City Council approves tax abatements for Ameriwood, Premier

Published 4:56 am Tuesday, October 28, 2008

By By JOHN EBY / Dowagiac Daily News
Dowagiac City Council Monday night approved an industrial facilities tax exemption (IFT) for Ameriwood Industries, 202 Spaulding St.
The abatement applies to personal property investment of $2.562 million for new machinery and equipment and $100,000 for real property building improvements to revitalize manufacturing facilities which almost closed in July 2007 in a shift to Tiffin, Ohio.
Ameriwood expects to retain 24 jobs while creating 50 new jobs in the first year as a result of this investment.
Granting this 12-year abatement will generate $10,715.95 in new city tax revenue annually and increase payroll earned in this community by $1,953,640 in the first year.
Terms are consistent with the city's new economic development policy regarding IFTs.
Council members congratulated Ameriwood's Jim Peterson, Assistant City Manager Rozanne Scherr and Dowagiac Economic Development Director Cindy LaGrow.
"Ameriwood is a subsidiary of Dorel out of Canada," LaGrow said. "Its history is deeply rooted in this community, starting out as Jessco. Rospatch purchased the company. In 1991, it formally became Ameriwood, which established itself as a leader in RTA (ready-to-assemble) furniture. Around 2006, the company started looking at how to better equip itself and be more efficient with a global economy. That led to the very disheartening announcement in 2007, where plant manager Jim Peterson had to tell 100+ employees that their jobs were going to be leaving. It was a pretty easy decision for corporate and Dorel to move all their manufacturing facilities to Tiffin, Ohio, and further service their customers out of their (Missouri) plant, leaving the Dowagiac facility pretty much closed down."
When LaGrow, who had been the city's first economic development director, returned at the beginning of 2008, she approached Ameriwood about what help the city could extend, from assistance for former employees to selling its factory.
"The Dowagiac staff was so focused and so committed to this area," LaGrow told the council, "they wanted us to focus on reinvigorating the company, so that's what we did," including a trip to Tiffin.
"A couple of weeks ago, on Oct. 10, Rose and I were at the facility along with some state folks and Norfolk Southern. We were so pleasantly surprised to see that there are over 100 employees there. This is really a success story for this community. It shows the dedication that the employees had to Dowagiac. Efficiency is up, employment is up and the morale there is up. It was so wonderful to walk through the facility and to see all the smiling faces. We're hoping just to keep ramping this facility up."
Mayor Pro Tem Wayne D. Comstock, who conducted the Oct. 27 meeting in the absence of Mayor Donald D. Lyons, commented, "We owe a great gratitude of appreciation to you and Rose Scherr for your time spent in bringing back Ameriwood."
"The kudos go to Jim Peterson and his dedication to this community," LaGrow said. "We have a good team right now – (City Manager) Kevin (Anderson) and myself and Rose. We're working in tandem with the rest of the city. We all have the right vision in mind, which is prosperous and growing this community. (The white-haired Peterson) got a couple more gray hairs from all this running around. He and his staff at Ameriwood were out in the lead on this project with the foresight to reinvigorate the company."
"I know Jim personally and I know he fought for Dowagiac and for Ameriwood," Comstock said. "You all three did a great job and we appreciate it."
U.S. Rep. Fred Upton, R-St. Joseph, toured Ameriwood last week.
"The abatement calls for 50 percent on personal property taxes over 12 years," Anderson noted.
Also before the council was an IFT hearing for Dowagiac's other recent success story, Premier Tool and Die Cast Corp., 415 N. Paul St.
"It's a similar story, but different," Anderson said, "in the sense that there's a company in the area that's been a success in spite of market conditions in Michigan. We're very pleased to have Premier coming to us with an investment in (ICG) facilities on Paul Street which have been abandoned."
LaGrow said, "Premier started in the early 1960s in Berrien Springs. This evening I have with me Chuck White, machining plant manager. They have facilities in Berrien Springs, Buchanan and New York. They're a major supplier of aluminum die-casting to automotive, military, appliance, furniture and electric industries."
"Over the last 40 years they've established themselves as a leader in the die-cast industry and have grown significantly utilizing technology and engineering," said LaGrow, of Coloma. "That's where their real niche is. Several months ago, we learned Premier was going to be expanding again, either in Michigan or New York. I decided to go out and make a couple of calls. We met and met and met. With the help of state and local incentives, it's brought us here this evening. Premier is going to be expanding its facilities in Dowagiac at the old ICG tech center on Paul Street. Premier is actually one of the die-casting companies in the area which has received some pretty prestigious awards. One from Whirlpool. Several from the North American Die-Cast Association. And several from the Michigan Chamber of Commerce based on their better workplace performance and environmental education. I think it speaks volumes to the type of company that we're attracting into this area. They already have five Dowagiac employees."
One of them is White, who worked at Contech for 23 years before joining Premier 10 years ago.
"We are currently about 60 percent automotive," White told Third Ward Councilman Leon Laylin. "We're pretty diversified. We don't like all our eggs in one basket. With automotive, we ship to Delphi, Ford, Chrysler, GM. We also get into the Whirlpool appliance area, furniture business, military contracts, even some smaller electronics. With our fingers in many different areas, we feel that despite the downturn of the automotive industry, we're still going to survive the economy and advance."
LaGrow said in the IFT Premier promises to create around 30 jobs, "although the numbers and projections are much more than that. We always want to be conservative. They are investing a couple of things. One is the transfer of $994,732.61 in machinery and equipment from Buchanan. The other is new machinery and equipment of $6,640,197.68. These are new purchase orders over a period of time because some of these machines are from Italy or Germany and they take a period of time to build."
Granting this abatement generates $29,325.67 in new Dowagiac tax revenue annually and increases payroll earned in the community by $629,356 in the first year.
"Premier's pretty aggressive," she said. "They're very technologically advanced. I think that's what makes them a leader in their industry. You have two public hearings, two separate agreements and two separate resolutions because of the transfer and the regular tax abatement."
The council also heard from two political candidates, Marcellus attorney Stacey Rentfrow, who is running for Fourth District judge, and Republican Water Resources Commissioner Bruce Campbell, who Nov. 4 faces Edwardsburg Democrat Tony Catanzarite.
Campbell, appointed July 3 to the office formerly known as drain commissioner, has been with county government for 26 years.
Campbell has worked with sheriff's offices in Cass and St. Joseph counties. He spent 10 years as Cass County's emergency management coordinator, eight years as Cass County's address technician and Cass County's soil erosion program enforcement agent for seven years.
Campbell's first month on the job, he joked he was "getting his feet wet."
His second month he drew chuckles by describing his tenure as "treading water."
September, his third month, coincided with record rainfalls.
"I wasn't joking anymore," he said. "It kept our office pretty busy for a couple of weeks."
"I thought you were going to say in September you were in over your head," cracked City Attorney Mark Westrate.
"I might have been going down the drain, but I'm still afloat," Campbell retorted.
The council canceled its Dec. 22 meeting because it falls so close to Christmas.