Economic Development, Government, Manufacturing, and Real Estate

Key automotive parts maker is expanding

October 1, 2012
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Another local manufacturer is expanding its production base, and city commissioners will hold a public hearing next week on a tax-abatement request from the company, which is planning to make a major investment over the next two years.

In addition to being a key player in the auto market, Benteler Automotive has increased its presence in the military defense industry over the past few years through a recent $5.5 million investment. Now the company at 320 Hall St. SW plans to spend $7.3 million on new machinery and equipment to increase its production capabilities in both industries.

“This investment will include a hot-form line, a laser cutting cell and two weld cells. Benteler currently has 205 employees on staff with plans to add an additional 15 employees,” said Kara Wood, city economic development director.

Benteler officials have asked the city for two personal property-tax abatements. One is for 12 years for the hot-form line and laser cutting cells. The other is for five years for the purchase of the weld cells it uses to produce parts for Ford and Nissan. Should the requests be approved, Benteler would save $35,000 per year in property taxes.

“Benteler has been doing very well. They’ve been moving into the defense industry, and that has gone well,” said Deputy City Manager Eric DeLong.

ArticAx Inc., a life sciences firm based in Toronto, is setting up an office in the American Seating complex at 801 Broadway Ave. NW as part of its expansion into the United States. The company specializes in macular degeneration research. ArticAx will invest over $1.1 million into its 7,500-square-foot space and create 28 new jobs over its first three years here.

“What they do is very equipment-intensive,” said DeLong. “This is the type of company that we’re trying to attract.”

Commissioners gave the firm a 10-year personal-property tax abatement last week because the income taxes the company will pay will exceed the property-tax revenue the city will exempt.

“Over the 10-year abatement, new city income taxes are estimated at $181,650, and city property taxes abated are estimated to be $26,202,” said Wood.

“This tax abatement serves as a local match for the Michigan Economic Development Corp.’s Business Development Program grant award of up to $220,000 approved by the Michigan Strategic Fund on June 28, 2012,” she added.

Commissioners granted the Nottawaseppi Huron Band of the Potawatomi an obsolete property district for its $1.2 million renovation of the building at 311 State St. SE — the former Gateway Middle School — into a medical clinic and social services office. Work on the project is expected to begin late this year and be completed next summer. The band will provide medical, dental and vision services for Native Americans, will employ 20, and will move from its current Wyoming location.

Commissioners also extended Arbor Gage and Tooling’s membership in the Tool and Die Renaissance Recovery Zone for another five years last week, a critical extension for the company. With their decision, commissioners also transferred the firm’s recovery zone from 203 Logan St. SW to 2031 Calvin SE, the former home of Rapid Die and Engineering. The building is vacant.

“The company has invested a lot of money into its operation,” said DeLong.

The membership saves Arbor Gage $73,581 in personal-property taxes for five years for its planned investment of $450,000. The city will gain $76,440 in income-tax revenue over the period. “It’s a pretty good deal here. We get a filled building and a vibrant business,” said DeLong.

Since it has been in the zone, Arbor Gage has increased its work force from 25 to 35 employees and upgraded its equipment

“In addition, they have joined the Michigan International Tooling Alliance, a Michigan tool-and-die collaborative,” said Wood.

“I’m pleased to see them growing and expanding,” said Commissioner James White.

Also last week, commissioners held six public hearings on industrial property-tax abatements, including two for Kent Manufacturing Co., which has bought the building at 2200 Oak Industrial Drive NE and plans to add 29,000 square feet to it. The company mostly serves the medical, electronic and automotive markets and will invest $1.23 million into the property. Kent Manufacturing will spend nearly $300,000 on new equipment over the next two years.

Commissioners also held two public hearings for 616 Development’s plan to renovate the dilapidated and vacant five-story building at 16 Monroe Center NE, known as the Kendall Building. Doing business for the project as Lofts on Monroe LLC, 616 has said it will spend $4 million to develop retail and office space on floors one and two, and carve out a dozen apartments on levels three through five.

“The Kendall Building is in extremely poor condition and will require substantial demolition and renovation work to be returned to a functional condition. Rehabilitation costs are estimated at approximately $2 million,” said Wood.

Commissioners also approved a new service-sharing agreement with Wyoming and Kentwood last week for building-code inspections. Louis Canfield, coordinator of the city’s development center, said the agreement took about five months to negotiate, would likely only come into play when a city is short on staff and is voluntary.

“They don’t have to say yes. We may have an occasion to be in the requestor’s position from time to time. We’ve done very sporadic back-ups in the past,” he said.

The agreement is part of the city’s transformation plan. Wyoming has approved it and Kentwood is expected to take up the issue soon.

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