City shows confidence in solid company

December 26, 2011
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As the city’s 1997 Renaissance Zone was lurching toward its expiration date last week, Grand Rapids city commissioners unanimously gave a company that has been located in the nearly tax-free district for the better part of a decade an early Christmas gift.

“The company has invested four times the amount they pledged. They aren’t closing or leaving,” said Kara Wood, city economic development director.

“I think this is a very solid company, and we have confidence in them,” said Commissioner James White.

“There really is no point in punishing or penalizing them. They’ve been a good company,” said Mayor George Heartwell.

Heartwell, White and Wood were speaking of Benteler Automotive Corp., which has a plant in one of the zone’s original six districts at 320 Hall St. SW. When Benteler entered into its zone development agreement with the city in 2000, the manufacturer promised to invest nearly $7 million into the Hall Street plant and create an additional 48 full-time jobs to reach a total of 434 employees by Dec. 31, 2011 — the last day for the 15-year zone. Company executives, though, recently told the city that it wouldn’t reach its job-creation goal.

But Wood said Benteler has invested $28 million into the plant and its equipment, or four times the $7 million the company pledged to spend when its officials signed the zone contract. “Regrettably, though, Benteler has not achieved the job creation target, and today employs a total of 240 positions,” said Wood.

The company gave the city a letter of credit worth $480,000 that the city could keep if Benteler failed to create the jobs it had promised by the zone’s end date. But instead of collecting the cash, commissioners decided to return the letter to Benteler with no strings attached.

“I think we should take into consideration a really tough economy,” said Commissioner Rosalynn Bliss. Commissioner Walt Gutowski noted that it wasn’t only the economy that may have kept Benteler from reaching its jobs goal. He pointed out that technological advancements have led to more automation being used in manufacturing, which results in fewer employees working on a plant’s floor.

Wood said Benteler has retained 240 jobs at the local plant. “Many of these jobs were transferred from other Benteler facilities, totaling over 70 transferred jobs in 10 years,” she said. “Benteler Automotive remains committed to the plant at 320 Hall St. SW.”

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