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HomeMy WebLinkAboutPublic Hearing 8-31-2020 - IFEC - Mastronardi Produce USA, Inc. CITY OF LIVONIA PUBLIC HEARING Minutes of Meeting Held on Monday, August 31, 2020 ______________________________________________________________________ A Public Hearing of the Council of the City of Livonia was held at the City Hall Auditorium on Monday, June 1, 2020. MEMBERS PRESENT: Kathleen McIntyre, President Rob Donovic Jim Jolly Brandon McCullough Laura M. Toy Cathy K. White MEMBERS ABSENT: Vice President Scott Bahr OTHERS PRESENT: Mark Taormina, Director of Economic Development Todd Zilincik, City Engineer Paul Bernier, City Attorney Sara Kasprowicz, Recording Secretary * Due to technical difficulties with the Zoom recording capabilities, the following minutes are a summary of the Public Hearing of 08/31/2020. The Public Hearing was called to order at 7:04 p.m. with President Kathleen McIntyre presiding. Chad A. Mead, Chief Administrative Officer, Mastronardi Produce USA, Inc., is requesting approval of an Industrial Facilities Exemption Certificate for an expansion of at least 85,000 square feet of their refrigerated warehouse space located at 28700 Plymouth Road, Livonia, MI 48150. (Industrial Development Overlay District #107). This item will move to the Regular Meeting of September 21, 2020. The Public Hearing is now open. There were eight people in the audience. McIntyre: Council President McIntyre asked Mr. Taormina to begin his presentation. Taormina: Mark Taormina responded that this Public Hearing item involves a request by Mastronardi Produce – USA, Inc. for an Industrial Facilities Exemption Certificate (IFEC) under P.A.198 of 1974, as amended. Located on the north side of Plymouth Road between Inkster Road and Hartel Avenue, Mastronardi operates its U.S. Headquarters in a ~380,000 sq.ft. building that mostly includes a cold storage warehouse and distribution facility and various support offices. Bordering the 35-acre parcel to the south is the 2 Plymouth Road Technical Center (PRTC) and to the north lies the CSX Railroad. Access is available both from Plymouth Road through PRTC and from Inkster Road via Grantland Ave. The facility was originally constructed in the early 2000’s for A&P, which maintained a regional cold-storage logistics center at this location for approximately 12 years. The $43 million A&P project received tax credits valued at over $1M through Wayne County’s Brownfield Authority and the Michigan Economic Growth Authority (MEGA). For the required local match, the Plymouth Road Development Authority (PRDA) paid $120,000 towards a total cost of approximately $280,000 for a traffic signal at Plymouth Road and Harrison Avenue. The signal was needed to facilitate truck traffic to and from the site, since the City had rejected a request by A&P for Grantland to become a designated truck route. In 2013, following the departure of A&P, the property was transferred to a new joint ownership between Ashley and Mastronardi. Mastronardi Produce – USA, Inc. will continue to lease the property; however, the Company will no longer have an ownership interest in the real estate. As part of a new arrangement, Ashley Capital (or a holding company it creates) will acquire Mastronardi’s interest in the property and be the new owner and lessor. Each year at the Livonia plant, Mastronardi warehouses, packages, and distributes throughout the Midwest approximately 465 million pounds of produce, including tomatoes, peppers, cucumbers, and berries. Mastronardi is the largest provider of greenhouse-grown produce in North America. In Michigan, the Company maintains large greenhouse operations in Coldwater. Under its Sunset brand, Mastronardi provides produce to most major retailers as well as food service and club stores. Mastronardi is seeking approval of an IFEC on a planned capital investment of approximately $8.6 million dollars which includes both real and personal property improvements. The projected real property costs total $5.6 million dollars and the personal property costs total $3 million dollars. The project involves the expansion of both the warehouse and the offices (see attached site plan). Mastronardi currently employs 800 people in Livonia. With the planned investment, all 800 jobs will be retained and at st least 20 new jobs would be created. If approved, the new 1-year Real Property taxes on the full investment would be approximately $90,818, saving the Company an estimated $74,020, versus approximately st $164,838. Similarly, the new 1-year Personal Property taxes would be cut in half to about $35,000. With the abatement, the City portion, including both Real and Personal taxes, will total roughly $28,700, also about half of what the Company would otherwise pay without an abatement under the current Ad Valorem rate. In 2019, Mastronardi paid approximately $296,275 in property taxes, of which $65,460 was the City’s portion. Approval of the IFEC will not reduce any existing taxes. Mastronardi is requesting a 12-year incentive consistent with the City’s tax incentive duration guidelines. Representing the Company are Chad Mead, Chief Administrative Officer for Mastronardi, and Stewart Mandell of Honigman, legal counsel on behalf of the petitioner. 3 McIntyre: Council President McIntyre asked if Council had any questions for Mr. Taormina. Since there were none, she then acknowledged the applicant, Chad Mead of Mastronardi, and asked him to provide additional comments. Mead: Mr. Mead provided a brief explanation of the Mastronardi and the Company’s operations in Livonia, as well as the need for the IFEC. He indicated that Mastronardi distributes over 1 billion pounds of produce annually throughout the U.S. and that the Livonia facility is key to its operations. However, they have run out of room and need to expand. The tax abatement is necessary given the competitive nature of the business and very low margins. McIntyre: Council President McIntyre thanked Mr. Mead for his answer and asked Council if they had anything further to ask. Councilmember Rob Donovic was asked to present his question. Donovic: Councilmember Donovic asked the Petitioner about the transfer of ownership between Mastronardi Produce and Ashley Capital. Harvey: Susan Harvey from Ashley Capital responded to the question by stating that they have transferred the ownership of the property from Mastronardi Produce. They will still be leasing the property, but Ashley Capital will be taking over the interest. McIntyre: Council President McIntyre asked if anyone had additional questions for the Petitioner. McCullough: Councilmember McCullough asked about the timing of the project and when construction would begin. Mead: Mr. Mead indicated construction would commence as soon as possible, following approval of the IFEC and building and engineering permits. White: Councilmember White offered an approving resolution. McIntyre: Council President McIntyre noted that Councilmember White offered an approving resolution and indicated that this item will be on the agenda for st the Regular Meeting of September 21. As there were no further questions or comments, the Public Hearing was declared closed at 7:21 p.m.