By Benjamin Gohs
LexaMar Corporation of Boyne City applied for and was granted a 12-year industrial facilities exemption by the Boyne City Commission on Tuesday Oct. 8.
This tax abatement, the latest of several requests by some of Boyne City’s larger businesses seeking to have the amount of taxes they pay reduced, is expected to retain 345 jobs and add another 42—all of which are full-time.
“You have in your packet the third tax abatement request we’ve had in recent months,” said Boyne City Manager Michael Cain. “We had some earlier, about a month or so ago, from Precision Edge and Classic Instruments with regards to reinvestments they were looking to make in their facilities.”
Lexamar’s proposed plan is to add just over $15.5 million worth of equipment to its facility.
Some of the criteria necessary for a company to receive a break on its taxes includes the promise of new jobs to be created and the quality of those jobs.
“The project will be evaluated every two years to make sure they fulfill their pledges,” Cain said.
A 12-year tax abatement is the longest contiguous break allowed by law.
LexaMar General Manager Charles Siska and Controller Grant Martincheck gave the city commission an overview of their plans.
“Times have changed a lot over the past five years…. The economy was really struggling and LexaMar felt the challenges as well,” Martincheck said. “We have really stabilized, as much of the economy has, and our business is strong right now and in the last few months we have been very fortunate in reaching out to our customers and acquiring some significant new business for the next five-year time-frame.”
Martincheck said his business is very capital intensive and has a large quantity of equipment.
“In order for the mass production that we do we have to make some pretty significant investments. We are buying some new molding machines—three to be exact—and a lot of the support equipment that is required to manufacture the product that we have just been awarded through our contract,” He said. “We’ve come to the city in this very tight, competitive market that we work in every day and we’ve asked for an abatement to assist us in our operations to make sure LexaMar and employees who are there continue on.”
Siska said his market has become much more competitive and that his company is producing twice the amount of products at half the revenue.
Boyne City Mayor Ron Grunch said LexaMar has been a good neighbor and employer in Boyne City for 28 years.
“We’re grateful—truly,” Grunch said
Boyne City Commissioner Tom Neidhamer supported the plan, asking how many current employees LexaMar has and how many it will add.
LexaMar officials said they currently have approximately 345 full-time employees they plan to retain, and plan to hire an additional 42 full-time employees.
Boyne City Commissioner Delbert “Gene” Towne said the city’s number one goal was job retention and that the tax abatement tool was a good way to help accomplish that goal.
Boyne City Commissioner Derek Gaylord also supported the tax abatement.
“The numbers mentioned on jobs—that’s a lot of families. That’s a huge impact on our community,” he said. “I think we should do our part and allow you to do what you do, which is make money and profit which you can keep people employed.”
Boyne City Commissioner Laura Sansom was also in support of the plan.
The amount of taxes LexaMar will save on its projected $15,685,434 in new equipment was not disclosed during the public hearing on the tax abatement.
The motion to approve the abatement was unanimously approved.