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CITY OF
MUSKEGON
Agenda Item Review Form
Muskegon City Commission
Commission Meeting Date: December 9, 2025 Title: PA 198 Industrial Facilities Exemption — 2034
Latimer Drive
Submitted by: Jocelyn Hines, Development Department Economic Development
Analyst
Brief Summary:
Pursuant to Public Act 198 of 1974, as amended, Johnson Technology, INC has requested the
issuance of an Industrial Facilities Exemption Certificate for their property located at 2034 Latimer
Drive.
Detailed Summary & Background:
Johnson Technology, Inc., a subsidiary of GE Aerospace, has submitted an application for an
Industrial Facilities Exemption (IFT) certificate for real property improvements at 2034 Latimer Drive.
The company is proposing a 20,000 sq. ft. addition with a total investment of $9,078,845. This addition
will expand shipping and receiving facilities and add manufacturing floor space to support
increasing production demands,
If approved, the IFT certificate would reduce property taxes on the real property improvements by
50% for the duration of the exemption.
Johnson Technology, Inc. is an aircraft engine parts manufacturer headquartered in the City of
Muskegon, with additional facilities in Norton Shores. GE Aerospace employs over 330 people at its
Muskegon location and plans to hire an additional 90 employees as part of this expansion. GE
Aerospace (formerly GE Aviation) has been part of the Muskegon area since 1997, when it acquired
Johnson Technology. The company is also investing $70 million in a separate expansion in Norton
Shores and has announced a broader $1 billion nationwide commitment.
Due to Johnson Technology's status as a federal contractor and pursuant to Executive Order 14173,
the company is not subject to local affirmative action pian requirements. However, Johnson
Technology remains committed to non-discrimination and ensuring equal opportunity for alll
employees and applicants, and has provided the City with a copy of its Respectful Workplace Policy
reflecting that commitment.
Following its review, the City's Internal Tax Committee recommends approval of a 12-year
abatement term for the proposed investment.
Goal/Action Item:
2027 Goal 2: Economic Development Housing and Business - Progress foward new and ongoing
economic development projects
Is this a repeat item?:
Explain what change has been made fo justify bringing it back to Commission:
Amount Requested: Budgeted Item:
N/A Yes No N/A Ce
Fund(s) or Account(s): Budget Amendment Needed:
N/A Yes No N/A ||
Recommended Motion:
| move to approve the issuance of an Industrial Facilities Exemption certificate for a period of 12 years
for the property located at 2034 Latimer Dr. and to authorize the Mayor and City Clerk fo sign the
application and the resolution.
Approvals: Name the Policy/Ordinance Followed:
Immediate Division PA 198 of 1974, as amended
Head
Information
Technology
Other Division Heads
Communication
Legal Review
CITY OF MUSKEGON
CONTRACT FOR TAX ABATEMENT
Act 198 Public Acts of 1974
AGREEMENT between CITY OF MUSKEGON, a municipal corporation
of 933 Terrace Street, Muskegon, Michigan 49440, (“City”) and Johnson
Technologies, LLC.
Recitals:
A. |The Company has applied to City for the establishment of an industrial
development district pursuant to the provisions of Act198 of the Public Acts of
1974, as amended, which act requires a contract between the City and the Company
to be agreed and submitted with the Company’s subsequent anticipated application
for an industrial facilities exemption certificate.
B. That in addition to the statutory requirement, the City has determined that it is
in the best interests of the taxpayers, property owners and residents of the City that
this Agreement be approved and executed prior to the establishment of the
requested district, and the City deems this Contract, together with the conditions set
forth in the said Act to constitute a necessary element in the City’s determination
whether or not to create the district.
C. |The Company intends to install the project set forth in its application
(“project”) which it believes qualifies for the process of establishing the district and
the application for industrial facilities exemption certificate.
D. The City, provided this Agreement is executed, will determine whether to
create the district based upon the potential for the production of permanent jobs, the
continuation, stabilization or increase of economic activity, planning and zoning
considerations and the City’s general plan and intentions regarding economic
development. In addition to the City policy considerations and predictions that the
Company’s proposed district and certificate benefit the community in those ways,
the City has further determined that the contractual commitments made by the
Company to thereby assist the community shall be binding on the Company and
necessary to continue the tax exemption made possible by the certificate.
