Challenge Manufacturing Co. closed last week on the $6.3 million acquisition of the 198,700-square-foot factory and surrounding 86 acres of land on South Pine Avenue, on the city’s southeast side.
The plant has been vacant since June 2002, when Herman Miller consolidated seating production at its Greenhouse plant on Adams Street east of Holland.
At the urging of the plant’s buyer, which remained unidentified until last week, city leaders began examining the new policy that sets down criteria for issuing a tax abatement under Public Act 328. The measure allows communities to grant a manufacturer a 100 percent tax break on all real property for up to 12 years.
Among the criteria in the new city policy the Holland City Council adopted earlier this month is that firms seeking a PA 328 tax abatement must create 100 new, full-time jobs within two years and must renovate an existing plant, build a new plant, or undertake the expansion of a facility, of at least 150,000 square feet.
At a time when unemployment in Holland is high — a reflection of the deep downturn in the office furniture industry — the city was willing to examine and use the PA 328 tax abatement to bring in new manufacturing jobs, Assistant City Manager Greg Robinson said.
“We think it can provide a great incentive for the city,” Robinson said. “Just the opportunity to attract that many jobs is too good to pass up.”
Holland has just three industrial facilities that qualify under the new policy’s criteria: the Herman Miller seating plant, the former LifeSavers plant and the former GE plant. A Grand Rapids developer is seeking to bring new tenants into the LifeSavers plant and the present owner of the GE facility leases it out for manufacturing and office space.
The city would use the PA 328 abatement on a “very limited” basis, Robinson said.
Despite that limited use, Holland Area Chamber of Commerce acting president Jane Clark welcomes the city’s action. The tax abatement is a nice option to have available in the future when a large industrial facility becomes vacant.
“We appreciate their flexibility in using all the opportunities available to enhance economic development in our community,” Clark said. “It’s a great tool to have in our economic development toolbox.”
The sale of the Herman Miller plant came about a year after it first went on the market, said Jeff Cutler, a director of corporate services for CB Richard Ellis, the commercial real estate firm that handled the transaction.
Herman Miller had three offers for the site: One for the building, one for the land and one from Challenge Manufacturing for both, Cutler said.
Challenge Manufacturing plans to open metal stamping and assembly operations in the plant, Cutler said.