Bessemer Plywood looking to upgrade


July 2, 2019


Bessemer — The Bessemer City Council on Monday approved a plywood manufacturer’s request to form an industrial development district as a possible tax incentive for an addition and upgrade at 1000 Yale Ave., Bessemer.

The council approved 4-0 to adopt Resolution No. 2017-30 following a public hearing. Mayor Adam Zak was not present.

The estimated $3 million dollar project includes a $1.5 million building and $1.5 million for machinery that improves the veneer drying process, said David McDonald, an attorney with Jacobs, McDonald & Silc law offices in Ironwood, who is corporate council for the family owned company. He was present with Bill Thomason, vice president of Bessemer Plywood.

“The first step is to establish the industrial development district,” McDonald said.

The next step will be to return within six months to ask the council to approve the state exemption as an incentive to encourage renovation and expansion of the facility, he said. The 50% tax abatement for up to 12 years, would only be for the value added to the property by installing the veneer drying system, he said.

“It doesn’t change the taxes on any of the other portions of the property,” McDonald said.

The personal property portion of the project is done completely separate under Michigan law, McDonald said. The personal property is the veneer drying system which comes under the state Essential Services Act that has a separate means of calculating what the ultimate tax will be, he said.

The state revised the formula for personal property that is industrial about four years ago. The local assessor will need to determine the net tax, which can be as low as zero, or quite substantial, Thomason said the timetable to determine the project duration is not settled but it should take less than a year to complete once started. The upgrade will provide the capacity for more jobs, he said.

“The dryer is modernizing what we have and is more efficient in terms of energy and through-put production for labor and power,” he said.

Charly Loper, city manager, said that residents near the plywood plant were notified by letter of the resolution hearing and it was posted in area newspapers. She said the council can approve the resolution without having to authorize a tax break at this point.

Council member Terry Kryshak, who officiated the meeting in Zak’s absence, said Bessemer Plywood is a major employer in the area.

“My perspective is that we need to help them with their development and to modernize,” Kryshak said. “That doesn’t mean I am voting for tax benefit but it does mean that I am supporting the industrial development district.”

In his report, George Beninghaus, the city code enforcement officer, said he has received 52 blight complaints since he started enforcing blight on May 28. There have been 67 violations, he said.

“We are taking blight very seriously,” Beninghaus said. “It’s one of our priorities.

In other business, the council approved:

—Appointing Adam Zak as the Bessemer representative on the Gogebic Range Solid Waste Management Authority.

—Issuing a mayoral proclamation in recognition of the Bessemer Women’s Club centennial.

—Approved the second-term re-appointment of Janice Wanden to the Bessemer Housing Commission through 2024.

—A second year of a three-year property insurance contract quote for $21,261 with Hannula Agency Inc., of Lake Linden, Michigan.

—Contracting with Rukkila Negro and Associates, a certified public accountant agency in Houghton, to conduct the city audit

—Approving a request from Marcus Majewski to allow the Bessemer Fire Department to burn down a structure at 900 S. Mine.

ˇ—The hire of Brad Morrison as a temporary city laborer.

—A $15,000 single-year contract to provide library services to the charter township of Ironwood.

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