State will have final word on Mistequay on Dec. 16
STANDISH — Standish City Council granted Mistequay Group, Ltd., a five-year property tax exemption in August, and on Dec. 16 the Michigan Economic Development Corporation will decide if Mistequay will be approved of the tax relief.
“It’s on the agenda for the Michigan Strategic Fund,” said Mistequay consultant Margaret O’Riley.
She said Mistequay is part of a 14-business collaborative that must be recognized by the state as adhering to the Michigan Tool and Die Recovery Act to officially receive the property tax relief, which will allow the company to be completely free of city property taxes for two years, with 25 percent of the taxes being phased in over the third, fourth and fifth years of the deal.
“The vote (by the state) will not be on specifically Mistequay, but on the whole collaborative,” O’Riley said. “The collaboration is the key, even though the tax relief is the carrot.”
By being part of the collaborative, O’Riley said Mistequay would have increased purchasing power, since all 14 manufacturing businesses could join together to buy materials, saving by buying in bulk. She added the collaborative could also purchase health insurance and other benefits in large quantities, saving even more.
Approval by the state may expose Mistequay to new clients, as well, O’Riley also added, since clients of other tool and die companies in the business collaboration could make recommendations to clients looking for a different service, she said.
However, she stressed the tax exemption for Mistequay is solely dependent on the city of Standish and the state of Michigan, and the other collaborating businesses may not have the same tax relief.
“They’ll have different exemption periods,” O’Riley said. “That part varies a little bit.”
Mistequay, if approved on Dec. 16, will save $13,000 per year in property tax payments to the city of Standish or two years, with a quarter of the property tax amounts (which may go up if new equipment or additions to the building are acquired) being phased in over the last three years of the exemption period, unless the exemption is extended, as the Michigan Tool and Die Recovery Act allows 15 years of tax exemptions. The tool and die company will also save money in state taxes if approved.
While vouching to the city for the relief, Mistequay Vice President Sherry Carpenter said the tax relief would save jobs and allow the purchase of new equipment. As of the August meeting, Mistequay was employing 31 workers, down from 51 at the end of 2007.