For the first time since the city of Wixom has issued tax abatements to businesses, the City Council voted Tuesday, Sept. 13 to revoke the tax abatement previously granted to NxtGen Emission Controls, Inc.
NxtGen, the Canadian-based clean technology company that sold products to reduce emissions and developed fuel efficiency improvements, was issued a 50 percent tax abatement package of $924,700 in personal property and $110,000 in real property for five years in 2008. It was slated to expire in 2013.
“We were placed on notice that NxtGen was going into receivership,” said Assistant City Manager Tony Nowicki. “We tried to contact them and even visited the building, but found it locked and closed up.”
Subsequently, city officials contacted the parent company in British Columbia, which conceded it was aware of NxtGen’s plight, but wouldn’t respond further other than stating the company had “ceased to exist,” according to Nowicki.
“We were then contacted via letter from the attorneys Boales, Wood and Company, Ltd. out of Vancouver who was handling the receivership,” said Wixom Assessment Technician Debe Barker. “The company’s intent was to sell its core product, a non-catalytic syngas generator, but the bottom fell out of the auto industry. It was poor timing.”
Wixom trumps all other lakes area communities in the number of tax abatements issued over the years and uses the incentive as a fundamental tool in drawing businesses into the city.
Under each tax abatement agreement, the company must provide jobs for Wixom residents. Each company is obligated to submit annual status reports by Jan. 31 indicating the number of employees hired.
Prior to NxtGen closing its doors, it paid its tax bills, but were deficient in meeting staffing requirements and its promised investment.
“They were non-compliant with the agreement,” Barker said. “They had six employees initially and only added one from the beginning of the contract. They were supposed to hire 43 within two years. They also never made an investment into the building.”
City administration has been directed to pursue recovering dollars from the company, but due to NxtGen’s bankruptcy, it may be futile.
“We won’t be getting reimbursed because NxtGen ceases to exist,” Nowicki said. “The possibility of recovering anything is improbable.”