All four tax abatement requests from Chelsea Milling Company, which total about $7.871 million, were unanimously approved by the Chelsea City Council Monday night.
The vote followed a public hearing on the requests during which no one spoke.
“These are long-term investments in the community and in the company,” said John Powers, who represented the company.
The first request was for a 6-year, $1.24 million abatement in personal property for a new automated bag packaging line.
The second was for a 4-year, about $410,500 in personal property for the installation of a new mixer to supply a 50-pound bag line.
The third abatement was for 8 years and about $647,000 in real property and about $2.908 million in personal property for the construction of bulk ingredient storage tanks.
The fourth request was a 7-year, about $844,000 in real property and about $1.822 million in personal property for equipment that will increase the transfer rate between the flour mill and the mixing of various flours for the operation.
Powers said that because less people are baking at home, Jiffy plans to expand its sales into a larger market, which includes schools, hospitals, institutional and correctional facilities or “mass feeders” which require larger quantity packaging of the company’s mixes.
He said this new equipment will facilitate 25-50 pound bags on the high end and 5-10 pound bags on the lower end.
“We want to continue to be profitable and sell to new markets,” Powers said, something that the company has been exploring for the last seven years. “We want to maintain employment levels and continue to expand into the future” with an expanded facility that will allow this to happen.
He said that collectively, 25 jobs would be retained and created, through these tax abatements.
Council Member Jane Pacheco asked how this fits into the planned three-phased expansion of the Chelsea Milling facility and Powers explained that this was the beginning of the first phase.
“This is $7.5 million of a possible $30 million investment over the next 10-30 years,” he said, adding that the construction will bring a “significant” amount of construction jobs into the area as well.
And Council Member Jim Myles reminded the council that “We’ll eventually gain this revenue in the future.”
Now that they’ve been approved by the City Council, these Industrial Facility Tax abatements will be forwarded to the Michigan State Tax Commission for review and final approval.
The city previously granted Chelsea Milling abatements in 1995 for $4.475 million for 12 years, in 2009 for $5.734 million for 12 years and in 2011, a $3.995 million abatement for 11 years.
In total, according to the city’s assessors, the city currently has about 14 or 15 abatements in place.
City Clerk Laura Kaiser said every two years in January the companies that were granted abatements are required to report back to the city on the state of the projects and the jobs that have been added or retained because of the abatements.
