City still fighting to keep Kowalski

By Charles Sercombe

There’s been little development since last week’s media frenzy about the Kowalski Sausage Co. thinking of moving out of Hamtramck.

The company became part of massive media coverage after recently receiving a zoning change to make way for a possible relocation at a vacant Sam’s Club in Madison Heights.

Hamtramck city officials say they have met with the company to find out how it could be persuaded to remain here. The upshot is that Kowalski needs a huge warehouse space to consolidate its business and expand.

Officials here say there is a good chance a deal laced with tax and development incentives can be put together to keep Kowalski here.

Kowalski has not returned repeated calls from The Review, but the company’s CEO has spoken to a select number of Detroit-based reporters.

But there were disturbing reports over the week that indicate Kowalski won’t be able or afford to build new facility and that there is a good chance the 91-year-old company will move out.

In Crain’s Detroit, columnist Nathan Skid talked with Kowalski CEO Mike Kowalski who said every day the company stays in the Hamtramck it loses money. The problem is, Kowalski has three buildings in which it produces its products.

Kowalski told Skid that “the sooner we are able to get out of this building, the better” — meaning the main factory on Holbrook.

City officials are trying to put together land in the city as well as possibly gather land next to the existing plant, which would require buying several pieces of property.

Just how fast and easy that could be put together is the big question. And even if the land nearby the existing plant were acquired in a timely manner, the next question is: Can a new plant be built at the existing site while still allowing production to continue?

It looks like it would be a delicate ballet move in the best scenario.

Kowalski’s possible move comes at a time when Hamtramck is hurting financially. While the loss in property and income tax revenue isn’t a great amount – about $42,000 a year – it would be yet another blow to the city.

Hamtramck is facing a $3.5 million budget deficit. City officials have taken the unprecedented action of asking state officials permission to file for bankruptcy before the city’s cash flow runs out.

So far, the state has said no to that request and has instead offered four loan options.

With all this talk of going bankrupt, how is this affecting the city’s attempt to attract new businesses?

Jason Friedmann, the city’s Director of Community & Economic Development, said the talk of bankruptcy has presented a challenge.

“It’s making it very difficult,” he said, in terms of selling the city to potential developers. “We’re trying to keep up the good word, but it’s definitely the first thing that comes up.”

Friedmann pointed out, though, that there is a major housing development coming and that several storefronts will undergo major façade improvements.