Government and Manufacturing

Medical manufacturers are making investments

A trio of companies is requesting tax abatements from city.

October 11, 2013
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Three local manufacturers that serve the medical industry to varying degrees are asking for tax breaks, and each will tell its particular story to city commissioners next week. Two are making new investments, while one will report that it over invested on an approved abatement.

First, Grand River Aseptic Manufacturing is adding a second location. The firm, which has been based at 140 Front Ave. SW for the past several years, has leased 837 Godfrey Ave. SW. The building offers 28,000 square feet of space to the life-science business, which produces high-value clinical drugs in small runs.

“They’ll be using that site as a finishing facility, which includes inspection, labeling, packaging, terminal sterilization, and analytical and microbiological lab work,” said Kara Wood, city economic development director.

GR Aseptic plans to invest more than $900,000 into its new location. About $540,000 will be spent on real-property improvements, with $404,000 going into personal property purchases. The firm is asking the city for an eight-year industrial tax abatement on the equipment investment and a dozen years on its building improvements.

The company plans on adding 18 employees over the next two years through its investment; the average wage for each new worker will be $24 an hour with benefits. The exemption would save the company nearly $8,000 a year in state and local taxes, while the city would gain almost $9,000 annually in new income-tax revenue from the expanded work force.

In addition, much to the city’s delight, GR Aseptic will also fill a vacant building. The Godfrey structure was where Grand Rapids Chair Co. set up its table-making operation in October 2009, but the company left the city in June and moved to a site in Byron Township.

The company will also ask the city to transfer an exemption it received last year to buy $412,000 worth of new equipment for its Front Avenue location to its new facility. The firm has decided to move that equipment to the Godfrey location. Since it made the purchase, GR Aseptic has hired 20 of the 63 employees it pledged to hire over two years in return for that tax abatement.

Hansen-Balk Steel Treating Co., 1230 Monroe Ave. NW, is asking the city for an eight-year exemption; it proposes to invest slightly more than $1 million into new equipment, including two furnaces, this year. The family-owned company has been operating here since 1955 and specializes in treating steel for the medical, auto and aerospace fields.

“Customers of the company are primarily in Michigan and Indiana,” said Wood.

Once the investment is made, Hansen-Balk will add five new jobs that are expected to pay an average of $14 an hour plus benefits. An abatement will save the company about $5,100 annually in state and local taxes; the city will get $1,500 a year in new income-tax revenue.

Kent Manufacturing, 2200 Oak Industrial Drive, has asked the city to amend an eight-year exemption it received last year because its total investment easily exceeded the amount it initially proposed. Last fall, the company was granted an exemption for a real-property investment of $1.4 million and a personal-property investment of $472,000 for a total of $1.87 million.

“Upon completion, the actual investment by Kent Manufacturing has been $1.96 million for real property and $337,636 for personal property, exceeding estimates by approximately 21 percent. The state tax commission requires that a certificate be amended if the total project costs are in excess of 10 percent above approval,” said Wood.

An amended exemption would save Kent Manufacturing nearly $30,000 annually in state and local tax payments.

The company bought its current location, which is just down the street from its previous one at 1840 Oak Industrial Drive NE, for $1.35 million in April 2012. Then it spent another $1.23 million to add 30,000 square feet to its 40,000-square-foot new home. That expansion was completed last June.

The Muraski family owns Kent Manufacturing; the firm converts pressure-sensitive coated materials to manufacturing parts that are used in a variety of products in the medical, auto, electronics and office furniture markets. Kent Manufacturing is on 3M’s national list of preferred converters.

All the public hearings will be held Tuesday, Oct. 22, at the city commission’s meeting after 7 p.m. in the ninth-floor chambers of City Hall.

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