E. This contract shall become effective upon the issuance of an Industrial
Facilities Tax Exemption Certificate.
NOW THEREFORE THE PARTIES AGREE:
1. COMPANY AGREEMENT. The Company irrevocably commits to the
investment, job retention and job creation promises made in its application, a copy of
which is attached hereto and incorporated herein. In particular the Company agrees:
1.1 That 100% of the jobs shall be filled and in existence with full-time
employees by a date no later than two (2) years from the date of the granting of
the certificate by the State Tax Commission, subject to the provisions of section
3.4 of this agreement.
1.2 That the amount of jobs listed on the application, whether new or retained,
will be maintained through the life of the abatement, subject to the provisions of
section 3.4 of this agreement.
1.3 The Company shall meet the affirmative action goal included in the
application or in any documents supplied by the City and utilized by the
Company, including any additional representations made to the City Commission
on or before the date two (2) years after the granting of the certificate by the
State Tax Commission. It shall maintain the said levels of employment diversity
during the period of the certificate, subject to the provisions of section 3.4 of this
agreement.
1.4 The Company, by the end of two (2) years from the date of the grant of the
certificate by the State Tax Commission shall have completed the investment of
$9,078,845 in improvements as shown in the application, subject to the
provisions of section 3.4 of this agreement.
1.5 That the improvements and equipment to receive the tax abatement treatment
shall be completed on or before the date two (2) years from the date of granting
of the certificate by the State Tax Commission.
1.6 The Company shall pay its specific taxes required by the act in a timely
manner, and shall not delay payments so as to incur any penalties or interest.
1.7 The Company shall fully cooperate with the City representatives in supplying
all requested and required documentation regarding jobs, investment, the meeting
of all goals and the timely installation and utilization of equipment and
improvements. The City shall be entitled to inspect at reasonable hours the
Company’s premises where the said improvements and equipment have been
installed and where the said jobs are performed.
1.8 The Company shall maintain, during the entire period for which the tax
abatement is granted, the level of jobs, affirmative action goals, production and
utilization of the improvements and equipment at the site where the district has
been created and for which the tax exemption has been granted.
1.9 The Company shall not cause or fail to cure the release of any hazardous
substance, or the violation of any environmental law on its premises in the City.
It shall report any releases to the appropriate governmental authority in a timely
and complete manner, and provide copies of said report documentation to the
City. It shall comply with all orders and actions of any governmental agency
having authority.
1.10 The Company shall maintain the equipment and improvements so as
to minimize physical or functional obsolescence.
1.11 The Company shall continue to operate its business location in the
City, containing the same number of and type of jobs, for the term of the
certificate.
2. AGREEMENT BY THE CITY. Provided this contract has been executed
and further provided all applications to create the district and achieve the industrial
facility exemption certificate have been properly filed, the City shall, in a timely
manner, determine in a public meeting to whether to create the district and whether
to receive, process, and approve thereafter the Company’s application for an
industrial facilities exemption certificate. The City may consider this contract in a
meeting separate from and prior to the meeting in which the City considers the
creation of the district and/or approval of the application for certificate. Further, the
City shall require the submission of this contract signed by the Company together
with its applications, before creating the district.
3. EVENTS OF DEFAULT. The following actions or failures to comply shall
be considered events of default by the Company:
3.1 Failure to meet any of the commitments set forth above.
3.2 The closing of the Company’s facilities in the City. Closing shall mean for
purpose of this Agreement, the removal, without transfer to another site within
the City of substantially all of the production facilities, and the elimination of
substantially all the jobs created or retained thereby, which are set forth in the
Company’s application.
3.3 Failure to afford to the City the documentation and reporting required.
3.4 The failure to create or retain jobs, meet affirmative action goals or expend
the funds on equipment and improvements as represented in the application
within the times required hereby, unless the company can show that there has
been a loss of revenue and employment due to circumstances beyond the control
of the company. In order to make that showing the company shall have the
burden of supplying, to the City's satisfaction, complete and convincing
documentation supporting and justifying reductions in investment, failures to
attain affirmative action goals or job losses, such as, without limitation, written
evidence of lost contracts, accounting information showing reduced revenues due
to the loss of business, (not due to diversion of production to affiliate companies
or divisions of the company), production records showing reduced quantities
over significant periods of time, and such other information required by the City
to support the Company's claim that the failure to invest, failure to achieve
affirmative action goals, or loss of jobs should not form the basis for a finding of
default.
