Township grants tax abatement to local manufacturer

By: Jeremy Selweski | Macomb Township Chronicle | Published October 16, 2013

MACOMB TOWNSHIP — In order to facilitate a massive industrial expansion project that will bring more than a dozen new jobs into the community, township officials decided to give the company a break.

The Macomb Township Board of Trustees unanimously approved an industrial facilities tax abatement for Triumph Gear Systems on Oct. 9. The agreement includes a 50 percent exemption over a period of 10 years. Triumph’s $16.6 million development will include the creation of 15 new jobs to go along with its 220 current positions.

“Tax abatements like this really encourage the growth and development of new or existing companies,” explained Township Clerk Michael Koehs. “That can bring a lot of new jobs into your community, and these are the types of jobs that we always want to have more of: steady, full-time jobs with good salaries and benefits.”

Triumph Gear Systems is part of Triumph Group, Inc., a global aerospace and defense manufacturer founded in 1993. Operating in 64 locations worldwide with headquarters in Pennsylvania, Triumph designs, engineers, builds, repairs and overhauls a broad range of aero-structures, aircraft components, accessories, sub-assemblies and systems.

Local Triumph representatives could not be reached for comment, but Township Supervisor Janet Dunn indicated that with this expansion project, the company is essentially “doubling its floor space” in Macomb Township. In addition to the 15 new jobs, Triumph will be making improvements to its building and property totaling more than $5.2 million and installing new machinery, equipment, furniture and fixtures valued at nearly $11.4 million.

“Something like this has not happened in Macomb Township in a long time, so this is very exciting for us,” Dunn said. “(Triumph) has already been an established company here for quite a while, and they have obviously been very successful. Those are exactly the types of businesses that we want to attract and keep here for as long as possible.”

Bringing more industrial development — and the plethora of jobs that it creates — to the community has been an ongoing push for township officials. In June, Dunn hosted a workshop with more than 20 municipal, county and state officials to discuss the future of the manufacturing industry across the region. Currently, officials are working to update the township’s five-year-old master plan, and as part of that process, they have been talking to the owners of vacant industrial buildings about ways to help them attract new tenants.

Dunn pointed out that more than a decade ago, township officials decided that they wanted to allow tax exemptions in the community and developed a formula for interested businesses to follow. It states that for every $3 million that a company invests, it is eligible for a one-year abatement. Likewise, for every three new jobs that a company creates, it can apply for a one-year tax break.

“If we’re going to give these companies a 50 percent tax abatement, then we want to make sure we’re getting something valuable in return,” Dunn stated. “We’re especially pleased when we can bring in a good number of new jobs.”

According to Township Assessor Dan Hickey, Triumph Gear’s 10-year tax exemption will amount to an estimated $943,000. This includes a tax break of roughly $172,000 during the first year: a sum that will steadily depreciate over time until it reaches about $61,000 by the final year.

Koehs noted that one of the other purposes of a tax abatement is for communities to thank a successful company for choosing to locate there.

“(Triumph) has been here for many years now, and we would like to keep them here for as long as we can,” he said. “We want them to know that we appreciate their business, and we will do what we can to try to help them out. Anytime you can give a company a tax exemption like this, it really gives them a leg up on their competition.”

While that can also cause communities to compete with one another in order to win the affections of business owners, Dunn does not feel that it is necessary to play this game. She believes that companies already want to move to Macomb Township because of the positive assets that it brings to the table.

“We have a lower tax rate than any of our neighbors, and we offer an equal level of services,” Dunn said. “So why would anyone not want to open their business here?”