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Posted on Fri, Jul 27, 2012 : 5:57 a.m.

Scio Township-based medical device manufacturer Terumo receives tax abatement on $4.9 million infrastructure investment

By Ben Freed

Terumo Cardiovascular Systems has been awarded a 12-year tax abatement by Scio Township for $4.9 million in capital investments to its headquarters in the township.

Barbara Schmid, a spokeswoman for Terumo CVS, said the investments are part of a consistent effort to improve the facilities, located just off of Jackson Road.

Terumo_Cardiovascular_Systems_Scio_Township_division.JPG

Terumo Cardiovascular Systems' headquarters is located just off of Jackson Road in Scio Township.

File photo | AnnArbor.com

The company manufactures medical devices, and specializes primarily in devices used in heart and lung operations.

“We’re doing renovations in several of our buildings, there are lighting upgrades, and we’re putting in a new training lab for one of our new business units,” she said.

Scio Township Supervisor Spaulding Clark said that abatements are used to encourage industrial development in communities across the state. When an abatement is given, it allows the property owner to slowly phase in payment of the increase in property taxes that come with property improvements.

Clark said the abatements are typically for 50 percent of the increase, and phase out over the period agreed upon by the taxing entity and the business.

“The township board are the ones who have final approval over the abatement,” he said.

“There’s a promise implicit in all this that either they will increase investment in the region, or perhaps increase their employment.”

Schmid said Terumo CVS has been increasing its employment levels significantly over the past two years, and plans to continue its investment in the Ann Arbor area.

The company employs about 600 full-time workers in the Ann Arbor area.

“Terumo has been part of the fabric of this community for many years, because of the strong business support and exceedingly talented workforce that lives here," Mark Sutter, president and chief executive officer of Terumo CVS, said in a news release.

Terumo Cardiovascular Systems was founded by Ann Arbor inventor Dick Sarns as Sarns, Inc. in the 1960s. Terumo’s parent company acquired then Sarns-3M in 1999.

Ann Arbor SPARK helped to facilitate Terumo’s application for the abatement and has worked closely with Terumo CVS in the past, helping the company find talent and economic incentives in the area.

Terumo also is in the process of completing a newly engineered quality system after the FDA placed a $35 million fine and manufacturing restrictions on the company last spring after quality control problems were identified. Schmid said that Terumo has met every time commitment thus far and the obligation is scheduled to be completed in spring 2013.

Ben Freed covers business for AnnArbor.com. Reach him at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2

Comments

a2scio

Fri, Jul 27, 2012 : 2:21 p.m.

Does this explain why Scio Township's roads are in such poor condition that local neighborhoods are taxing themselves to fix township roads? I do not live in a neighborhood that has taxed itself, but I often go on Upland Drive off of Scio Church Rd which has patches on patches on patches.

Tesla

Fri, Jul 27, 2012 : 4:20 p.m.

The area you talk about is not in Scio Township. Thats the city of Ann Arbor if I am not mistaken.

Arno B

Fri, Jul 27, 2012 : 12:57 p.m.

These "Tax Abatements" must be wonderful. I noted in a sidebar that Sakt3 is also looking for one. These abatements are supposed to "increase employment and continue investment." They obviously provide a proportionate disadvantge to the competition but that is seldom mentioned by our social planners. Why not just have an abatement for everyone? Wouldn't that obviously provide a huge boost for our economy?

Will Warner

Fri, Jul 27, 2012 : 8:06 p.m.

Mixmaster - "It's insane to think that if we continue down the tax cut road, we'll reap the rewards of the "job creators" It hasn't happened, has it?." How do you know that "it hasn't happened" unless you can show that we would not have had worse performance without the tax cuts? "The facts speak for themselves." No they don't; they require analysis. In particular, economic statics require regression analysis in which the effects of a single variable are understood in isolation from the effects of all the other variables? Have you done that? But forget statistics for a minute. Stop and think about what you know about how people actually behave. If it is true that tax cuts don't spur job creation, wouldn't that be a surprising result? Of course some true things are counter-intuitive. Is this an instance? People, especially business men, are motivate by self-interest (call it greed if you like). If we offer them then a chance to keep more of their profits, won't they re-double their economic exertions? And won't that in some case result in more jobs? I'm not asking you to agree that it would, only that a "finding" that it doesn't is rather surprising.

mixmaster

Fri, Jul 27, 2012 : 7:28 p.m.

