Tax abatement requests from two companies planning expansions in Edinburgh were approved in split votes Tuesday night by the Bartholomew County Council.
Both companies requested a 10-year phase-in of real property and five-years on new equipment. However, the discussion became heated at times when the abatement from Tsune America LLC was brought up.
The circular saw manufacturer, at 12550 N. Presidential Way, wants to build an 18,000-square-foot facility in a lot next to its current building, Greater Columbus Economic Development Corp. President Jason Hester said.
In exchange for abatements on $3 million in real property and $1 million spent on new equipment, Tsune would provide four new jobs and retain 31 current employees, Hester said.
After Hester’s presentation, council President Greg Duke began questioning why Tsune won’t be required to place funds immediately into the Tax Increment Financing (TIF) district.
Hester explained that no company pays into the TIF district until after their new or upgraded facility is completed and assessed. Once that is done, the payments into the TIF district begin the following year, he said.
In TIF districts, the amount of money from new industrial developments to various taxing units (schools, law enforcement, fire departments, etc.) is essentially frozen. Any increased tax revenue collected as a result of an increase in real estate property values is placed into a fund to promote commercial redevelopment for about 25 years.
However, the amount of money from existing businesses operating before the abatement is approved continues to go to taxing units such as police, firefighters and schools while the TIF is in effect.
The relatively new TIF district in the Taylorsville/Edinburgh area has less than $5,000 accumulated at this time. However, there are other companies within the district that will raise TIF income up to about $121,000 by the end of the year, Hester said.
Duke said he had talked to “a very authoritative source” at a government conference who told him that “counties shoot themselves in the foot by doing this sort of behavior.”
After council member Jorge Morales reminded Duke that Tsune employees spend money at retailers, restaurants and other businesses that help strengthen the Bartholomew County’s economy, Duke replied many who work in the German Township TIF district live in surrounding counties.
In response, Hester said his research shows about 58% of those employees reside in Bartholomew County.
“We expect the bulk of the people that will be hired will also be local residents,” Hester said.
The abatement request passed with three in favor (Mark Gorbett, Matt Miller and Jorge Morales) while Duke and Bill Lentz voted against it. Evelyn Pence abstained after explaining she was not anticipating a vote that evening and was unprepared. The seventh council member, Scott Bonnell, did not attend the meeting.
There was considerably less discussion regarding the abatement request from Drug Plastics Closures Inc. The manufacturer of plastic packaging for medical supplies, located on West County Road 800N, sought a tax abatement on $14.7 million dollars in real property and $11 million in new equipment.
The company plans to build a new 60,000-square-foot facility that will connect its two existing buildings. As a result, 99 jobs will be retained with an average salary of $21.59 per hour. The company will hire 35 new workers at a salary of $21.84 per hour, according to the proposal.
Drug Plastics Closures will continue to pay $63,502 in real estate property taxes, as well as $66,099 in personal property taxes annually during the abatement period, Hester said.
The council approved the abatement request 5-1, with Lentz casting the negative vote.
