City commission state ratify jobproducing tax breaks


    Grand Rapids city commissioners approved two personal-property tax exemptions last week that promise to bring more than 500 new jobs to the city. Earlier the same day, the Michigan Economic Growth Authority also approved both applications.

    One exemption was for Dematic Corp., which plans to invest more than $11 million into its two Plymouth Avenue NE facilities over the next five years and add 505 jobs that will pay an average of $21.80 an hour.

    “As research and development is expanded in North America, support functions and production will also expand. The products and services to be expanded are research and development, administrative services, sales, and in-house production of customized logistics systems including logistics management, material handling systems, software and material flow technologies,” wrote Kara Wood, city economic development director, in the commission’s memo.

    Dematic Corp. is expected to spend $6 million on new machinery and equipment, $4.5 million on new computer systems, and $560,000 for renovation work to its buildings. The firm designs, manufactures and implements automated material handling systems for an array of businesses.

    The new jobs are expected to give the city nearly $230,000 in new income-tax revenue each year, while the exemption will abate almost $140,000 in state and local taxes for Dematic Corp. annually.

    The second exemption was awarded to Dynamic Captioning LLC, which provides broadcasters with captioning encoding and subtitling services. The company plans to invest $379,000 into equipment and for upgrades to its building at 311 State St. SE. Dynamic Captioning currently is outsourcing its work but plans to bring it in-house with the hiring of 21 employees within a year. The firm hopes to have 40 on its staff within five years. Those jobs are expected to pay an average of $15.53 per hour.

    The city stands to gain nearly $6,800 in new income-tax revenue from the jobs. Dynamic Captioning will get an annual tax break worth $5,222, with $1,222 of that being abated by the city.

    The personal property exemptions are allowed under Public Act 328 of 1998, legislation that was originally sponsored by the late State Sen. Glenn Steil of Grand Rapids.

    The Right Place Inc., the region’s economic development organization, helped to secure both projects for the city. The Right Place President Birgit Klohs said the jobs that Dematic Corp. plans to bring here could have just as easily gone to Europe or to another one of the company’s locations in the U.S. She also said the jobs that Dynamic Captioning will bring to Grand Rapids will help to diversify the city’s economy and build a more sustainable economic future.

    Commissioners also appointed two additional directors to the city’s Economic Development Corp. last week. Edward Carey Jr., CFO of the Roman Catholic Diocese of Grand Rapids, and Dwelling Place of Grand Rapids CEO Dennis Sturtevant were named to help oversee the Health Park Central project.

    Wood told the Business Journal that additional directors are necessary when the EDC issues tax-exempt bonds on behalf of a development, which it plans to do for this project. Health Park Central LLC wants to invest $15 million into the construction of a new three-story office structure adjacent to an existing medical office building at 245 Cherry St. SE.

    Commissioners also held public hearings last week on three more projects. One involved a for-profit entity that was created in August by the Grand Action Committee and the Downtown Development Authority. Grand Rapids Urban Market Holdings LLC wants to turn 3.5 vacant acres at Wealthy Street and Ionia Avenue SE into a year-round urban market that will include restaurants, retail shops and apartments.

    At least $27 million will be invested into the development, which is seeking a tax break under the state’s brownfield statute. The project could create as many as 290 jobs and give the city $214,000 in new income-tax revenue annually. The development firm will apply for a Michigan Business Tax credit worth $5.2 million.

    Another hearing was held for 100 Commerce Development Co. LLC, which plans to renovate the vacant building at 100 Commerce SW into 32 apartments on the upper levels and retail space on the ground floor. The developer, which is investing $3 million into the project, is also applying for a brownfield exemption and hopes to begin construction in December.

    A third hearing was held for H Development Group LLC, which wants to invest $1.7 million into a new veterinary clinic at 1350 Lake Drive SE. H Development is also asking for a brownfield designation.

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