Portage-based Beta Steel gets tax break to keep business rolling

PORTAGE — Beta Steel Corp. officials got the 10-year tax break they said they needed to keep the mill open.

After some concern about extending the usual five-year term, the Portage City Council on Tuesday passed a 10-year tax abatement for an investment in manufacturing equipment at Beta Steel.

The amended abatement was approved 6-0 with Councilman David Highlands abstaining, citing a conflict of interest after he said he favored the move.

“This is (a matter) of survival,” Beta chief David Pryzbylski told the council.

Beta attorney Richard Deahl said he asked for a longer abatement on personal property tax, instead of the standard five years, for three reasons.

“Beta’s customers want a better product, they want an alternative product and they want larger coils,” Deahl said.

He said industry standards have changed toward bigger, higher-density coils that will require revamping Beta’s entire manufacturing process at a cost of between $50 million and $70 million.

“They want the bigger coils for longer production runs to lower their costs,” Deahl said.

“They’ve put us on notice. We’ve lost some customers, and we stand to lose more,” Pryzbylski said.

He said Beta is the smallest flat-roll steel producer in North America, shipping half a million tons a year, but the per-ton cost of the new machinery matches any other investment in the global steel industry.

“It’s a risky proposition. We’re at a crossroads,” he said, adding that engineering and some equipment fabrication is already under way.

When asked by Councilwoman Elizabeth Modesto what would happen if he didn’t get the abatement, Pryzbylski said the company would scale back the scope of the project, possibly resulting in a drawn-out decline before shutting down.

“I’d like to see 50 percent of the 20 new people you’re going to hire come from Portage,” she said.

The separate vote on the amendment to allow the 10-year term passed 4-2 with Ed Gottschling and Olga Velazquez dissenting.

“The fact that you’re asking for this while you’ve got your 2002 taxes under appeal disturbs me,” Gottschling said.

Deahl replied the appeal was still being pursued in the company’s belief there were errors in the way its buildings and property were assessed.

Velazquez voiced safety concerns as trucks haul bigger, heavier steel coils on Portage roads.

“We’re just bringing it up to industry standards,” said Pryzbylski, adding that safety will be a major concern in handling the bigger coils.

The council also unanimously approved, as expected, a 10-year tax abatement for the Bass Pro Shops project of Ameriplex Northwest Partners in Ameriplex at the Port.