By KEVIN WALKER
Michigan Correspondent
 
FREMONT, Mich. — Gerber Products, along with its parent company Nestle Nutrition, has announced a major expansion of Gerber’s operations at its Fremont campus.

The company will invest $75 million at this facility in exchange for its designation as an Agricultural Processing Renaissance Zone. This designation will grant the company a number of tax breaks that will last for a period of 15 years.

Fremont Mayor James Rynberg was elated over the announcement, which took place just a week before Christmas.

“It’s really good news for us and the state of Michigan, especially in this economy,” he said. “It’s a huge project. It’s like the cement for Gerber in this community on a long-term basis.”

Rynberg said there is a “clawback” provision in the contract providing the tax abatements which states that Gerber cannot move out of town in the 15-year timeframe the abatements are in effect. If it does it will have to pay the money back. Rynberg said this provision was absolutely necessary to protect the community.

“So much of what we have in Fremont is dependent on them,” he said. “They contract with local farmers for food products. It’s a huge chain. One affects the next, and so forth.”

He said local farmers supply peas, green beans, squash, carrots and other products to the company. According to figures provided by the Michigan Economic Development Corp. (MEDC), Gerber works with more than 200 Michigan producers and buys more than 61,000 tons of produce each year valued at $12 million. It also buys $36 million in packing and raw materials each year from 11 Michigan-based companies.

Gerber is also the largest employer in Newaygo County, with 1,100 workers. This expansion will allow the company to retain these positions as well as add an additional 200 over the next several years. According to Rynberg, the company will construct a new $8 million building for its life insurance operation in town, as well as improve its processing and food lines.

“Obviously, this type of homegrown investment is good for our economy. It underscores how things can work when government and the private sector work together,” said Jennifer Holton, a spokeswoman for the Michigan Dept. of Agriculture (MDA), which plays a critical role in approving the special ag zones.

The special zone designation starts with an application which must wend its way through different levels of government, including municipal, county and state. Specifically, it begins with a company or community official meeting with an officer from the MEDC and the MDA to discuss the plan. The city or township in which the special zone is being proposed must approve the tax abatements, which include property taxes, the Michigan business tax and income taxes.

The applicant must also demonstrate how it will have a positive economic impact on the local government in question, on the state as a whole and the agricultural community.

There have been about 20 such ag zone designations to date.
“When you can get all of the parties moving in the same direction, you can make anything happen,” said MEDC spokesperson Bridget Beckman.

There are other special renaissance zones, including forestry, renewable energy, geographic and tool and die recovery zones. “These zones are meant to encourage the development of diverse industries in Michigan’s economy. They’re very targeted to high-growth industries,” Beckman said.

Rynberg believes that this expansion will benefit not only the city of Fremont and Newaygo County, but the entire western side of the state.

December 31, 2008