Traverse City Record-Eagle

Garfield Township

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    Tower Automotive
January 20, 2010

Garfield Township suing Tower Automotive

BY BRIAN McGILLIVARY

TRAVERSE CITY -- Garfield Township is suing Tower Automotive LLC to recover more than $1 million in tax abatements granted to the now-closed automotive parts manufacturer.

The Livonia-based, multi-national company announced in September 2008 it would close its Garfield plant and lay off about 318 hourly workers and 40 salaried workers. Tax abatements granted by Garfield officials in 1998 and 2005 and renewed in 2007 on property and equipment had trimmed the company's tax bill by half.

But abatement terms required Tower to continue operating for 12 years.

"They were given the abatement to provide a certain number of jobs for so many years, which they did not do," said township Supervisor Chuck Korn. "We don't want the money, we wanted the jobs."

Tower employs more than 8,000 people in 13 countries, according to its Web site. A recorded message at Tower's headquarters on Tuesday said the company was closed for the holiday. Its attorney, Jason Conti, of Detroit, did not return a message left at his office.

The township contacted Tower early in 2009 about the abatements, shortly after officials documented that the company moved equipment from the plant.

"We've notified them six or seven times, and had three or four conversations with them, but they don't own up to it," said township Treasurer Jeane Blood. "They say they're still utilizing the building ... but it's for sale and nobody's working there."

An April 27 letter from Dennis Pike, vice president of tax and treasury for Tower Automotive, said Tower will continue "to be a member of the community" and asked the township to understand they were "forced to make a very difficult decision" due to the declining automotive industry.

"They're startled that we are going to enforce the contract," Korn said. "I have to believe a company this big would know it would incur an obligation by breaking a contract."

The township asked the state tax commission to revoke the abatements in August 2009.

Tower Automotive did not contest the action, but Pike's response to the twnship's request for payment became more terse.

Tower Automotive "continues to own and operate its Garfield Township facility in compliance with the granted tax abatements" and is under no legal obligation to refund the money, Pike wrote on Nov. 12.

Blood contends Tower hoped the township would drop the issue. Garfield officials in late December instead filed suit in 13th Circuit Court, then placed a notice on Tower Automotive's title to the property, warning potential buyers of court action for unpaid taxes.

Conti called the notice "illegal and slanderous" in a letter to the township's attorney. He threatened a counter-lawsuit for damages "in excess of $1 million" if it adversely affects Tower's ability to sell the property.

Township officials weren't swayed.

"It's both disingenuous and utterly ridiculous," Korn said. "I don't know if there was a lack of enforcement in the past that created this attitude, but there won't be a lack of enforcement in the future."

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