October 22, 2014

Standish City Council grants 12-year tax abatement for Globe Fire Sprinkler

Courtesy photo
A $1.1 million expansion project is underway at Globe Fire Sprinkler Corporation in Standish.
9/18/13

STANDISH — The Standish City Council granted Globe Fire Sprinkler Corporation a 12-year 50-percent Industrial Facility Tax exemption for a $1.1 million expansion that is expected to add 18 jobs.

Council approved the exemption 5-0 Sept. 16. Council members Jerry Nelson and Ed Reno were absent.

Globe is projected to pay $209,239 in real property taxes over 12 years with the tax abatement. Without the ITF, city assessor Mary Wojtowicz said Globe would pay approximately $380,809 in taxes over that period. Wojtowicz said Globe would save about another $5,000 in personal property taxes over the 12 years.

Under the ITF, Globe’s expansion will be assessed at 50 percent of its taxable value.

To receive the abatement for 12 years, which Globe requested, it had to score more than 100 points on the city’s ITF application, which measures several criteria, including job creation.

“They have a total of 44 points in that section, and that is creating 16-20 jobs, so they’re falling within that range by being 18 positions,” Wojtowicz said.

“Truthfully they only have to create 16 jobs and still come up with the same points,” she added.

There was some discussion about the 12-year period. City council member Tosha Tunney asked if the city could grant a shorter exemption, but then extend it to the full 12 years later, possibly decreasing the likelihood of a default by Globe on a section in the ITF agreement.

Globe President Steven Worthington said his company has continued to grow, even in a difficult recession, and would hold up its end of the deal. He said Globe increased its work force from approximately 80 employees to more than 100 in 2008. Worthington added that with the last abatement approved for Globe, which was in 2011 for eight years on a $385,000 expansion project, the company met its job creation commitment almost immediately.

Council member Doug Ireland said he was concerned about the 12-year time span as well, because if Globe were to default late in the ITF period, it would have to pay back the taxes that were waived prior to defaulting.

Mayor Mark Winslow seemed to think the number of jobs being created was worth the risk.

“Twelve years seems like a lot of time, but it seems like a significant number of jobs are being created,” he said.

Winslow added that the city created its point system for ITF applications to create more city-specific requirements. The ITF has to be approved by the state, but Winslow said the state’s ITF requirements are very lenient.

“The only thing the state requires is that they stay open and they stay in the same location,” he said.

According to Worthington, the Globe project is a 15,000-square-foot addition that will include stamping equipment, fire sprinkler assembly equipment, storage areas and office space.

Copyright © 2014, Sunrise Publishing. Powered by: Creative Circle Advertising Solutions, Inc.