Government and Manufacturing

Big investment gets big support from city board

Local manufacturer expected to add more than 100 jobs in two years.

October 25, 2013
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Grand Rapids city commissioners did double duty last week for an advanced electronics manufacturing firm that serves the auto, medical and industrial sectors — and for good reason.

First, commissioners amended an industrial tax exemption they had awarded Firstronic LLC nearly two years ago to the date. Then they ratified a second state-authorized tax break for the company’s most recent investment that will triple its work force.

In October 2011, the commission approved an exemption when Firstronic said it would invest $252,500 to upgrade its technology. Two years later, the company has spent more than $1.1 million on that investment and created 13 new jobs, instead of the eight to 10 it initially reported it would add to its work force at 1655 Michigan St. NE.

The company now employs 54 workers, up from 41 workers in 2011. The amended exemption means Firstronic will save $5,500 on its state and local tax bill annually, and the city will get $5,462 in new income tax revenue each year.

Commissioners then ratified a new industrial exemption for Firstronic, as the firm plans to invest more than $2.2 million into personal property and real property by the end of 2015. The bulk of that investment will go into new machinery and equipment, and the abatement is for 12 years. Firstronic officials said they would add another 115 employees to its current work force from the spending.

“Firstronic currently employs 54 and as a result of the investment it anticipates adding 115 additional employees with an average wage of $20.20 per hour, plus benefits,” said City Economic Development Director Kara Wood.

The company also plans to invest $25,000 into its plant; that exemption will run for eight years.

“Firstronic has also received $300,000 in financial assistance through the Michigan Economic Development Corporation’s Business Development Plan. This exemption serves as the match for the state’s investment,” said Wood.

Firstronic will save $4,632 in taxes from the commission’s action. The city is an even bigger winner: It will collect $48,318 in new income-tax revenue from the abatement once the company increases its work force.

Commissioners also awarded a new industrial exemption to Grand River Aseptic Manufacturing for its second location at 837 Godfrey Ave. SW and transferred an abatement they gave the firm last year for its 140 Front Ave. SW address to its new site.

The company plans to invest more than $900,000 into its new location, which the Grand Rapids Chair Co. recently abandoned when it moved last summer to Byron Township. Grand River Aseptic will spend about $540,000 on site improvements and $404,000 on personal property improvements. The firm’s new abatement is for eight years on the equipment purchase and 12 on the site upgrade.

Grand River Aseptic, a life-sciences business that produces high-value clinical drugs, will add 18 employees from this investment. The exemptions will save it nearly $8,000 a year in state and local taxes. The city will gain almost $9,000 annually in new income-tax revenue from the new jobs, which will pay an average of $24 an hour with benefits.

The transferred exemption had the company spending $412,000 on new equipment for its Front Avenue site, and that abatement will now go to the Godfrey plant.

Commissioners also ratified an eight-year abatement for Hansen-Balk Steel Treating Co., which is investing more than $1 million into new equipment this year. The company, at 1230 Monroe Ave. NW, treats steel for the medical, auto and aerospace fields and will save about $5,100 a year in taxes from the exemption.

Hansen-Balk, which has operated here since 1955, will add five new jobs from its investment and the city will gain $1,500 annually in new income-tax revenue.

Commissioners also agreed to amend an eight-year exemption they gave Kent Manufacturing last year because the company topped the $1.87 million investment it initially planned to make by about 21 percent. Kent Manufacturing spent almost $2.3 million on its new location at 2200 Oak Industrial Drive NE and on machinery.

An abatement has to be amended with the city and the state when a manufacturer that receives an exemption invests more than 10 percent above its original investment. The amended exemption saves Kent Manufacturing nearly $30,000 a year in tax payments.

Commissioners also awarded an eight-year exemption to Swift Printing Co., 404 Bridge St. NW. The firm is spending about $400,000 on new equipment, software and related peripherals and will add one new job, which will pay $20 an hour plus benefits, from the investment. Swift employs nine.

The abatement will reduce Swift Printing’s tax bill by $1,924. The city will receive another $416 each year in income-tax revenue from the investment. City Commissioner Walt Gutowski owns the company and abstained from discussion and voting on the issue.

In other action, commissioners also approved an application from Osteria Rossa for a new downtown liquor license last week. Osteria Rossa is a new Italian restaurant going into the ground-floor space at 16 Monroe Center, the former Kendall Building that now is called 616 Lofts at Kendall. The restaurant is expected to open in early December. The application now goes to the state’s Liquor Control Commission for review.

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