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Brewing company gets 12-year tax break

Tuesday, October 30, 2007

By Scott E. Pacheco

spacheco@bc-times.com | 894-9646

Kevin Peil received a call from his mother after the Bay City Commission failed to reach a decision on Oct. 15 on an industrial facilities tax exemption for the Tri-City Brewing Co.

On Monday, a call wasn't necessary.

The commission voted 5-1 during a special meeting to approve a 12-year tax exemption on $50,000 for the purchase and installation of new bottling equipment. Peil said bottled beer should hit store shelves in November

''(The abatement) is very important,'' said Peil, president of Tri-City Brewing. ''It helps with our cash flow. Hopefully, we are contributing more to the area than just property taxes.''

But it almost didn't happen in time for the state's Oct. 31 deadline, which Peil needed to meet so he could see the benefit in the upcoming year.

The tax break was neither denied nor approved after the commission voted 4-3 on Oct. 12 with four voting to approve the exemption - a five-vote majority is needed to take action on an item.

At that meeting, Commissioners Christopher J. Shannon, 1st Ward; Michael E. Wooley, 2nd Ward; Wendy A. Legner, 3rd Ward, and Kathleen Newsham, 8th Ward, all voted ''yes'' on the exemption. Commissioners James F. Flannery, 4th Ward; MaryJane Gorney, 5th Ward, and John F. Davidson, 6th Ward voted ''no,'' while Commissioners Charles M. Brunner, 9th Ward, and Marie T. Kurzer, 7th Ward, were absent.

The reason some commissioners gave for their ''no'' vote: The July property taxes on the real estate at 3020 N. Water St. hadn't been paid.

However, Tri-City Brewing leases its part of the building and only pays property taxes on its assets, which it had done. The real estate taxes are paid by the owner of the building.

Peil said the owner had paid his taxes as part of his mortgage payments, but that the escrow company didn't make the payments to City Hall. Peil said he wishes the commission would have said something to him before the meeting so he could have taken care of the matter ahead of time.

''I got no advance warning at all,'' he said. ''It's just I had no understanding at all that this was the issue. Within 36 hours we had it corrected.''

If the commission had not met Monday, then the item would have automatically been shifted to next Monday's meeting as unfinished business - five days after the deadline.

Shannon, who voted for the exemption twice, said he has supported the business since its inception.

''The business is in my ward and I've done all I could to help them through the sometimes difficult processes that the city imposes on business,'' he said.

The building's property taxes are now up-to-date, according to City Manager Robert V. Belleman.

Meanwhile, Tri-City Brewing is moving ahead with plans to activate its recently-purchased bottling line.

Peil said the bottling line is expected to arrive Wednesday, with bottles of the company's Phoenix Golden Ale and Phelan Irish Red hitting store shelves sometime next month.

In addition to Fabiano Bros. locally, Tri-City Brewing has four other distributors in Northern Michigan, and the Ann Arbor, Detroit and Port Huron areas, Peil said.

''(The bottling line) is critical to us getting our product out in ... homes,'' he said. ''Customers will basically be able to take it home and that's important to us.''