Incentives Revive Life Savers Plant
Fusion Properties Inc. plans to use the $1.1 million captured through tax-increment financing to pay for asbestos abatement and demolition needed to convert the 400,000-square-foot factory.
The plant closed in January 2002, putting more than 600 people out of work.
Fusion's president, Doug Gulker, said the firm will invest up to $3.5 million into the project to create up to six industrial spaces within the plant to lease to manufacturing-related business.
He said the financial assistance from the Michigan Economic Development Corp. (MEDC) helps make the project more financially feasible and better enables Fusion Properties to provide firms cost-efficient space.
The project otherwise "would have been very difficult to do" and required pre-leasing of much of the space before renovation work began, Gulker said.
"It kind of gives us a little more staying power," he said.
The Michigan Economic Growth Authority approved the tax incentives for Fusion Properties last month. The tax-increment financing package will allow the city of Holland to capture $500,000 in local property-tax revenues and $600,000 in state revenues to help Fusion Properties defray part of the project's cost and restore the plant to use.
Tenants moving into the facility also become eligible to apply for a 10 percent single business tax credit for new equipment purchases and facility improvements.
"Life Savers was an important symbol to Holland's regional community," said Don Jakeway, MEDC's president and chief executive officer. "Revitalizing this site will turn the tables, creating opportunity and fertile ground for future investment."
Given the job losses in the Holland area in recent years, particularly in the office furniture industry, city leaders say the transfer of future tax revenues to a project with the potential to create hundreds of jobs is well worth it. The state incentives are available under the state's brownfield law.
"When Michigan communities are faced with the reality of vacant industrial buildings, we can either sit back and watch them rust in place and wish for the image to improve, or those in the public and private sectors can work together to bring back the vibrancy of the past," Holland Mayor Al McGeehan said.
Additional state support for the project came when the Legislature passed — and Gov. Jennifer Granholm signed — a bill redefining the initial taxable value of brownfield properties. Without the bill amending the state's Brownfield Redevelopment Act, the initial taxable value on the Life Savers plant would have included equipment earlier removed by previous owner Kraft Foods.
Since acquiring the plant last year, Fusion Properties has sold off 20 acres of the surrounding 80 acres and has another 20 acres on the market. Within the plant, located on M-40 on the city's southeast side and near I-196, Fusion Properties will seek to create industrial spaces for tenants needing 25,000 square feet to 100,000 square feet.
The "perfect" scenario, Gulker said, would be signing a growing small company that can move in and then expand within the facility.
The former Life Savers plant is now home to one small company, Midwest Pallet Co., which occupies 27,000 square feet. Fusion Properties presently has four proposals out to prospective tenants, Gulker said.
"We're getting a good amount of activity," he said.