Paragon Die & Engineering hosted a Smart Manufacturing Celebration in April to show off the new space. Courtesy Paragon D&E
A pair of local manufacturers are digging deeper into their native soil.
Cascade Township recently approved three industrial facilities tax (IFT) exemptions for ADAC Automotive and Paragon Die & Engineering to expand in the township.
ADAC is a maker of automotive parts, including door handles, while Paragon D&E makes injection molding and other specialty tooling and machining for the plastic and composite industries.
IFT exemptions enable companies to be eligible for certain tax savings during an agreed upon period, which can be between one and 12 years, according to the state of Michigan.
The certificates provide tax incentives to manufacturers to support the renovation and expansion of aging facilities, to assist with the development of new facilities and to promote the establishment of high-tech facilities.
They are given to companies to encourage growth and investment within the township.
As a result of the IFT exemptions from Cascade Township, ADAC and Paragon D&E are spending more than $26.2 million combined on expansion and workforce investments.
The Business Journal previously reported ADAC Automotive on June 7 broke ground on a new headquarters and Innovation Center at 5716 Eagle Drive SE.
Jim Teets, ADAC president and CEO, said the total project cost will be “north of $25 million,” counting furniture and technology investments.
He said ADAC shopped around for about six months trying to find the right place before deciding to use its existing property for the campus.
“We had the choice to do what we ended up doing, or we were going to buy a greenfield site out at the M-6/East Paris corridor,” Teets said. “Or, a third option was to find an existing building that would handle everything we needed, and we never found it.”
When ADAC shifted to the current plan, it worked with Integrated Architecture and Custer on “planning and discovery” to help determine what was needed in a new building and workspace.
Staying in Cascade Township worked out for the best, Teets said.
“We knew we wanted to keep our core innovation, R&D and engineering here in West Michigan,” he said, noting the company’s production operations are centered in Muskegon.
“Our roots are here, and one of the key things for us is trying to stay true to our family-owned and family-oriented culture.”
The two abatements ADAC received are for building the new facilities, one of which will have 56,000 square feet of office space, while the other will add 24,000 square feet of space to an existing R&D facility to transform it into the Innovation Center.
The exemptions approved totaled nearly $16.8 million in real property investments for its headquarters and nearly $6.4 million in real property investments for its R&D expansion. Both certificates have been granted for a period of 12 years.
The addition and expansion will allow the company to add 50 jobs in engineering, electrical engineering and information systems during the next three years.
The headquarters building will start out with 175 to 180 employees with a capacity of 230. The Innovation Center will house between 30 and 40 employees with an unspecified capacity.
ADAC also will be investing in training employees using state training grants.
Dave Muir, president of Paragon D&E, said he is as deeply rooted in the township as his company.
“My grandfather and my uncle and Fred Keller helped develop this area dating back to the ’70s,” he said. “Part of what we’ve enjoyed in this development is the central location of people and resources, both to the north and south, and the investment is to make Paragon a strong company in diversification and people.
“It’s a building of capacity and capability.”
Paragon D&E applied for an abatement to add 20,000 square feet to the company’s main manufacturing building so it can house larger cranes to machine larger blocks of steel.
The exemption totals $3.4 million in real property investments and has been granted for a period of 12 years.
The company will be able to add 10 to 20 jobs at its Cascade facility over the life of the abatement. Paragon D&E currently employs 212 people.
Muir said the expansion is about more than equipment.
“The machines/expansion was a large investment — the largest we’ve made in one project,” he said. “But the other area we’re investing is our people and culture. In 2018, we have a $500,000 planned training and investment in our employees.”
He said everyone will be trained — from himself to the plant workers — on topics such as technology, team-building, safety and lean manufacturing.
“Much of the investment Paragon has made over the last 15 years since I’ve been here is swapping out old technology for new technology, which allows us to utilize people for their best, highest use, and so they’re not doing the things they don’t want to be doing anyway,” Muir said.
“There’s no replacement of people with robotics. We need people more and more.”
Muir said Cascade Township is a good place to operate because its focus is on retention of longtime businesses.
“We’ve been around for 75 years, and this is what will ensure we’ll be around for 75 more and beyond. It’s not necessarily the growth, but the strong sustainability and retention,” he said.
Ben Swayze, Cascade Township manager, said ADAC and Paragon D&E are “good, established business partners” and “phenomenal neighbors” for Cascade Township.
“Oftentimes, you’ll get townships that are chasing the next big thing and bringing in new businesses,” Swayze said. “I’m not saying we don’t do that, but we realize there are existing businesses that need more land or new facilities. We’re looking to them to come to us and talk about their growth plans.”
He also hopes other businesses will consider expanding in Cascade Township, whether from within or overseas.
“Every government entity has as its bottom line growing the tax base to provide services to residents and businesses,” Swayze said.
“We want everyone to know we are open for business. We want to say, ‘Hey, Cascade Township will be a partner in your development process,’ then have other companies that want to come in and locate their business here.
“We won’t promise the moon, but we will help.”