UFPI Welcome To Mottville

    GRAND RAPIDS — Universal Forest Products’ Eastern Division received $3.7 million in tax-exempt bonds last month for the purchase and renovation of four vacant manufacturing facilities in Mottville Township in southern St. Joseph County.

    Universal announced last fall its intention to buy the buildings and expand its manufacturing operations into Michigan for the first time in the company’s 48-year history.

    The company has 93 facilities in 82 locations throughout the United States, Canada and Mexico, but up until recently only its administrative offices were located in Michigan.

    The facilities total 205,000 square feet of space and sit on 88 acres at 68956 U.S. 131 in Mottville Township, neighbor to White Pigeon Township.

    Two of the four facilities are currently being renovated and will be used in the manufacture of engineered wood products for the site-built construction industry, said company spokesman Mark Deremo.

    The availability of the facilities and their proximity to the Michigan-Indiana state border helped draw the company there.

    The Michigan Economic Development Corp. (MEDC) contributed to the deal with some tax incentive offerings.

    Universal is combining its operations in Elkhart and Syracuse, Ind., and bringing them to the Mottville facilities for “greater efficiency,” Deremo said.

    He said the purpose of moving the operations is simply to grow Universal’s site-built markets in Indiana and Michigan and secure space for that future growth.

    The other two facilities on site will be remodeled and put to use as growth demands.

    “This location allows us to better serve our current customer base and expand a little bit into Michigan,” Deremo added. “Michigan has a number of growing markets.”

    The project is expected to create about 95 new jobs initially and as many as 150 over two years.

    New jobs appear to be a welcome prospect in Mottville, population 1,500, and its neighboring communities.

    The jobs are particularly welcomed because they’re manufacturing jobs, which have an economic multiplier effect, said Bill Cotton, executive director of the St. Joseph County Economic Development Corp.

    “For every manufacturing job you’re generating another 0.61 jobs in support, whether it’s in services or retail,” he said. “Anytime you can generate or develop a company that is a manufacturer, it has a significant impact on a community.”

    The four facilities had been vacant for two years since their former owner, mobile home manufacturer Dutch Housing Inc./Champion Enterprises, closed up shop to move the division to its home base in LaGrange, Ind.

    Mottville Supervisor Brenda Hagen estimated the plant employed upwards of 200 people from Mottville, White Pigeon and the surrounding areas, including towns across the Indiana border.

    The response to the reopening of those facilities has been “pretty positive,” Hagen said.

    “I’ve had a lot of people calling me wanting to know where they can fill out an application.”

    Universal’s Deremo has noted a high level of interest, too.

    “We’ve already had a number of people knocking on the door down there looking for opportunities,” he said.

    The MEDC offered Universal an incentive package that included a single business tax credit valued at $852,000 over 10 years.

    The Universal project will provide an estimated $5.4 million in revenue to the state over the life of the tax credit, for a net gain of $4.6 million, the MEDC estimates.

    The MEDC also worked with Universal on securing the $3.7 million in Industrial Development Revenue Bonds (IDRBs), which can be used toward the purchase or renovation of existing manufacturing facilities or toward the purchase of land and equipment.

    Using federal dollars allocated to the state treasury, the Michigan Strategic Fund issues the IDRBs on behalf of the borrower and lends the bond proceeds to the borrower.

    Last year, nearly $190 million was allocated to Michigan, said MEDC spokesperson Susan Novakoski.

    IDRB financing lowers the cost of borrowing because the interest paid to the bond buyer is exempt from federal, state and local taxes.

    To qualify, the project must either create new jobs or retain jobs that would have been lost if the project was not undertaken.

    For manufacturing projects such as Universal Forest Products’, 95 percent of the bond proceeds must be used to acquire land, building and equipment directly related to the manufacturing process.

    The MEDC basically serves as the channeling organization for those monies.

    The underwriter determines the payback deadline, she said. In Universal’s case, the bonds mature in December of 2022.           

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