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City trying to recoup more than $800K in back taxes

ALPENA–The City of Alpena is taking action to recoup more than $800,000 in back taxes from a local manufacturer.

At Monday’s Alpena Municipal Council meeting, council voted unanimously to have city attorney Bill Pfeifer serve the Alpena Prototype Biorefinery LLC, American Process Inc, and GranBio LLC a notice of seizure of personal property for unpaid personal property taxes.

According to Clerk/Treasurer Anna Soik, there is $678,787 due in delinquent taxes on personal property for years 2016-2019. That total includes interest and penalty fees. They owe another $157,666 for 2020 summer and winter personal property taxes.

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 Decorative Panels International.

Now, the plant is operated by GranBio, and produces wood molasses, which is used for feed pellets for livestock.

GranBio is in a pinch because the previous owner lost a tax-exempt classification when it started producing a different product. This breached a deal the company made with the Michigan Economic Development Corp.

The MEDC had contributed funding for the plant’s construction, and overall $22 million in investment for the project.

GranBio was trying to get the tax-free Renaissance Zone classification reinstated, but it must be current on all taxes to do so.

The move means the city may take ownership of any real property inside the facility. Pfeifer said the specialized equipment in the plant may be sold to recoup what it is owed, with any additional funds over that amount returned to the property owner.

Pfiefer said he isn’t sure how the companies will respond to the notice of seizure because there are a lot of moving parts involved.

Pfeifer said the city and county have tried to work with the business to find a solution that benefits everyone involved. So far, there hasn’t been a plan approved by all sides that would allow the plant to stay open, and allow local government to receive the money owed. He said in other tax disputes, often deals are reached, but so far the issue with the refinery is still up in the air.

“The city has utilized repayment agreements in the past,” he said. “Sometimes they get several years to pay what they owe, and sometimes several months. The city is not in the business of seizing property, and would rather see the place open.”

Property owners who are three years past-due on their tax obligation, can have their property foreclosed upon by the county treasurer.

Currently, Alpena County is trying to recoup about $150,000 owed by the refinery for tax years 2018 through 2020. If it doesn’t pay the $63,650 it owes from 2018 by March, Treasurer Kim Ludlow will foreclose on the building and land. Its outstanding tax bill from 2019 is due in March 2022.

The owners of the plant have paid for the most overdue year of taxes at the last moment several times to avoid foreclosure. Ludlow said if that is the case in the coming weeks, foreclosure would be delayed again.

When asked how much faith she had in the company’s taxes being paid in their entirety, Ludlow was frank in her response.

“None,” she said. “We have been to court three times, and they were given an extension because of COVID, and here we still are.”

The county used money from its tax revolving funds to pay the plant’s tax obligation to area schools, Alpena Community College and other entities. If the companies do not pay past-due balances, each entity may have to pay the county back what was given to them out of the revolving tax fund in what is known as a charge-back.

Ludlow said she hopes it doesn’t get to that point.

“Right now, It’s a mess,” she said. “An absolute mess.”

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