Kalamazoo: Economy

Major Industries and Commercial Activity

Kalamazoo is located close to the automobile manufacturing center of Detroit, Michigan, and the Kalamazoo area has automotive components companies and plastics firms that make automotive testing equipment and hydraulic systems. Eaton Corporation's North American truck component headquarters and Checker Motors are also based in the city.

Kalamazoo's diversified economic base also includes the production of pharmaceutical and medical products, cereals, and paper products, as well as financial services.

Downtown Kalamazoo remains the site of Pfizer's offices, manufacturing facilities, and research labs following its buyout of the homegrown Pharmacia & Upjohn Company (whose presence in the community dated back more than a century) which has helped to keep the local economy somewhat stable. Once a giant paper production area, Kalamazoo's importance in this field has greatly diminished. However, several paper manufacturing firms, such as the James River Corporation, continue to manufacture paper items locally.

Western Michigan University, which employs nearly 2,900 people, also makes a significant contribution to the local economy. One of Kalamazoo County's fastest growing employers is National City Bank. Farms near the city produce hay and corn, as well as fruit.

Items and goods produced: fruit, flowering plants, peppermint, and other agricultural products; pharmaceuticals; paper and paper products; metal products; machinery; guitars

Incentive Programs—New and Existing Companies

Local programs

Kalamazoo's Community Planning and Development Department assists local businesses and industries by providing technical assistance with site selection for expansion or relocation, through tax abatements, and by providing help with permits and other paperwork. The Brownfield Redevelopment Financing Act is operated by the city and provides many tax relief benefits to redevelopers. Southwest Michigan First is an organization dedicated to developing and implementing a successful long-term economic strategy for the area. Kalamazoo College's Stryker Center provides small businesses with information in obtaining commercial loans. The Small Business Revolving Fund can supply up to $40,000 in funding.

State programs

The Michigan Economic Growth Authority (MEGA) was created to further the formation of new jobs that feed into a prosperous economy. Small Business Tax (SBT) credits are available for fiscally-responsible companies in the fields of manufacturing, research and development, wholesale trade, or office operations. Michigan communities can abate up to 50 percent of local property taxes for up to 12 years. Since 2001 the Kalamazoo area has six designated Renaissance Zones that, if a business locates inside the zone, allows for waiving a variety of taxes such as the single business tax, local real property tax, and utility users tax. State law also exempts inventory, pollution control equipment, and certain tools, dies, jigs, and fixtures from local property taxes.

Job training programs

Michigan offers a coordinated job training system called "Michigan Works!" using federal, state, and local resources to provide a highly productive and trained workforce. The federal Workforce Investment Act (WIA) and state Michigan Department of Labor and Economic Growth (MDLEG) provide funding for the grants that assist in increasing worker productivity. The training itself is done through the institution of the company's choice. Free recruitment and screening services are available for new and expanding employers through the Michigan Employment Security Administration's job service and also through several local school districts. However, all hiring decisions belong to the company.

Development Projects

Kalamazoo's Neighborhood and Economic Development office helps in identifying and promoting properties that are prime for building. A $2.83 million grant from the Clean Michigan Initiative Waterfront Redevelopment is playing a part in the "Riverfront Redevelopment Plan" that strives to utilize the land for a mix of business and residential purposes.

Western Michigan University's Business Technology and Research Park continued expansion of its Southwest Michigan Innovation Center (SMIC) and ability to draw advanced engineering, life sciences, and information technology companies has proved to be a major economic catalyst for the area. When Pfizer acquired Pharmacia & Upjohn Company in 2002, the Southwest Michigan First organization played a vital role in retaining scientists with its "Stick Around" campaign. This effort has allowed for nearly two dozen companies to move into the research park including VDDI Pharmaceuticals in 2003 and TEKNA Solutions Inc., who announced in March 2005 that it will build a 24,000-square-foot facility.

In a continued effort for a new justice center in the downtown area to centralize Kalamazoo's public safety and court facilities, a bond proposal was put into action in April 2005 by the Kalamazoo County Board of Commissioners. A new $32 million wing terminal was to begin construction in the summer of 2005 that will increase the Kalamazoo/Battle Creek International Airport to 93,000 square feet.

In 2005 a groundbreaking was planned for a new Michigan Space & Science Center at the Air Zoo. It will host a $30 million space artifact collection acquired from the previous facility at Jackson Community College and be located on 30,000 square feet of land that will include a 120-seat theater. Nearby Gilmore Car Museum expanded their facilities by 50 percent with the addition of three exhibit buildings in 2004.

Economic Development Information: Southwest Michigan First, 346 W. Michigan Ave., Kalamazoo, MI 49007; telephone (269)553-9588; fax (269)553-6897; email info@southwestmichiganfirst.com

Commercial Shipping

Kalamazoo County has 26 motor carriers; ConRail and Grand Trunk Western railways provide freight rail service.

Labor Force and Employment Outlook

Kalamazoo is said to have a diverse labor force with a wide range of skills. Local colleges assist job seekers via training and placement programs in conjunction with area businesses. The economic recession in the early 2000s took a toll on area employment opportunities, though, with dramatic declines in the manufacturing sector. According to the W. E. Upjohn Institute, as of March 2005 the manufacturing industry failed to progress at a similar rate to national levels resulting in the loss of several hundred potential positions. Private education and healthcare were great performers for Kalamazoo, both exceeding national growth. Overall, the Institute does project modest gains in total employment, particularly in the service industry, with manufacturing looking toward slight improvement.

The following is a summary of data regarding the Kalamazoo-Portage metropolitan area labor force, 2004 annual average.

Size of nonagricultural labor force: 144,300

Number of workers employed in . . .

construction and mining: 6,500

manufacturing: 24,500

trade, transportation, and utilities: 25,500

information: 1,500

financial activities: 7,600

professional and business services: 14,100

educational and health services: 19,800

leisure and hospitality: 14,900

other services: 6,700

government: 23,300

Average hourly earnings of production workers employed in manufacturing: $15.90

Unemployment rate: 6.5% (February 2005)

Kalamazoo: Economy

Largest employers (Kalamazoo-Portage area) Number of employees
Pfizer 6,100
Bronson Hospital 3,000
National City Bank 2,922
Western Michigan University 2,887
Borgess Health Alliance 2,410
Meijer, Inc. 2,400
Kalamazoo Public Schools 2,300
Portage Public Schools 2,300
Stryker Corporation (hospital equipment) 1,400
Kalamazoo Valley Community College 1,100

Cost of Living

The following is a summary of data regarding several key cost of living factors for the Kalamazoo area.

2004 ACCRA Cost of Living Index: Not reported

2004 ACCRA Average House Price: Not reported

State income tax rate: 3.9%

State sales tax rate: 6.0%

Local income tax rate: None

Local sales tax rate: None

Property tax rate: up to 25 mills per $1,000 (2005)

Economic Information: Kalamazoo Regional Chamber of Commerce, 346 W. Michigan Ave., Kalamazoo, MI 49007; telephone (269)381-4000; fax (269)343-0430; email editor@kazoochamber.com