Sheet Metal Stamping Simulation

Some tool and die manufacturers are asking the city to give them tax breaks as they seek to retool their operations.At least one company, and possibly as many as three, could file requests over the next couple of months to be included in tool and die renaissance recovery zones, as city officials consider a policy dealing with them.

"This is one of the ways I can possibly see helping us reinvest in technology and equipment," said Bob Aylsworth, operations manager for BuhlerPrince Inc.The diecast machine manufacturer has seen its work force fall from 109 employees to 69 during the past three years, a result of the economic downturn and competitive pressure from lower-cost firms in China and other countries.

BuhlerPrince could save up to $140,000 in taxes, most of them from the Michigan Business Tax, if it gets approval to join a tool and die renaissance recovery zone, which could waive almost all local and state taxes for up to 15 years.The company is seeking to join a zone that includes companies in Macomb, Berrien and St. Joseph counties, said consultant Cindy LaGrow.

"Most of these companies are heavy on the medical (equipment) side, heavy on defense, or heavy on (automotive)," she said, noting that one of the purposes for the recovery zone designation is for companies to share information and ideas for new business.BuhlerPrince, which has delayed investing $11 million in new machinery and equipment at its facility at 670 Windcrest Drive by two years, has slashed costs to stay competitive.

"We've done layoffs; we've frozen wages; we've had salary concessions; we've increased health insurance co-pays," Aylsworth said.Two Holland firms already are in tool and die recovery zones, although one of them, LS Mold Inc., has its six-year tax abatement expiring at the end of the year. The family owned company is expected to seek another designation, said Dan Kolean, an accountant for LS Mold.

"The first time, it kept them in business," Kolean said. "The second time, I think it can help them expand."LS Mold, which employs 22 people, could save almost $39,000 in taxes with a new renaissance zone designation. Another company, STM Manufacturing, received a six-year tax break from the city in 2007 but will soon begin paying a portion of its local and state taxes next year, with that amount to increase in 25 percent increments annually, said Greg Robinson, assistant city manager.

Under the proposed policy, the city could approve a resolution of support for a tool and die renaissance zone for between 5 and 15 years, as long as it is current on its property taxes and complies with state requirements. The Michigan Economic Development Corporation has the final say on renaissance zone requests, LaGrow said.City Council members aren't expected to decide on the tool and die policy until next month, but some expressed concerns about granting additional tax incentives while trying make sure they have enough revenues to provide services.

"If a fire breaks out, (the company will) expect the fire truck to roll up, and if there's a break-in, they expect the police," Mayor Pro Tem Bob Vande Vusse said.