The Dexter Leader
A Heritage Newspaper
Weekly Publication
Tech firm moves to Dexter, gets tax break
By Sean Dalton, Staff Writer
PUBLISHED: May 22, 2008
The newest addition to the village's industrial park will move into its new building on Bishop Circle next week, after receiving support from the Village Council for requested tax abatements.
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K-Space Associates, Inc. at 2182 Bishop Circle East was before the council last week to plead the company's case.
"We're a spinoff from the University of Michigan that was fortunate enough over the years to finally earn enough income to do our own construction in the research park," said K-Space General Manager and Vice President Darryl Barlett at last week's meeting.
"We're hoping to get this tax abatement to help alleviate the cost over the next few years."
K-Space manufactures products for the semiconductor and thin-film deposition markets. The company was incorporated in 1992.
The Industrial Facilities Tax Exemption will apply to $875,450 in real and personal property tax liability.
The 6,840-square-foot facility is valued at $905,000 and contains $70,000 worth of personal property, according to the village's public hearing notice letter field by Village Manager Donna Dettling.
The few potential council members skeptical of giving the company such an exemption were apparently impressed with the company or saw the value of easing K-Space's transition to the village, like Trustee Paul Cousins.
"I generally oppose these for any other reason that it is not equal treatment for other business owners, and the other factor is that there are communities that have given these out and those businesses have left those communities high and dry," he said. "But I think this one is a special case. Maybe I'm softening in my old age, but I'm going to support this one."
The council unanimously passed the measure.
The exemption will remain in effect for four years, on the condition that the company remains in the village.
The penalty, if K-Space does move, would be retroactive revocation of the abatement and repayment of abated taxes, although that isn't likely to happen, according to Barlett.
He says he is pleased to be near his home in Webster Township and that those above and below him in the company are pleased with the move.
According to Barlett, the company will be a strong addition to the village's industrial park.
The U-M research and development spin-off boasts such customers as Intel, Motorola and many others in the North American and European semiconductor markets.
The company also works with many universities in and out of the state, including U of M, Michigan State and Wayne State University.
"Companies that produce processors and memory chips use our monitoring tools during the research process," Barlett said.
Barlett was a graduate student of the U-M applied physics department when he approached his professor, Roy Clark, about a chip diagnostic technique using electron deflection and its potential practical application in the market.
The company has been based in Ann Arbor for 16 years and reached a level of product development that it stopped paying royalties to U of M in 1998, according to Barlett.
"Washtenaw County SPARK and the (Michigan Economic Development Corporation) recommended Dexter as a good place to get financial assistance," he said. "From there we worked with Rand Construction to get our current location in the industrial park."
The company has 14 employees at the moment, but Barlett says the idea is to add two more each year until the company reaches 25 or so employees under current market conditions.
Further affirming K-Space's success is the Michigan 50 Award, which the company received this year. That award is given to the 50 top businesses in the state.
"We just reported $3 million in sales right now and we're steadily ramping up 15 to 20 percent each year," Barlett said. "We're looking at 20 percent this year."
He sees K-Space as a safe bet for the community, since the semiconductor industry is virtually immune to any ill effects of the auto industry.
"We're immune to the Michigan economy," Barlett said. "We should be in Silicon Valley, but we have a great tech base in Ann Arbor, and I'm a Michigan guy all the way and we're not going anywhere."
A weak dollar also bodes well for the company's sales to European customers, who Barlett says are effectively getting products at a 40 percent discount.
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