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Tax breaks paying off

Most firms who received tax cuts making promised investments

News Photo by Steve Schulwitz Alpena Lodging, the owner of the Holiday Inn Express and Suites in downtown Alpena, seen here on Monday, failed to file its required annual tax abatement report, city officials said. The report updates the city on capital investment and employment totals. Four other companies provided the information and are at or near the investment and hiring requirements established in the tax deals.

ALPENA — The Alpena Municipal Council on Monday received its annual update on tax abatements still on the city’s books.

The results were positive, for the most part.

Four of the of the five companies have met or exceeded their capital investment goals. Only one fell short on the number of employees it had promised to hire.

Investment and job-creation commitments are typically required by the city to receive the tax breaks.

The council recently passed a sixth abatement, to W.G. Benjey. That deal is awaiting final approval by the State Tax Commission. Benjey will file its report with the city next year.

Dean Arbour Ford filed its last report, as its seven-year abatement came to an end on Dec. 31. It has invested $3.06 million into real and personal property since the approval of the abatement and it also exceeded the number of employees it intended to employ. At the end of 2018, there were 34 full-time workers at the dealership, more than the 23 to 28 it anticipated hiring.

Alro Steel’s abatement finishes at the end of this year. That firm has complied with the conditions of the abatement, as has Dougville-Johnson, whose tax break ends at the end of 2020.

Dave Kneeshaw received an abatement for work done to the former Hunan Chinese restaurant near Starlite Beach, and he has met the required capital investment of $200,000. The estimated employment totals have been on the low side. It has 12 workers in what is now Pompeyos Mexican Grill, which has a five-year lease with Kneeshaw.

The final abatement on the city’s books is for 10 years and belongs to Alpena Lodging, which owns the Holiday Inn Express and Suites near the Thunder Bay River downtown. That abatement ends in December 2024, but the firm had not submitted its 2018 report, yet. It was late filing the update last year, as well.

City Clerk Anna Soik said she has continually reached out to the company’s executives, but still hasn’t received the report. City officials are considering a tougher stance.

City Manager Greg Sundin said staff will review the agreement and then decide what path to take.

“We need to tell them that this is a requirement and if they don’t (turn it in), then we will re-examine the agreement.” he said. “It may allow for a payback of abated taxes or that we can contact the Department of Treasury about possibly revoking the (agreement). Hopefully, that will be enough to get them to comply.”

In its report last year, Soik said the hotel owner fell short on investment, which was projected to be about $8.25 million but ended up at only about $5.5 million at the end of 2017.

The employment numbers required by the deal were met.

Steve Schulwitz can be reached at 989-358-5689 at sschulwitz@thealpenanews.com. Follow him on Twitter @ss_alpeanews.com.

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