Plant, city seek tax deal
ALPENA — An Alpena company that is nearly three-quarters of a million dollars behind on its property taxes and facing foreclosure by Alpena County is seeking tax forgiveness from the city.
A foreclosure hearing for the company, GranBio, is slated for Feb. 4. GranBio can pay its 2017 taxes to avoid foreclosure.
Alpena GranBio Plant Manager Mark Szczepanik said the company has no comment on the issue while negotiations are ongoing.
GranBio, which owns and operates the former bio-refinery behind Decorative Panels International, is about $750,000 in the rear to the city for real and personal property taxes.
Of that amount, the county’s tax revolving fund is owed more than $113,000, because the county had already paid the city, Alpena Community College, and other taxing institutions. A county tax revolving fund is used to pay cities, villages, townships, and others the taxes they’re owed while the county collects overdue taxes on their behalf.
GranBio is in the pinch because the previous owner, American Process, lost a tax-exempt classification when it started producing a different product, which breached a deal the company has made with the Michigan Economic Development Corp.
The MEDC had contributed funding for the plant’s construction.
GranBio is trying to get the tax-free Renaissance Zone classification reinstated, but it must be current on all taxes to do so.
Company officials claim that, if the city doesn’t grant full tax forgiveness, they may have to close the plant, according to city officials. That would mean about a dozen people would likely lose their jobs.
On Monday, a team of local government officials, attorneys, state lawmakers, and executives from GranBio met to work toward a resolution that would keep the plant open.
Alpena City Manager Rachel Smolinski said Friday that, after the meeting, the city gave GranBio a proposal that Smolinski believes could help the plant remain open and provide the county and city a portion of the tax revenue to which they’re entitled.
Smolinski couldn’t give details about that proposal, but said the company could issue a counter-proposal.
The matter needs to be settled soon, or Alpena County could foreclose because the company has racked up three consecutive years of unpaid taxes.
Smolinski said she is hopeful middle ground can be reached.
“Ultimately, we would like for them to pay everything they owe, but we do want to work with them on getting the Renaissance Zone reestablished, because we do believe in what they are doing,” Smolinski said. “We’re trying to do that and balance that out with our obligations to the taxpayers.”
For four years, GranBio has not held up their end of their taxpaying responsibility, Alpena County Treasurer Kim Ludlow said. As a result, the amount of money in the county’s tax revolving fund has dropped.
In 2016, the company paid its property taxes the day before it was to be foreclosed upon, Ludlow said, and there hasn’t been any money paid since. Ludlow said the county will continue to move forward with foreclosure, though officials hope a viable solution is found and the tax revolving fund is paid back in full.
“The fund has taken and a big hit because of this, but, if they don’t pay their taxes, the county treasurer will take ownership of the plant,” she said. “We really don’t want to own a plant.”
Ludlow said it is possible GranBio shows up in court and asks for more time to pay, or seeks an injunction of the foreclosure. She said company officials may also decide to pay what they owe at the last minute, as they did previously. That would postpone foreclosure at least for the time being.
Smolinski said the issue has gone on long enough and needs to be settled soon.
“This has been an ongoing issue since 2016, and we want to see it resolved, because the last thing anyone wants to see is to see the plant foreclosed upon,” Smolinski said. “We all want to see this be successful and to find a solution the city, county, and taxpayers can live with.”
When American Process opened the plant, its intended use was to produce bioethanol, but little of that was made, mainly because of issues with the process that utilized waste from DPI.
Now, the plant produces wood molasses, which is used for feed pellets for livestock.
Steve Schulwitz can be reached at 989-358-5689 at firstname.lastname@example.org. Follow him on Twitter @ss_alpenanews.com.
CORRECTION: This story has been updated to reflect GranBio has about a dozen employees. The number of employees was incorrect in an earlier version of this story.