WHITEHALL — After some discussion among the Whitehall city council at its regular Tuesday meeting, the council unanimously approved a 12-year tax abatement for a large plant expansion at Howmet Aerospace’s Plant 10 in Whitehall.
The abatement, a common practice between companies and municipal governments, will allow Howmet to pay less than the usual property taxes on its new plant for the next 12 years, after which it will begin paying full property tax. According to the council resolution on the matter, even with the abatement the city projects $610,000 in tax revenue in the first year of the agreement.
The building is already in progress at Howmet, with construction beginning in full this summer. The company considered building in both Tennessee and Texas before deciding to bring its expansion to Whitehall. Jim Vresics, director of continuous improvement and operations at Howmet, presented on behalf of the company and said the new plant will be focused on constructing the ceramic cores that cool the turbine blades the company produces.
The council spent some time going over the abatement, with councilmen Scott Brown and Tom Ziemer registering the hope of lowering the abatement’s time frame to seven years. Brown, who worked at Howmet for 41 years, noted that on principle he is against any such abatements and that his objection had nothing to do with the company, and Ziemer said he wanted to ensure Howmet’s claims that the new plant will produce 300 new jobs in the city would be fulfilled.
After it was noted that the competition to be the site for this plant had been fierce - Huebler noted the state of Michigan also committed $6.6 million to the project and that the state has not historically provided as many incentives as other states to businesses - the two councilmen agreed to withdraw a motion to amend the abatement to seven years and proceeded with the original vote. Other city council members stated they understood Brown’s and Ziemer’s objections, but did note that the city sees a lot of benefits from the relationship with Howmet, as many of its employees live and spend money here, and if Whitehall did not offer abatements, other municipalities would. Councilman Steve Sikkenga offered that past abatements offered to Howmet have expired and the city is now collecting a healthy amount of tax revenue from the company, stating, “Half of (this plant’s property taxes) is better than nothing.”
Vresics, who said he was the first plant manager at Plant 10 when it opened in 1999, said the company values its relationship with Whitehall and the region at large, which was a factor in the decision to build the new plant expansion here. The new plant, he added, is a $107 million project, of which about $64 million is the building itself.
The council also unanimously approved amendments to the Local Development Finance Authority and Tax Increment Finance Authority plans. Huebler said the primary objective of the amendments was to focus on road improvements within the territories covered by those two finance authorities.
