NORTON SHORES — A lakeshore community is asking a manufacturer Wacker Neuson Corp. to pay back lost tax revenue after the company left town before fulfilling the obligations of its tax abatement.
Wacker Neuson, a manufacturer of construction equipment that had been located in Norton Shores since 2007, closed its facility at 1300 E. Mount Garfield Road in August 2018, two and a half years before the expiration of one of six tax abatements it received.
According to City Administrator Mark Meyers, Wacker Neuson now owes $951,346 in back taxes to Norton Shores.
“In this case, if they relocate prior to the expiration of the tax exemption, they shall pay an amount equal to the amount of taxes that would have been paid had the abatement not been in effect,” Meyers said. “That’s something the company agrees to when they accept the abatement.”
Wacker Neuson shifted production shifted to its North American headquarters in Menomonee Falls, Wis., near its Germantown logistics facility, in an effort to consolidate its manufacturing footprint.
Meyers said the company relocated to his surprise, after “glowing reports” in 2017 from the Norton Shores location.
Norton Shores’ tax abatement policy required the company to remain in the city during the time the tax break was approved. If the company relocates, substantially reduces employment or operations or closes its facility, it needs to pay an amount equal to taxes that would have been paid had the abatement not been in effect.
Thus far, Wacker Neuson has not paid the back taxes, Meyers said. The company did not respond to a request for comment by MiBiz.
According to Meyers, city staff has been in discussion with representatives from Wacker Neuson, which has hired legal counsel.
Under the tax abatement agreements, companies have a right to a public hearing with the Norton Shores City Council. At the Dec. 18 hearing, Wacker Neuson’s attorney, Adam Brody of Varnum LLP, requested the city council rescind the invoice for back taxes. On Jan. 2, city council denied that request.
The company’s reasoning for asking to rescind the invoice is that it helped another company take over its Norton Shores facility. TGW Systems Inc., a Norton Shores-based supplier of automated equipment used to transport products, moved into the facility after it outgrew its nearby space on Grand Haven Road, as MiBiz previously reported.
However, Meyers said Wacker Neuson still must live up to its obligations in the agreements it signed with the city.
“That tenant was an existing Norton Shores company. That’s not a net gain,” he added. “We were aware that the company was looking for additional space, and actually assisted in finding that.”
The next step is for Wacker Neuson to pay the invoice, Meyers said.
“If it’s not, we will do what we need to do to make sure the company follows through in its contractual obligations,” he said.
There is no deadline in the contract for when the company needs to pay, Meyers said.