ESCANABA - A local wood products company plans to expand its sawmill operations in Escanaba and is filing for a tax-saving program as an incentive to invest in its business and create more jobs.
Besse Forest Products Group of Gladstone is seeking to improve its sawmill operations on its property at 1720 N. Lincoln Road and is hoping to be approved for an Industrial Facility Tax (ITF) Certificate through the state.
Approval for the tax cut program is a two-step process. During a special meeting Monday, Escanaba City Council approved the first part by agreeing to create an Industrial Development District on the 16.34-acre parcel known as the Escanaba Lumber Co.
Escanaba City Assessor Daina Norden explained the creation of the district is needed for Besse to apply for the ITF, the second step in the tax abatement process.
An ITF would give the company a 50 percent reduction of its taxes on new construction and equipment, she said. The tax abatement period is for up to 12 years.
A special council meeting was held Monday because the company wants to begin construction this fall and the deadline for the 2013 State Tax Commission program is Oct. 31, said Norden. Council will consider approval of the ITF at its Oct. 18 meeting.
City Manager Jim O'Toole said the company has a small sawmill on the property. Besse wants to expand operations there because its sawmill in Newberry was victim to a fire. About 20-25 workers will be employed at the expanded sawmill in Escanaba, he added.
According to a letter to the city from Besse Chief Financial Officer Dan LaMarche, "Besse Forest Products Group has annual sales of $100 million and none of the sales are from Escanaba. We would like to change that by reopening the Escanaba sawmill."
LaMarche added, "We are considering building new structures and buying new equipment to increase the capacity the current mill configuration provides... The benefits to the city would be the creation of the 20 to 25 jobs, the continual purchasing of supplies and equipment from local vendors, and another piece of land within the city limits that is being productive again."
Besse Forest Products Group, headquartered in Gladstone, is a manufacturer of hardwood veneers, plywood and lumber for customers worldwide. The company has 14 facilities in the Upper Peninsula and Wisconsin.