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The corner of Uran Street and Indus­trial Drive. Nic Rowan | Col­legian

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.”