Drug lab seeks tax break to create 60 new jobs

‘Ash Stevens does not have one minimum-wage job in this facility.’
— Stephen Munk, Ash Stevens Inc. chief executive officer and president

Sunday Times Newspapers

RIVERVIEW – A local chemical research and development company is promising the creation of 60 new jobs if city officials will grant two tax exemptions.

Stephen Munk, chief executive officer and president of Ash Stevens Inc., 18655 Krause, asked City Council members Monday for 12-year exemptions on industrial facilities and personal property tax in order to receive a state tax credit. The exemptions would be for new construction and new equipment purchase.

The Michigan Economic Growth Authority awarded a tax credit March 16 for $710,000 to help offset the costs of the company’s $20 million five-year expansion project. The credit is conditional, however, upon the city granting the exemptions.

The MEGA credit is part of what state officials say is an aggressive pursuit of elite industries of the future involved in life sciences research, as well as those who develop research into useable technologies.

Founded in 1962, Ash Stevens is a privately held manufacturing organization that takes a drug formula and finds the best way to manufacture it.

Its customers are in the private sector and government. Its work supports drug clinical trials during development and when manufacturing is being approved.

Munk said the expansion would begin this year. The project encompasses a warehouse, a tank farm a laboratory and a manufacturing bay. Ash Stevens’ personal property tax exemption, if granted, would be for new real and personal property.

Finance Director Douglas Drysdale said that in 2009 the company paid $183,000 in property taxes to the county, schools, state and city, with the latter receiving $76,000. The city would collect $340,000 in taxes in that category for the exemption period.

Seven years of the personal property tax exemption request would go to offset new equipment purchase. No taxes would be collected during that time, then $115,000 would be paid to the city in the remaining five years, Drysdale said.

Drysdale estimated that the city would collect about $450,000 in taxes from Ash Stevens in the next 12 years.

In addition to the anticipated 60 new jobs, company officials say 10 more will be created when its office and lab moves from its current location in Detroit.

Ash Stevens’ employment has grown from roughly 30 to 60 employees since it first came to Riverview 10 years ago, Munk said, adding that none of the current or proposed new positions are minimum-wage jobs.

“We’re very proud of the fact that Ash Stevens does not have one minimum-wage job in this facility,” he said. “Everyone has access to good health insurance – always has – a good retirement plan, so, yeah, they’re good-paying jobs.”

When asked when the jobs would be created, Munk said the company has “been hiring every year and would continue to hire every year.”

“We anticipate hiring a few people every year as we’ve done for the last decade,” he said, “some years more, some years less.”

Councilman James Trombley asked about safety factors and how residents would be protected during and after the expansion.

Munk specialized engineers would assist in the project, and that anything that emits from its smokestacks gets “whacked” so that no volatile organic material gets out.

“All this equipment here is designed to minimize exposure to dust,” he said. “We don’t want to expose our workers to dust. We don’t want to expose our neighbors to dust.”

Councilman Elmer Trombley asked if the expansion depends on acquiring property north of Ash Stevens, though he and other officials were careful not to name that property.

Control Manufacturing Corp., 18601 Krause, is just north of the Ash Stevens property. The company is a manufacturer of blowers and fans, and fabricated structural metal. It provides air cleaning and purifying equipment.

While also not naming the property or its owners, Munk said they were “interested” and “looking to wind things down in an orderly fashion, maybe move or reduce staff.”

“We’re certainly very happy to work with those guys to make anything happen they’d like to have. We’re not desperate for the land today – it’s a part really of a five-year expansion plan.”

A man who answered the telephone Friday at Control Manufacturing said operations have been downsized significantly by the current recession, but that he was unaware of plans to close or sell the plant. President Harold Raines was out of town and not scheduled to return until tomorrow.

Business profiler Dun & Bradstreet lists the company as having 20 to 49 employees.

“We’ve been spending money like crazy on our building that we built starting 10 years ago,” Munk said. “We were able to put another $9.4 million into that and we’ll continue. A lot of the four walls that we already have will be added to.

“We’re looking to the future. We’re looking to where we’ll be in 10, 15 years. I’d like to be right here in Riverview.”

City Manager Dean Workman mentioned some details about safety features at Ash Stevens.

“All the rooms where they do any type of work there is a negative draft, so if you open a door or a window… it sucks the air in – it doesn’t blow air out,” Workman said. “And all water … is collected and it goes into a storage tank. Water doesn’t even leave the facility.”

Munk said secondary containment surrounds “absolutely everything” in an effort to eliminate potential damage from leaks.