the Snyder administration in January.

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