Traverse City Record-Eagle

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September 17, 2009

Insurer proposes local expansion

Auto-Owners seeks zoning approval, abatement

BY BILL O'BRIEN

TRAVERSE CITY -- A major expansion is proposed to house a new data collection center at Auto-Owners Insurance Co.'s complex off Hammond Road in East Bay Township.

The Lansing-based insurance company wants township zoning approval and a personal property tax abatement worth almost $100,000 a year. The project is a 32,000-square-foot, partially underground building that will house the company's secondary digital data storage equipment.

The estimated development cost is $15 to $20 million, plus another $10 million for computer and other storage equipment.

Auto-Owners' existing facility off Hammond Road is around 45,000-square feet, deputy township zoning administrator Leslie Couturier said.

Additional phases at the Auto-Owners complex were part of a 2001 township-approved planned unit development (PUD) agreement, she said. But township officials determined another review is needed because the expansion includes two 40,000-gallon underground diesel fuel storage tanks to operate a back-up generator in case of a power outage.

The township Planning Commission will meet Oct. 6 to review the plans, Couturier said. The township board has to approve the final plan.

Company representatives told township officials the new data center will create up to 10 new programming jobs and other IT service positions, plus 60 to 80 construction jobs during the 18-month building period. The project will enable the company to bring its data management services in house. They are presently outsourced to a company in Colorado, officials said.

Township Supervisor Glen Lile also will meet with company representatives next week to discuss a property tax exemption to cover personal property within the expansion, such as computers and related storage equipment. The exemption is provided for under a 1998 state law that allows communities to waive all local and state taxes on personal property in specific areas to stimulate new economic development. The exemption only covers personal property and not real property like buildings and real estate.

The company is seeking a 20-year exemption worth an estimated tax savings of $96,000 per year, according to the request submitted to the township. The State Tax Commission also has to sign off on the tax waiver if local approval is received.

Lile said the township has three existing tax abatement districts, including one at the East Bay Business Park off Three Mile Road that's attracted a handful of new tenants because of property tax waivers.

"We've had three or four businesses come in the business park because of it," Lile said.

The company is working with the Traverse Bay Economic Development Corp. on the expansion and the tax abatement. Auto-Owners and EDC officials did not immediately respond to requests for comment.

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