Toyota Industrial Equipment Manufacturing Inc. has received a 10-year break on its property taxes to help with a $20 million expansion at its Inwood Drive plant.
The company is gearing up for an expansion into South America, which will involve the production of some parts and sub-assemblies for forklifts at the plant in the Woodside Industrial Park near Walesboro, company officials told the Columbus City Council. The company expects to eventually add up to 50 local employees for the expansion.
The company has 717 permanent employees and 180 temporary employees and pays salaries and wages of about $44.6 million, according to its tax abatement request to the city.
Joe Kurdziel, account manager at TIEM, said 99 percent of what the company produces are forklifts and those are mostly for the North American market, where it is the industry leader, with just more than 20 percent of the market share.
“It is a pretty tough market,” Kurdziel said. “As you can imagine, there is limited amount of expansion you can do in the United States. Everyone is fighting over the amount of business that is out there.”
He said the company’s strategy is to penetrate other markets.
The company has built a plant in Brazil to move into the South American market, Kurdziel said. The Columbus plant will subsidize the parts for that plant, by producing them on the main lines here, he said. Among the new employees needed locally will be those who will move the parts with forklifts, assemble, package and load the parts and sub-assemblies.
The company paid $840,261 in property taxes this year and $396,375 in personal property taxes, according to documents filed with the tax abatement request.
In a tax abatement, taxes on improvements are waived for the first year and then phased in over the life of the abatement. TIEM has received tax abatements in 11 previous years.
Mayor Kristen Brown pointed out during Tuesday’s City Council meeting that the company also is moving its corporate headquarters to Columbus and spending several million dollars on that expansion, for which it has not asked for any tax relief. The company expects to bring up to 100 executive and sales jobs to Columbus through that expansion.
The City Council voted 6-1 to approve the tax abatement resolution. Council member Aaron Hankins voted against the proposal.
Resolutions only require a single approval from the council.
Meanwhile, the council voted 4-1 to approve a three-year tax abatement for Tipton Park Offices to remodel the former Goodyear Columbus Tire building at 123 Second St. The building will be used for physician’s offices for Franciscan St. Francis Health.
Council member Frank Miller proposed limiting the abatement to three years, rather than going up to the allowable 10 years. He said the three years seemed like a good compromise after concerns were raised about the unusual approval of a tax abatement for a service business, rather than a primary manufacturer. The compromise was between denying the request outright or giving a full 10-year abatement, he said.
Miller said he sees the development as a unique situation, because it is positioned just past the Second Street Bridge on the western interest to the city, on a property that has been unused or underused for the past 13 years.
“By cutting it to three, we felt like Tipton Park Offices deserves some abatement on the amount of investment and the fact that they didn’t put a fast-food restaurant down there, they didn’t put (in) a used-car lot,” Miller said. “They could have put a lot of uses down there at the gateway that would not have looked good.”
Council member Jim Lienhoop put together a spreadsheet estimating the property tax savings to the owners over various lengths of abatements. Miller said that estimate showed the owners would save about $125,000 in property taxes over the life of a three-year abatement, compared with about $315,000 over the life of a 10-year abatement.