Windsor city council has voted to give one of the city's auto parts makers a big tax break so it can expand its facilities downtown.
Flex N Gate wants to expand its manufacturing space and renovate other parts of its building to accommodate a new cafeteria and locker rooms for its staff.
It applied for a tax exemption under the city's Business Retention and Expansion Grant Program.
The $3.2 million expansion will add another $1.1 million to its assessed property value, which would be another $53,585 a year in city coffers.
Instead, the company will not have to pay taxes on the expansion for ten years, a tax break worth $535,850.
Ward 3 Councillor Rino Bortolin, June 4, 2018. Photo by Mark Brown/Blackburn News.
Councillor Rino Bortolin told BlackburnNews.com there is no worry about the company taking the money and then leaving the city.
"You're only granted back the taxes that come from your investment," he explained. "You have to make the investment."
The concern about companies leaving soon after receiving money has become a more significant issue since Nemak announced it was closing its plant in Windsor this year. Nemak received $4.5 million from provincial and federal governments in the years leading up to the announcement. Bortolin said it was going to get some municipal cash, but it never completed its expansion.
"We did, in principle, approve a grant for them," he said. "They did not go through with their new investment. They did not create the new jobs. They never received a penny from us."
Right now, 580 people work at Flex N Gate's facility on Ellis Street East and Howard Avenue, but with the expansion, the company plans to hire another 112 workers.
Bortolin said job creation is the key.
"This tax revenue is not needed to deal with new roads, sewers, anything like that. It's in a built-up area of town. The biggest and the most important statistic here is the job creation," he said.
Flex N Gate is a global automotive manufacturing company with 48 manufacturing and nine production development facilities worldwide. It makes large body and chassis structural assemblies, full bumper and fascia systems, brackets, receiver hitches, and interior plastic panel and pillars.
Some the city initiated the program in 2011, it has awarded 35 companies grants.