It appears American Axle is planning to request a tax abatement from Oxford Township, but the corporation’s going to run into stiff opposition from Treasurer Joe Ferrari.
‘My opinion’s never changed ? tax abatements don’t work,? he said.
At the township’s Feb. 13 meeting, the Detroit-based American Axle and Manufacturing, Inc. is expected to request an Industrial Development District (IDD) be established for its new manufacturing facility located at 2300 X-Celsior Drive, across from Steel Master Transfer, Inc., just west of M-24.
‘That’s what first has to be established in order to consider a tax abatement,? Ferrari explained. ‘They have to have that setup in order to even be considered.?
If the township board tells American Axle it doesn’t wish to establish an IDD, the prospect of a tax abatement becomes a ‘moot point,? he said.
The township has the authority to grant tax abatements for real and/or personal property that can last up to 12 years. Instead of the property tax, the company pays an Industrial Facilities Tax (IFT) that reflects the abatement savings.
In this case, the IFT would be computed at half the local property tax millage rate, plus the 6-mill State Education Tax (SET). This amounts to a reduction in property taxes of approximately 50 percent.
However, Ferrari said the new Michigan Business Tax is ‘supposedly? going to eliminate and replace the current 6-mill SET and 18-mill non-homestead tax levied on all industrial properties for school district operations.
‘Take those out and what are you going to be abating?? the treasurer said. ‘Fire? Police? You’re not really abating that much.?
Renee Rogers, spokesperson for American Axle, had no information on the company’s request to establish an IDD. ‘That could be, I just don’t know,? she said.
Founded in 1994, American Axle designs, engineers, tests, validates and manufactures driveline, drivetrain and chassis systems, related components, and metal formed products for light trucks and buses, sport utility vehicles, crossover vehicles, and passenger cars. American Axle already has one facility in Oxford, MSP Industries located at 45 W. Oakwood Rd.
The corporation, under the name Oxford Forge, Inc., purchased the vacant nearly 90,000-square-foot building at 2300 X-Celsior Drive on Sept. 4, 2007. The building previously housed Talon Automotive Group’s Hawthorne Production Stamping Plant.
Since then, the company has been refurbishing the facility to meet its manufacturing needs. ‘I know that they’re working on setting things up,? Rogers said. ‘We’re not operational yet. We plan to be operational sometime next month or March.?
Rogers couldn’t say how many workers the new facility would employ, but inside sources told the Leader back in September 2006, it could mean approximately 80 jobs right away and up to 200 jobs in total if future plans for expansion are implemented.
Ferrari is dead-set against granting American Axle any tax abatements.
‘There’s been a ton of research (on tax abatements),? he said. ‘It says basically they don’t work. I wish they did.?
The township currently doesn’t have any active tax abatements. ‘We had them at one time,? Ferrari said. ‘We eliminated them.?
Based on local history, most of the time when abatements are given, the company that received it did not ‘last the length of? it, meaning the business closed or left town before it expired and the local governments could derive full property tax benefits, according to the treasurer. Ferrari cited Mackie Automotive and Saturn Electronics & Engineering as examples. Both were given multiple abatements by the Village of Oxford.
Mackie closed a while ago and Saturn, now owned by the Eaton Corp., announced last year it was planning to shut its doors by April and move jobs to Mexico.
Ferrari said the last abatement given out by the township was in the mid-1990s to Steel Master Transfer, Inc. for a two -year period.
The treasurer said he’s also ‘done a lot of research on American Axle? and the corporation’s paid millions of dollars over the years to Co-founder, Chairman and CEO Richard Dauch. ‘My theory on that has always been if you can afford to pay your executives that much, you can afford to pay the taxes to support our community,? Ferrari said.