GRANDVILLE — X-Rite Inc. plans to move its headquarters and manufacturing operations from Grandville to Kentwood and spend $44.5 million over the next five years to expand operations there.
X-Rite intends to redevelop the former Bosch facility at 4300 44th St. SE and transition its entire work force to the new location by the end of June 2006. To start, the company will invest $24 million in the purchase of the property, and renovation and furnishing of 350,000 square feet of space in the 900,000-square-foot vacant building. Over the next five years X-Rite will dole out an additional $20.5 million in capital equipment purchases, as well.
X-Rite will own the 350,000-square-foot portion of the building but not the other half. Spokesman Tyler Andrew said X-Rite’s portion will be separated from the rest of the building and the manufacturing space will be updated to X-Rite’s standards. He noted X-Rite was attracted to the 35-year-old Bosch facility because of its open floor plan, natural lighting and Class A status.
Gov. Jennifer Granholm announced the X-Rite project Tuesday along with four other development projects that collectively are expected to create or retain some 4,111 jobs in the state.
X-Rite employs 440 people locally and expects to create 313 new jobs over the next five years as a result of the expansion. According to an economic impact analysis by the University of Michigan, increased economic activity resulting from X-Rite’s expansion will create another 314 jobs indirectly over that time period.
The company is starting to feel the squeeze at its current headquarters at 3100 44th St. SW in Grandville, which has 52,000 square feet of office space and 100,000 square feet of manufacturing space, said Andrew. The Bosch facility affords the company 150,000 square feet of office space and 200,000 square feet of manufacturing space.
Andrew said X-Rite had been formulating its strategic growth plan for more than a year. X-Rite sells hardware, software and services that ensure color accuracy and markets them primarily to the graphic arts, industrial automotive and retail home décor industries in the Americas, Europe and Asia.
“We looked at a lot of areas within the plan where we would need to accommodate growth over the next five years and beyond, and one of them was facilities. If we were to continue to grow the way we have, would we be able to accommodate growth in this location? That was the question.”
X-Rite considered several different locations in the metro area where it could build a new facility and at some existing facilities on the east side of town, as well as locations outside of Michigan.
Andrew said three dynamics guided X-Rite’s decision to relocate to Kentwood, nine miles down the road from its current headquarters. One factor was the economic environment of the company’s location near RiverTown Crossings Mall and all the new retail business cropping up in that area.
“We realized our property would be attractive for retail, so we took that into consideration,” he said. “The second part of it was really about long-term strategy with our shareholders — adding value in the long run by building and growing our company.”
The third, and probably most important component, Andrew said, was the company’s employees. Among X-Rite employees, the average length of service is 8.5 years.
“That was something that was very important to us as we went through the evaluation process, because obviously a move outside the state would have impacted us heavily. Our employees are really the DNA of our company, and our color expertise is all in-house.”
The Michigan Economic Development Corp. (MEDC) granted X-Rite’s Bosch redevelopment project a Single Business Tax credit valued at more than $10.6 million and offered employee training assistance as part of the deal. The city of Kentwood approved a tax abatement valued at $2.3 million over 12 years to support the project.
“That helped, but it wasn’t the deal maker for us,” Andrew acknowledged. “It did make it an easier decision for us.”
The Right Place Inc. had been working since last summer with X-Rite, its consultants and the MEDC to put together a financial incentive package that would entice the company to stay in West Michigan.
“The competition is incredibly fierce to retain and attract premier advance manufacturing firms like X-Rite and, fortunately, we have the work force, facilities and incentives that make us an attractive, competitive location for such companies,” said Right Place President Birgit Klohs.
Grandville Mayor Jim Buck said the city is disappointed about losing “a valuable Grandville employer” but glad that X-Rite is staying put in West Michigan, which he said “ultimately benefits us all.”
X-rite has had a successful history in Grandville during 20 years of business there, Andrew said.
“A lot of great things have happened here. The first year of operation here we were around $10 million in annual revenues. Now we’re at $126 million.”
Andrew said he couldn’t predict by what percentage X-Rite’s manufacturing base might increase over the next five years.
“A lot of it will depend on how much we grow organically and how much is a result of acquisitions. We’re continuing to pursue opportunities for acquisitions of companies that are in the neighborhood of the color business. We’ve had four acquisitions over the last few years and they’re all integrated and working well for us.”