3.5 The bankruptcy or insolvency of the Company.
3.6 The failure to pay any and all taxes and assessments levied on the Company’s
property or any other taxes, local, state or federal, including but not limited to
City income taxes and the withholding of said City income taxes from employees
as required by the City Income Tax Ordinance.
3.7 The performance or omission of any act which would lead to revocation
under MCLA 207.565, being §15 of the Act.
3.8 The violation of any provisions, promises, commitments, considerations or
covenants of this Agreement.
4. REMEDIES ON DEFAULT. In the event of any of the above defaults the
City shall have the following remedies which it may invoke without notice, except as
may be reasonably required by the Company’s rights to due process:
4.1 In the event of closing as determined after investigation of the facts and a
public hearing, the Company shall be immediately liable for penalties to be paid
forthwith to the city as determined as follows:
4.1.1 The Company shall pay to the City for prorata distribution to the
taxing units experiencing the abatement, an amount equal to the difference
between the industrial facilities tax which it has paid, and the total property
taxes to the relevant taxing units which it would have paid, given its
installations of improvements and equipment, during the years for which the
certificate was in effect.
4.1.2 Immediate Revocation. The Company hereby consents to revocation
to the IFT certificate before the State Tax Commission, without hearing, and
the City shall submit a copy of this Agreement to the State Tax Commission
in connection with its revocation procedure, giving notice that the default has
occurred and immediate revocation should occur.
4.2 In the event the improvements and equipment have not been installed before
the two (2) year period, in addition to the revocation procedures before the State
Tax Commission, the abatement should immediately be reduced by the City
proportionately, and any installations which have not been finished at the end of
said two (2) year period shall not be eligible for the abatement thereafter and
shall be placed on the regular tax roll.
4.3 Failure to Expend the Funds Represented. In the event, (whether or not the
installations have been completed), the Company has not expended the funds it
has represented on its application that it would invest for the installation of
equipment, the abatement shall be reduced prorata, and any remaining value of
equipment shall be placed on the regular tax roll, unless the company can show,
through receipts, etc. that the cost of the equipment was actually less than the
amount estimated by the company (i.e., the same equipment was purchased as
listed in the IFT application, but the bids came in less then expected).
4.4 Job Creation and Retention. In the event the promised number of jobs have
not been created or retained at the end of the two (2) years after the grant of the
cettificate by the State Tax Commission, the abatement shall be proportionately
reduced, unless the company can show that the loss of jobs, or inability to hire as
many people as expected, is due to circumstances beyond the control of the
company (such as an economic downturn).
4.5 Affirmative Action Goals. In the event, after one (1) year from the grant of
the certificate by the State Tax Commission, the affirmative action goals of the
City for additional jobs have not been met on a prorata basis, the abatement shall
be revoked.
4.6 For other violations of this Agreement or for actions or omissions by the
Company amounting to grounds for revocation by statue, the City shall
recommend to the State Tax Commission immediate revocation of the certificate.
4.7 Special Assessment. For any amount due to be paid to the City, under this
Section 4, the Company consents that the City shall have a personal action
against the Company for the said amount, and in addition, cumulatively, and not
by election, the City shall have a special assessment lien on all the property of
the Company personal and real, located in the City, for the collection of the
amounts due as and in the manner of property taxes and in such case the
collection of the said special assessment shall be accomplished by addition by
the City to the Company’s property tax statement regularly rendered.
5. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Michigan applicable to contracts made and
to be performed within the State of Michigan.
6. Counterparts. This Agreement may be executed in one or more counterparts.
Notwithstanding such execution all such counterparts shall constitute one and the
same Agreement.
7. Benefit. This Agreement shall be binding upon and inure to the benefit of
the respective parties, their successors and personal representatives.
8, Effective Date. This Agreement shall be effective on the date the State of
Michigan Tax Commission grants the company at Industrial Facilities Exemption
Certificate.
CITY OF MUSKEGON
ByKenNor— lebron»
Johnsod, Mayor
saat Rho Site a Ss
Ann Meisch, Clerk
CU Presfdght
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