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Mission EDC/EDA to reassess Royal Technologies incentives

20140425 MISSION Royal-Technologies 1732The new Royal Technologies plant was expected to cost about $15 million when the partnership between the city of Mission and Royal Technologies originally was announced.

But as workers finish up the new facility, the price tag at the end of eight years is expected to hit between $35 and $40 million and the company, headquartered in Michigan, is expecting to hire three times as many employees than originally anticipated.

“We have to satisfy our customer needs, so what started out as a smaller project ended up being much larger,” said owner Jim Vander Kolk. “Part of our expansion here is growth for the future.

Mission Economic Development Corporation and Economic Development Authority agreed to hold a public hearing May 22 to discuss increasing the incentives originally planned for the Royal Technologies plant.

Currently, the EDC and EDA have approved $1.1 million in incentives for Royal Technologies–that includes $400,000 in tax abatements over the next five years and $700,000 in reimbursements for job creation and capital investments.

Alex Meade, Mission EDC executive director, said at the public hearing the EDA will consider increasing the reimbursement. In the end, if Royal Technologies meets all the criteria, the final incentive total could be increased to between $2.3 million and $2.7 million, depending on the total investment at the end of eight years.

Royal Technologies is the business every city hopes will come in and set up shop, Meade said, adding every community buys property for industrial parks hoping to lure the right “big” business into town. An EDC board member who has served since the EDA was created told Meade while touring the new facility that Royal Technologies is why the city bought the land 20 years ago.

“Even though Mission EDC and EDA has gone through many transitions over the years, to say we landed them, whatever happened was worth it,” Meade said.

He’s working on a ribbon cutting in July, and even though Royal Technologies is still transitioning to the new space, the project already has gained them business.

Before the Mission plant, Royal Technologies didn’t have the capacity to produce a part for all three lines of Ford trucks, the F150, F250 and F350. They had planned to submit a bid for just the F250 and F350, but didn’t expect to get the job because Ford wanted a plant that could work on all three lines, Meade said.

“Many people think that we’re reliant on the big companies or they give us the crumbs,” Meade said, “but if it wasn’t for us, the Michigan plant wouldn’t have gotten the big contract that they got.”

Because of all this, the Mission EDC took money set aside to by a magazine advertisement and paid for a gold membership at the Detroit Chamber of Commerce. Meade said he pushed the idea that Mission wants to open the doors for more companies in Michigan to expand along the border. Now Mission EDC’s logo has been placed inside the chamber’s building and is on the website.

For his part, Vander Kolk emphasized his company is not just about making money, though if it doesn’t make a profit, it can’t survive.

He plans to promote education and invite students to tour the factory. The company also is working with South Texas College to teach some of its employees English.

“I have to look at the mirror and say to myself, ‘How can we be a very good neighbor to the community?’” Vander Kolk said.

Vander Kolk started Royal Technologies in 1987 in West Michigan as a 10,000-square-foot machine shop. Today, it’s grown to 1,400,000 square feet with 1,100 employees.

“I was just going to be a little machine shop,” Vander Kolk said. “I always worked very hard to be fair and honest, be a person of integrity and I always wanted to go more than halfway to serve my customer.”

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