Economy stresses local business
LISA HOBBS – News Editor
A Morrison-based company is requesting help from Warren County Government to stay financially solvent.
DN Plastics has been under a tax incentive program called PILOT (Payment in Lieu of Tax) since it was established on the outskirts of Mt. View Industrial Park in Morrison 12 years ago. The program places a freeze on property taxes at the pre-development rate for an agreed upon amount of time. In this case, it was 15 years with an optional five-year extension.
Warren County Industrial Development Board Director Wendy Sneed informed the county’s Economic and Agriculture Committee on Tuesday that the company has requested that extension and expressed a desire to re-amortize what remains on what they owe.
DN Plastics owner Sunita Agrawal says they have honored their commitment, an agreement negotiated with former director George Burke.
“What I’m requesting is basically helping us out. Our principle was originally $3,738,500. Current monthly payments are $23,629.61. We have made 142 consecutive payments. Never had anything late. The current balance is $872,880. What we are requesting: We have honored our commitment. We have brought the original balance of $3,738,500 down to $872,000.”
Extending the amount remaining over seven years will lower the business’ monthly payment to $9,500.65.
“We are not asking for any change in how the PILOT is written or any forgiveness,” Agrawal stated. “All we are asking is to amortize the remaining balance over seven years, which would reduce our monthly payment from $23,629.61 to $9,500.65. You guys are probably seeing the effects on the oil pumps, but since March, things have really gone crazy for us.”
She stated that the prices and shortages are taking their toll on the business financially and extending the payment period by five additional years will add $40,000 in interest, which they are willing to pay.
Commissioner Ron Lee stated, “Have you met your obligation in hiring the people that you promised us in the beginning?”
“George isn’t here,” replied Agrawal. “We are never really a high-labor intensive company. We are very high equipment company. We did tell him that we could not get to the big number he has. I was there. I spoke to him personally when he came to Michigan. He said not to pay attention to that number. Unfortunately, it sounds bad but that’s how it was.”
Commissioner Carl D. Bouldin stated, “That was your first red flag. I’m familiar with the PILOTs that he wrote, and I believe every word that you’re saying.”
According to media reports at that time, Burke touted an initial 30 employees and would build up 100 employees. Currently, the business has around 17 employees.
“I wish I had a recording of it to pay it for you,” Agrawal stated.
Lee stated, “The information that was given to the county court at the time… the county court made its decision because we saw the job numbers. Do you understand what I’m saying? So, I feel like that hasn’t been fulfilled.”
Bouldin rejected the idea of a five-year extension without concessions from the business regarding property taxes.
“I, personally, will not entertain a motion for an extension that didn’t produce property taxes for Warren County. We are familiar with this contract because it was part of a strong discussion, this one and another one, and it’s a deal that I wished I had been approached with years ago or something similar to this.”
Sneed says negotiations with the company will begin and they will return with a contract that might be more acceptable.