Bartholomew County Council members approved the eighth tax abatement in 12 years for a manufacturer near Edinburgh on Tuesday.
As a result, 46 jobs will be created and 108 jobs will be retained at Georg Utz, Inc. by the end of next year, company finance manager Penny Grubbs said. An application filed by the company states the expected average wage will be $25.13 per hour.
Located on a 35-acres site north of the Edinburgh Premium Outlets, Georg Utz, Inc. has produced custom and standard plastic containers for industrial, logistic and storage industries since 2009.
The company will spend $11.8 million to expand its production and warehouse facility by 135,500 square feet, said Michael Chiado, President of Americas for the subsidiary of Georg Utz Holding AG of Switzerland.
Another $7.5 million will be spent on new equipment, which will bring the total investment at the facility on County Road 250W up to $19.3 million, Chiado said.
Tax abatements phase in new property taxes created when a company builds a new plant or an existing firm expands and improves their current building and/or purchases new equipment, according to Jason Hester, President of the Greater Columbus Economic Development Corp.
While the phase in of property taxes usually takes place over a 10-year period for real property like buildings, equipment upgrades are normally given only a five-year abatement because of depreciation, Hester said.
The abatement was approved by the council 5-2, with members Greg Duke and Bill Lentz voting against the proposal. Concern was expressed by some council members that all the previous abatements may be shortchanging schools, fire departments and other public institutions that need property tax revenue to operate.
Tax-funded organizations continue to receive the same level of public funding during an abatement as they did prior to the development. It’s only the increased taxes resulting from development that are phased in.
A second abatement approved Monday to allow the construction of a 50,000 square foot building is unusual because an occupant has not been secured at this time.
The request came from Harold Force, president of Force Construction, Inc. But as he addressed the council Tuesday, he spoke as the head of Force Holdings, LLC – a family-owned investment and development company.
The abatement request is to create Force Holdings’ fourth speculative shell building for companies seeking an already-made building that they can occupy in a comparatively short period of time.
It will be located on two lots within the Meadow Lawn Industrial Park, located north of County Road 800N between Executive Drive and County Road 250W.
The family company will initially invest about $3.2 million to construct the building, the application states. Additional investments will be made to complete the interior of the building to fit the needs of whatever company purchases it.
Force and Hester told the council that Bartholomew County is missing economic development opportunities by not constructing a sufficient number of these shell buildings, which they say are being increasingly sought by companies.
Force Holdings asked that their phase-in of property taxes be provided in the amount of 95% for years one through five of the project, before gradually being reduced for the remaining five years. The intention is to ensure that as much of the tax abatement be preserved for the benefit of the future purchaser of the facility as possible, Hester said.
When asked how long it might take to sell the shell building, Force said the previous buildings financed through Force Holdings sold between one to three years.
What seemed to convince most council members to support the abatement was Hester’s assertion that the agricultural land now at the site only brings in a little over $100 a year in property tax revenue. But even with the abatement, the shell building will bring in close to $1,000 a year, with more potential revenue in the future.
Force Holdings’ request was approved 6-1, with Lentz casting the only nay vote.
Both abatements were considered only after the council approve a legally-required declaratory resolution that creates a economic revitalization area on all four sides of Exit 76 from Interstate 65 in Taylorsville. The area is on both sides of U.S. 31, with West Larea Avenue near Heritage Heights to the south, and County Road 900N to the north.
The county wants economic development to occur within this area because it’s zoned for industrial use, and already has utilities and other infrastructure installed for those purposes, Hester said.
If the 670 acres of available development sites within this area are all used, it has the potential to create 2,479 jobs with an average wage of $19.60 per hour, Hester said.
Companies seeking abatements within the area will now find the process streamlined after Tuesday’s approval because they will only need to appear once before the council to make their request, Hester said. In contrast, companies including Georg Utz, Inc. have taken at least three additional steps for each abatement request.
Nobody spoke for or against the resolution during a public hearing held prior to the vote on the declaratory resolution.
