September 3, 2014

Standish council approves Vantage Plastics tax abatement

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STANDISH — The Standish City Council approved going ahead with a tax abatement for new equipment and construction at Vantage Plastics during its monthly meeting Dec. 17.

Andrew Weiss, a controller at Vantage Plastics, said the company has been working hard on installing a new thermal forming unit at their Standish plant — a massive machine that can thermally form more parts than their three current machines combined — as well as other equipment. The company has also had Consumers Energy install new electrical lines near the plant on US-23 to power all of this equipment.

Due to the cost of the investment, estimated by Weiss to be about $1.79 million, the company wants a 10-year tax abatement on the new equipment and the changes to its property to house and operate the machines.

“It’s 77,000 pounds of equipment,” Weiss said. “We’re adding new capabilities, such as a new grinder for increased output, two robotic trim cells, and a compression tester, to test products before we put them into production.”

Under an abatement, the company would pay only half of the estimated taxable value on the additional equipment and facilities to the relevant municipality, county, and surrounding units such as the library or emergency services.

Abatements are used to encourage greater investment by companies in their property, and municipalities gain additional income they otherwise may not have gotten at all.

In return, the businesses must fulfill certain requirements. Weiss said Vantage Plastics is looking at hiring 11 new employees to operate the additional machinery, adding that if their orders pick up and the machines need to run more hours of the day, they could need up to 30 new hires to keep things running.

“It will allow us to look at future expansion, with the abatement,” Weiss said.

He noted the new thermal forming unit is a new model — built around 2009-2010 — while the existing machines were built in the 1990s. As a result, he said the new machine requires a slightly different skillset.

Weiss said the company planned on going forward with the additional equipment even if it did not get the tax abatement, but the council was on-board with the proposal.

“We’re looking at the long-term sustainability for the company,” Councilman Jerry Nelson said before the council approved the abatement. “It’s not just about 11 jobs, though that does help.”

County Commissioner Mike Snyder said he was encouraged by the company’s commitment to the community, praising Vantage Plastics for its support of Standish and the county as a whole.

The only potential snag is coming from the state. City Manager Curt Hillman said Gov. Rick Snyder signed into law an act that would phase out the personal property tax on business equipment. He was unsure how that change would affect the tax abatement, especially since the law will also require a public vote in August 2014 before fully taking effect.

Weiss said the company is looking at getting everything set up by Jan. 31. The thermal forming machine took 15 semi-truck loads to bring up, and a wall had to be removed at one of the buildings on the Vantage Plastics property to get the parts inside and rebuilt.

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