The Ferndale-based , the nation's largest producer of fresh salsa, was approved unanimously Monday night by City Council for a tax abatement that will prompt a $14 million investment in its Ferndale operation.
The investment — which includes a renovation and expansion on its current property at 1505 Bonner and a new property at 1220 E. Nine Mile Rd. — is also expected to create 75 to 100 jobs, adding to the company's status as largest employer in Ferndale with 280 jobs.
The tax abatement comes in the form of two industrial facilities tax exemption certificates (IFECs) for both properties. These IFECs abate 50 percent of GFG's local taxes for real and personal property that are associated with this new investment.
In 2006, GFG's 1505 Bonner site was approved as an Industrial Development District (IDD). About that time, GFG also requested, and was approved for, an IFEC of $4.7 million. The city said this district and certificate are still in good standing.
Growth is good as long as you have space
GFG president and founder Jack Aronson said the company he grew here in Ferndale needed to expand to stay competitive, and it couldn't do so in its current state and size. "As we've grown, so has our footprint," he told the council Monday night. "Our biggest problem is we're sort of landlocked."
Under the new investment, GFG will expand its current location at 1505 Bonner, investing $11.8 million. This includes $3.5 million of investment that has already occurred. This investment will retain the 280 existing jobs at the facility and create an estimated 50 new jobs.
Additionally, GFG will invest $1.6 million into the site at 1220 E. Nine Mile Rd., which the company intends to utilize as its corporate offices. This investment is also expected to create 50 new jobs.
The investment moves GFG closer to incorporating its Inkster facility, where it produces hummus, with its Ferndale facility.
"In a perfect world, we would house everything under one roof, but we can't," said John Latella, GFG's chief operating officer.
GFG committed to Ferndale
Aronson said Garden Fresh Gourmet has already put $25 million into the Ferndale facility, including two high-pressure packaging systems (there are only 100 in the world, he said).
"We're not asking to not pay taxes, but as we invest another $14 million in Ferndale, we've already invested $25 million," he said.
"And for those who need proof of our commitment to this town, we were offered $100 million cash by the largest food company in the country," Aronson said. "It would have moved to Virginia, and 400 people would have lost their jobs. We don't want to do that. ... This is our home."
Aronson said GFG paid $165,000 in taxes last year.
"You've made a $25 million investment that you're already paying taxes on, you'll be making a $13 million investment with a 50 percent abatement of taxes," Ferndale Mayor Dave Coulter said. "If you left, we would not only lose this opportunity, but the $25 million already invested in here. You've made a huge commitment to Ferndale."
Residents' concerns addressed
During the public hearing for these tax abatement certificates, resident Kay Watson asked whether the abatement would affect residents. "We just passed the ," she said. "Is this going to cost the residents more taxes?"
Community and Economic Development Director Derek Delacourt said it would not. "It won't cost residents any more taxes. … The general public or the citizens aren't on the hook," he said. "This is only the abatement on future investment."
Ferndale resident Sean House, a board member for , a resident watchdog group, also spoke during public comment and said he was originally going to oppose GFG abatements but changed his mind.
"I had prepared a state in opposition to the tax abate; however, I would like to change at this point in time upon hearing some new information about the tax abatement," House said. "I was not aware of some of the facts, and that's why I came here tonight — to learn some of the facts. … I just think it makes perfect sense to have Jack (Aronson) as a partner for a long time."
House made one request to Aronson, asking that any new job he creates in Ferndale go to a Ferndale resident.
"That's always our first choice, always," Aronson said.
As part of the tax IFEC, GFG is required to make the $14 million investment within two years.
Correction: This article was corrected for clarity.