Update: Magna Donnelly says it is returning to Grand Haven

Wed, Jun 25, 2008    to del.icio.us

Magna Donnelly will soon be making auto parts in Grand Haven after a six-month absence.

The Canadian-owned company shut down its 151,000-square-foot plant at 1800 Hayes St. at the end of last year. The company said it was shifting the production work from the Grand Haven plant to its other facilities in West Michigan.

Tracy Fuerst, a spokeswoman for the corporation based in Ontario, said today that about 40 employees at a leased facility near the Muskegon County Airport in Norton Shores will be transferred to the vacant Grand Haven plant in the next couple of weeks.

The move will mean the Norton Shores operation will be shut down, a Norton Shores city official said.

Magna Donnelly leases the building at 620 E. Ellis Road in Norton Shores, and the company's real estate holding division owns the Grand Haven property. Dick Maher, community development director for Norton Shores, said that is likely what is driving the move.

Maher said the Norton Shores plant opened in 2000.

Maher and the Norton Shores City Council discussed the pending move at a work session Tuesday night. He said the council will likely enforce a penalty stipulated in the tax abatement agreement with Magna Donnelly for property taxes the company saved the past four years with a 12-year industrial facilities tax exemption certificate. The IFT term has eight years remaining, Maher said.

When Magna Donnelly closed its Grand Haven plant last year, Grand Haven officials asked for the company to refund tax credits from IFTs the company had in place for the Hayes Street operation. Grand Haven City Council had just approved an IFT for the plant two months before the company announced in August that it would be closing.

City Finance Director James Bonamy said this morning that Magna Donnelly did fulfill the contractual arrangement that requires a company to refund tax breaks should it not live up to the requirements in the IFT agreement.

David Miller, the vice president of economic development for the Chamber of Commerce Grand Haven, said Magna Donnelly officials recently asked him if tax abatements could be reinstated for the Hayes Street plant. Miller told them that was "bad policy" and would not likely be approved by city officials.

The Holland-based Donnelly Corp. was acquired by Magna International of Canada in 2002. Its Grand Haven plant employed around 300 workers before it began phasing out production there about a year ago.