GR gives tax breaks to three firms
Business plans from Hearthside Food Solutions, Atomic Object and the Harmony Brewing Co. so impressed Grand Rapids city commissioners last week that they awarded the firms tax breaks. Two of the approved abatements were for industrial exemptions and one was for personal property.
The total investment planned by the three businesses tops $3.3 million and promises to create 98 new jobs and retain 283 more. The deals appear to be good for the city’s tax revenue, too. Nearly $7,750 in property-tax revenue will be waived for the companies each year, but the city stands to gain about $27,000 annually in new income-tax receipts from the new jobs.
The largest of the three investments will come from Hearthside Food Solutions. The company plans to spend $2.5 million on a new oven and invest $500,000 into renovating its plant at 2455 Oak Industrial Drive NE. Hearthside plans to create 75 new jobs.
“Hearthside Food Solutions LLC is a national contract baking company producing nationally branded baked goods. Hearthside services include product development, production and processing, packaging and supply-chain services,” said Kara Wood, city economic development director. “They are also seeking a tax credit from the state of Michigan.”
Software developer Atomic Object expects to make a personal-property investment of $72,500. The firm plans to create five new jobs in the first year of its five-year tax abatement and 30 more in the following four years. The starting hourly pay at the firm is $32.38. The state also has awarded Atomic Object’s project a high-tech tax credit worth $162,000. The firm is located at 941 Wealthy St. SE.
“They create computer software programs for a wide variety of industries including testing and measuring, process improvement, automotive, health care, insurance, financial services, distribution and education,” said Wood.
The Harmony Brewing Co. plans to spend $292,000 to turn the building at 1551 Lake Drive SE into a micro brewery and pub. Bear Manor Properties owns the building and will help the brewer transform the empty structure into a viable business. Harmony will make and sell its brews there and also offer food service. Harmony Brewing expects to create 18 new jobs through its investment.
“The project puts a vacant, deteriorating building back into productive use and creates jobs for the local community. Plus, its presence will create a walkable destination and identity for the neighborhood,” said Wood.
Commissioners also approved an industrial development district for Grand River Aseptic Manufacturing at 140 Front Ave. SW last week, and set May 24 as a public hearing date for the firm’s tax abatement request. GRAM plans to invest $4.4 million into turning a portion of the old warehouse, which is owned by Grand Valley State University, into its production facility and also buy some needed equipment. The company expects to add 10 new jobs to its current work force of 12; the average hourly wage for its employees is $38.47.
“GRAM is a newly formed life science business serving clinical trial customers. GRAM will manufacture small-run, high-value clinical drugs that most large pharmaceutical companies cannot produce profitably. The focus will be on producing aseptic (sterile) and lyophilized (freeze-dried) compounds,” said Wood.
Commissioners also set aside May 24 to hold three public hearings for Offsite Lake Drive. One is for a brownfield; the other two are for an obsolete property rehabilitation district and an obsolete property tax exemption.
Offsite Lake Drive plans to renovate the first floor of 1415 Lake Drive SE, a building it owns and which is known by some as the Kingsley because it was designed by architect George Kingsley in 1927. The original ground-floor storefronts have been boarded up since 1954.
Offsite Lake Drive has hired Bazzani Associates to manage the renovation project that’s expected to cost $1.5 million, be done to historic standards, and feature “green” upgrades.
“The rehabilitation will include some internal and external demolition, asbestos abatement, a complete internal renovation of the 14,700-square-foot first floor including 12,000 square feet of new retail space, and improvements to facilitate better access to the upper floors. As this is a historic building, the exterior will be renovated in conformance to the Secretary of the Interior’s standards,” said Wood.
Offsite Lake Drive hopes to complete the project by October 2012 and add enough retail tenants to create from 20 to 60 new jobs. “I think this project is going to transform Eastown,” said Commissioner Rosalynn Bliss.
With the state Legislature likely to grant Gov. Rick Snyder’s wish to eliminate the Michigan Business Tax and the brownfield tax credits that come from it, Offsite Lake Drive will be one of the last local firms to collect the credit — but not the last.
“We’re using last year’s credit allocation, so we’ll probably have (brownfield) projects into September,” Wood said.