GOSHEN — Goshen City Council members Tuesday agreed to allow area manufacturer Lippert Components to continue receiving tax phase-in benefits for three of its Goshen properties.
The council arrived at its decision following a hearing to determine whether or not Lippert, a leading supplier of components to the recreational vehicle, residential housing and numerous other industries, was in compliance with a seven-year tax phase-in agreement established with the city back in 2013 connected to expansion plans for its properties at 2703 College Ave., 1701 Century Drive and 2475 Kercher Road.
A tax phase-in is a partial or temporary exemption of a company from having to pay property taxes with the express purpose of stimulating economic development. In Lippert’s case, the approved tax phase-in was projected to save the company about $484,000 over the course of the seven-year agreement, according to the city.
Lippert officials, at the time the contract was signed, indicated they would be adding new manufacturing equipment, painting equipment, lathes and dust collectors at the three Goshen properties at a cost of about $10 million, resulting in the creation of up to 376 new jobs within the first few years of the agreement.
As part of the tax phase-in agreement, Lippert agreed to submit yearly Compliance with Statement of Benefits (CF-1) forms to the city outlining the company’s progress toward reaching its investment and job-creation goals.
According to Goshen Mayor Jeremy Stutsman, who first announced the situation during the council’s June 6 meeting, the company’s most recent CF-1 raised some concerns about compliance, particularly as it relates to Lippert’s job creation claims, leading to the call for Tuesday’s hearing.
Per the CF-1, Lippert started with 1,078 employees at the three properties in question in 2013, and currently has around 838 employees, a reduction of 240 employees. That reduction in employees, coupled with the promise to create 376 addition jobs, essentially put them at minus 616 jobs from where they thought they would be at the three facilities, Stutsman explained.
Given the apparent discrepancy between the company’s promised job creation numbers back in 2013 and its actual job creation numbers to date, council members during their June 6 meeting voted to find Lippert in noncompliance with the phase-in agreement due to issues within the company’s control, which in turn triggered Tuesday’s hearing.
Above and beyond
At Tuesday’s hearing, Lippert Components Controller Troy Wuthrich was asked to explain why the company hadn’t met its job creation goals at the three facilities in question.
According to Wuthrich, the company is currently employing about 3,900 people at its facilities in the Goshen area, about half of its overall employee base of 8,000. Along those lines, Wuthrich noted that while the company is slightly under what it had originally promised in terms of jobs at the three facilities to date, part of that is due to recent shifts in employees from one facility to another as business dictates, and does not reflect the company’s overall hiring for the area, which is above and beyond what was promised with the 2013 agreement. Wuthrich also pointed to the overall shortage of employees in Elkhart County — about 15,000 to 20,000 workers at this point — as contributing to the issue.
“I am not here to say that the whole shortage on the CF-1 is due to the employment situation. It is a big result of us moving facilities around to help us supply this industry,” Wuthrich said. “Had we not made those changes, it would have been pretty much impossible for us to supply our customers or for us to get product out of this county.”
Wuthrich also noted that Lippert in recent years has worked very hard to improve it’s overall work environment and employee satisfaction — something he said he is happy to report has been very successful.
“Our company two years ago experienced over 100 percent turnover,” Wuthrich noted. “At that point we were 5,000 employees. So we set out to change some of our practices, and today we are close to 35 percent to 36 percent turnover. So that’s a huge improvement. Lippert is committed to this community. Lippert is committed to making this a better place to work, a better place to live, our future is bright, and we just ask for you to kind of look at this a little bit different maybe and see the overall commitment we’ve done in the city of Goshen.”
Mayor Stutsman echoed Wuthrich’s comments.
“Looking at all these numbers, I think it’s very obvious that Lippert has grown for the positive in our community, and they have met at least what I was hoping would happen with this phase-in and building a stronger community,” Stutsman said in expressing his support for the phase-in agreement. “The reason that they didn’t meet the numbers at these locations is because they’re expanding and they’re growing, and I think that’s really good for our community.”
In the end, a majority of the council agreed, and the phase-in agreement was allowed to remain in place.