Hillsdale’s City Council voted unanimously on Oct. 1 to grant DowDuPont Inc. a tax exemption that will enable it to expand its Hillsdale Dow Automotive plant.
Located in the Hillsdale Industrial Park, the Hillsdale Dow Automotive plant manufactures glass bonding and structural adhesives used in the automotive industry. Established more than 40 years ago, it currently employs nearly 80 workers. Increased demand for the adhesives it produces and the recent demolition of an outdated DowDuPont facility at the same location created the need for the chemical giant to add on to its Hillsdale facilities.
“We are happy that the region is doing well and we’re proud to be part of that success,” said Rob Shier, Site Manager at the Hillsdale plant.
DowDuPont determined it would need to expand its current facilities by 6,255 square feet and construct a small pole barn storage building on the premises in order to enable its operations to reach targeted capacity. The construction project will cost an estimated $694,970.
Michigan’s Industrial Facilities Exemption encourages companies to improve their existing facilities and construct new ones by exempting them from the full increase in ad valorem tax that their expanded or new facilities would cost for up to 12 years. It applies only to facilities in zoned industrial areas.
Upon assessing the economic ramifications of DowDuPont’s plan for expansion, the Economic Development Corporation Business Review Committee determined that granting DowDuPont the exemption would impact the city positively.
Hillsdale City Assessor Kimberly Thomas said that the committee endorsed the exemption based on DowDuPont’s excellent track record of service and commitment to the community, its consistency in paying taxes and utility bills on time, its utilization of local contractors and labor pools, and its favorable projection of job creation.
Thomas also explained that granting DowDuPont the Industrial Facilities Exemption will not decrease the city’s net tax revenue.
“The ‘exemption’ is actually an agreement by City Council to levy a specific tax calculated at only half the ad valorem rate for up to 12 years against the value of the new construction,” she said.
Had DowDuPont assumed the full ad valorem tax the expansion of its facilities will cost, it would have been assessed a total of $50,000 over the next 12 years, but the exemption will relieve it of half that. So while the city forfeits $25,000 in granting the exemption, it will also receive $25,000 that it would not have gained absent the DowDuPont expansion.
Thomas also explained that because the Dow Automotive Plant is situated in an industrial park, it already has the infrastructure it needs, and the expansion project is therefore not anticipated to be at any additional cost to the city. Furthermore, increased production at the plant will generate higher utility fees to be paid to the Hillsdale Board of Public Utilities.
Thomas and Hillsdale Mayor Adam Stockford agree that DowDuPont’s tax exemption and resultant expansion will be benefit the Hillsdale’s economy and residents significantly. The DowDuPont expansion is projected to add 16 jobs to the Hillsdale economy within two years, and will increase traffic and to other local businesses.
“The company and its employees will spend money in the community for things like housing, food, gas, and other supplies,” Thomas said.
According to Stockford, DowDuPont’s expansion is also an indication of Hillsdale’s industry-centric and business-friendly attitude, and will likely encourage other corporations to consider Hillsdale a desirable location to operate.
“DowDuPont is one of the biggest chemical companies in the world,” Stockford said. “For a corporation like that to take stock in our town is big.”