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Company moving, won't be using tax abatement

February 29, 2012 - Oxford Village received some bad news Monday as officials learned that a manufacturer it granted a property tax abatement to last year is planning to leave the community.

"(Royal Oak Medical Devices) is growing beyond our projection and it appears that they will be relocating to a larger facility. We do not know yet where the facility will be or when the move will occur," wrote Tony Kehrig, an accounting analyst for Royal Oak Industries, Inc., in a Feb. 27 e-mail to village Manager Joe Young.

"We're sorry to see them leave us," Young said. "We were looking for the (additional tax) revenues and the jobs."

Royal Oak Medical Devices is currently located at 650 S. Glaspie St.

In April 2011, the village council voted 3-2 to grant a 12-year abatement on personal property taxes to Royal Oak Medical Devices.

The abatement was based on the manufacturer's proposal to invest $2.95 million in new equipment, hire 10 new employees and retain one existing employee.

The abatement would have allowed Royal Oak Medical Devices to pay a projected $158,008 – as opposed to the full $316,016 –in personal property taxes over a 12-year period on its $2.95 million investment.

In light of the company's decision to relocate, Kehrig informed Young the company reported all of the property previously approved for an abatement as 100 percent taxable as opposed to 50 percent.

"They'll pay the full tax," Young said.

When asked if there's a chance Royal Oak Medical Devices could perhaps find a bigger facility elsewhere in the village's industrial district, Young replied, "I can call and talk to them, but unfortunately, we don't have much space available as you know."

According to Young, the other issue the village is "fighting against" is the depressed market values of commercial properties.

"I'm sure they can get a good deal on some building somewhere," he said.

The village was initially informed about company's decision to move not by Royal Oak Medical Devices, but by Oxford Township Treasurer Joe Ferrari.

Ferrari was told by someone from Oakland County Equalization that Royal Oak Medical Devices would not be utilizing its abatement because it would not be expanding at the Oxford facility as previously planned.

The treasurer alerted Young to the situation, who in turn verified it with Royal Oak Medical Devices.

Young noted that Royal Oak Medical Devices' sister company, Royal Oak Boring, is staying at its 650 S. Glaspie St. and 700 S. Glaspie St. locations and will be utilizing the property tax abatement it was granted by the village last year.

Council voted 4-1 in April 2011 to grant Royal Oak Boring a six-year abatement on personal property taxes based on the manufacturer's plans to invest $1.36 million in new equipment and hire up to seven new employees.

This abatement will allow Royal Oak Boring to pay a projected $64,133 – as opposed to the full $128,266 – in personal property taxes over six years on its $1.36 million investment.

Young noted the village will follow-through to make sure Royal Oak Boring meets all the requirements necessary to maintain its tax abatements under the municipality's policy.

CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.
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