@WillWarner. You're right, you can't prover a negative, but recent history gives us some indication of the "value" of tax cuts in relation to jobs created. 13 years of Bush tax cuts for the wealthy "job creators" and now we're in a deep global recession with the fewest jobs created in that period. It's insane to think that if we continue down the tax cut road, we'll reap the rewards of the "job creators" It hasn't happened, has it? The facts speak for themselves. Why this is lost on some people is beyond me, unless their blinded by the right wing pundits who spout Frank Luntz's talking points ad nauseum until they're accepted as fact by a few people. Bush tax cuts, particularly for the so called "job creators" created the fewest number of jobs under any recent president. That's a well known fact. Clinton raised taxes on the wealthiest and more than 20 million jobs were created during his 8 years. Also a well know fact. Why should we continue to repeat the policy mistakes of the past when there is no evidence whatsoever that those policies will help the nation get out of this recession? There's a good chance the the deficit would be less without the tax cuts and certainly far less when added to the cost of of the two Bush wars off that he and Congress didn't include in the budget. You can't have it both ways. Cutting the deficit will require tax increases and budget reductions. Republicans are adamantly opposed to taxes of any kind and refuse to compromise on new taxes in order to reduce the deficit.

Will Warner

Fri, Jul 27, 2012 : 4:14 p.m.

mixmaster -- "The Bush tax cuts led to the least number of jobs created ever under any recent presidents term." If you only had some way of knowing what would have been the situation without those cuts (or without the actions in your other examples) , then you' d really have something.

Michisbest

Fri, Jul 27, 2012 : 3:46 p.m.

Democrats huh So Kwame Kilpatric for Presidient and Monica Conyers for VP and Robert Fiacano for what. Yes them democrats do make history speak for it self. look waht 60 years of them did to Detroit and Wayne county

mixmaster

Fri, Jul 27, 2012 : 3:20 p.m.

The Bush tax cuts led to the least number of jobs created ever under any recent presidents term. Clinton's tax hikes happened while there were 20 million jobs created during his presidency. And he left Bush a balanced budget and a surplus. Reagan raised taxes 11 times during his presidency, never balanced a budget and left office with a deficit. Bush also got us into two wars off the budget book, paid for them with the nation's credit card while he cut taxes. Then he left President Obama a huge deficit and the deepest recession since the 1930's. History speaks for itself. If you want a balanced budget, job creation and no American lives lost from unnecessary wars, elect a Democrat.

Michisbest

Fri, Jul 27, 2012 : 2:55 p.m.

Mixmaster there is also no empirical data that says it doesn't connect with job creation either.

mixmaster

Fri, Jul 27, 2012 : 1:18 p.m.

There is no empirical data whatsoever that connects lower taxes with job creation.

Britx

Fri, Jul 27, 2012 : 12:34 p.m.

They are a good company and definitely contribute significantly to the local economy however I think that the state and local officials are too easily convinced to put financial incentives in front of companies such as this. A few years ago Terumo Cardiovascular Systems also received money from the Michigan Economic Development Corporation (MEDC) to transfer R&D and manufacturing operations from a plant in California to its Ann Arbor facility which they were going to do anyway. This is a well established business committed to growth of its cardiovascular business at this location and it would be extremely unlikely that they would move especially after the FDA consent decree. They have invested an enormous amount of money there to get it right.

Paul Revere

Thu, Sep 6, 2012 : 11:26 a.m.

Also, the public should look at the FDA wbesite for the amount of recalls coming from Terumo. http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfRES/res.cfm

Paul Revere

Thu, Sep 6, 2012 : 11:24 a.m.

The investment has been in consultants, not much in full-time employees. Also, have you looked at the FDA MAUDE database for their quality performance? This is PUBLIC information available on the quality of their products.

Will Warner

Fri, Jul 27, 2012 : 12:25 p.m.

I visit Terumo periodically, and every time I do, they've added another lot for employee parking and are overflowing it. I wouldn't be surprised to learn that they are the largest employer in Wash. county.

a2citizen

Fri, Jul 27, 2012 : 1:37 p.m.

http://www.annarborusa.org/expand-relocate/regional-data/top-employers 12th largest private employer

mixmaster

Fri, Jul 27, 2012 : 12:13 p.m.

I wonder how much $$ Terumo "invested" in Snyder's campaign. And those terrible gubmint regulations that cost them a $35 million fine hasn't seemed to slow down their profits or their investments.

Michisbest

Fri, Jul 27, 2012 : 2:57 p.m.

Maybe they should have given Obama money then he would have just dumped a half a billion in cash on them like Solyndra.

Britx

Fri, Jul 27, 2012 : 12:05 p.m.

You have to wonder why this is necessary. Terumo is a multi-billion dollar Japanese corporation that can easily fund its own development. Just yesterday they offered $640 million to create a joint business with Olympus in Japan.