Manufacturing expansions in Chatham to create dozens of new jobs

Park Avenue Business Centre (Photo via Google Maps)

Over 250 new jobs are expected to come to Chatham-Kent with the sale of a public works garage in Chatham.

On August 10, council approved proceeding with the $750,000 sale of Unit 5 in the Park Avenue Business Centre, located at 540 Park Ave. E in Chatham.

According to the staff report, the municipality was approached by Onbelay Automotive Inc. to purchase the 25,000 square foot facility, which currently acts as a storage space, a maintenance area, and a wash bay for 40 heavy equipment and specialty vehicles used by the Public Works Department. Unit 5 lies adjacent to Onbelay’s current operations.

Additionally, Meritor Suspension Systems Company (MSSC), located 201 Park Ave. E, has advised the municipality that it would like to transfer stabilizer bar production from its Kentucky facility to Chatham-Kent in November of 2020. MSSC product is shipped to Onbelay Automotive Inc. for powder coating, assembly and shipment.

As a result of the business move, 68 new jobs will be created by MSSC and 60 new jobs by Onbelay in addition to dozens of jobs created indirectly.

“Given the type of investment and income-level of jobs created, OMAFRA has confirmed that a 2.0 industry-specific multiplier rate is reasonable,” the report stated. “Therefore, it is estimated that an additional 125 indirect jobs will be created as a result of the increase in local manufacturing.”

The projected new jobs are anticipated to pay well above Chatham-Kent’s living wage of $34,000 per year and fit in line with the manufacturing national annual salary average of $52,000.

To facilitate the additional manufacturing, a 25,000 sq. ft. expansion is required at Park Avenue Business Park to complement Onbelay’s existing operations in the same facility. If the expansion is not provided, MSSC and Onbelay have advised that the jobs will remain in Kentucky or move to Mexico.

Onbelay has offered $750,000 to the municipality for the purchase of Unit 5 which includes the transfer of a small piece of land formally used as a helipad.

Along with the approval of the sale was also the approval of the municipality proceeding with the design and construction of a new 20,000 square foot public works garage at the Park Avenue Business Centre.  The new garage will come in at an estimated net investment of $2,750,000.

The report notes that the current garage in Unit 5 was never intended to be used as a Public Works garage and currently has several inefficiencies including poor draining, poor visibility for large vehicles and a lack of space for public works vehicles to maneuver in.

“For many years, public works has examined alternative locations, but the cost to buy or rent another facility, coupled with the lack of an offer to purchase the Unit 5 property, did not generate a sufficient business case for council consideration,” read the report.

Administration is recommending three options for funding the new public works garage including reallocating current reserves, debenture the net cost for 20 years and utilizing the proceeds that are anticipated from the Safe Restart Agreement between the federal and provincial governments.

The recommended funding source will be identified when the tender approval report comes to council in the fall and the details of the government stimulus programs are known.