03/22/2006

Editorial

Renaissance zone is idea worth pursuing

News of Georgia-Pacific's recent surprise closing of its particle board factory in Gaylord ricocheted across northern Michigan, stunning its 210 permanently laid-off workers, local residents and businesses across northern Michigan.

GP — and forerunners U.S. Plywood and Champion Building Products — have been an economic mainstay in Gaylord since 1964 when U.S. Plywood opened a plant after seven years of negotiation with city officials. Most of GP's employees earned $15 to $20 per hour plus benefits.

The "ripple effect" pierces far more than the 210 workers and their families. It hurts loggers, truck drivers and the people working on them, "right down to the poor guy sharpening the blades on the chain saws," says John Bird, manager of Scientific Brake and Equipment in Gaylord. Bird doesn't expect layoffs but does anticipate fewer repair jobs from truckers on deliveries to the factory.

Lake State Railway Company officials said GP accounted for 88 percent of its traffic between Grayling and Gaylord. GP's closing could add up to a $700,000 loss in revenue, railway officials said. Realtors are worried about the effect on the real estate market. Nine people on temporary layoffs at Crossroads Industries, a not-for-profit plant that hires people with disabilities, went on permanent layoffs after the closure was announced.

Alpenfest, United Way and other service groups in the community that received donations or volunteer help from the corporation and its workers are also worried. The company paid more than $425,000 in local taxes last year on its plant and the 705 acres it sits on in Otsego County's Bagley Township.

Community and state leaders already are working hard to find a way to fill GP's gap. State lawmakers, Sen. Tony Stamas of Bay City, Rep. Kevin Elsenheimer of Bellaire and Sen. Jason Allen of Traverse City, would like to designate GP's factory and land a tax-free renaissance zone. Other proposed state bills would provide funds to retrain laid-off workers, encourage grants for railroad expansion and state funds for two proposed interstate overpasses.

A state renaissance zone designation for the building and property would help void local and state taxes for 12 years and then gradually reinstate them over three years. It sounds like a solution worth pursuing, especially when the state has given such tax abatements to firms that are still operating like Graceland Fruit in Benzie County.

Bagley officials aren't sure a renaissance is a good idea for township and county governments, but others suggest that may be exactly what Gaylord needs to make it look better than a downstate city to a company looking for a place to set up shop.