Auburn Bean & Grain to seek tax abatement

Cites higher-than-expected engineering costs

By Kevin Bunch
Staff Writer | news@arenacindependent.com
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LINCOLN TWP. — Auburn Bean & Grain, the crop transportation company working to build a transit facility in Lincoln Township along US-23, is seeking a tax abatement, citing larger-than-expected engineering costs.

Chris Shannon, director of the Arenac County Economic Development Corporation, told the township board at its meeting Aug. 9 that Auburn Bean & Grain has been working through transportation issues with the Michigan Department of Transportation (MDOT) and drainage issues with the county.

“They didn’t want to ask for a tax abatement,” Shannon said. “But they have to due to rising costs.”

Tax abatements can run for a total of 12 years, and reduce the recipient’s tax load by a maximum of 50 percent. Shannon said they are commonly used to spur investment, as the money not being spent on taxes can go toward work on the business.

There are stipulations companies need to follow to maintain an abatement, Shannon said, citing job creation as a major one.

“You will get a boost in your tax base,” Shannon told the board. “It’ll be 50 percent off the bat, but you’re starting at zero, and the other 50 percent can be put into the facility.”

The abatement does not affect the taxable value of the property.

Cliff Vennix, president of Auburn Bean & Grain, has said in the past the facility is expected to cost $7 million, and Shannon said he has already spent $1 million to lay the groundwork, including paying for the cleaning of the Hominga drain extension and meeting MDOT guidelines for transportation.

Supervisor David Hertzberg said the work on the drain is almost complete, but a 60-foot, 15-inch tube needs to be installed across M-10, paid for by the township.

Auburn Bean & Grain needs to install a turn lane along US-23 in front of its facility, and also needs a rail spur that leads to its new facility. Shannon said the company is on good terms with the nearby Helena fertilizer company, and is discussing bringing dry and wet fertilizers in by rail for it to mix on site, lowering costs for farmers.

Shannon also said Auburn Bean & Grain is interested in building a hall capable of seating about 100 people to provide a space for farmers to participate in workshops and programs about new farming techniques and equipment.

The township board agreed to set up a public hearing Thursday, Aug. 23 at 7 p.m. for members of the public to weigh in on the tax abatement. Shannon said the company would have representatives there, and Assessor Allison Chmielewski said invites should be sent out to the other entities the tax abatement would affect.

These include the Standish-Sterling school district, the county, and the Standish Area Fire Authority, she said.

The Auburn Bean & Grain facility is planned to be completed in 2013, in time for the harvest season, and will include additional property space to expand its operations as necessary. It will allow farmers in northern Michigan to bring their product to a closer transportation facility for shipping, reducing their overall transit costs.

“I think it will be really big for the community,” Shannon said. “It’s a great asset that will have a regional impact.”

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