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4/20/2017 11:44:00 AM
La Porte companies report on progress with tax-abatement deals

Jon Gard, Herald-Argus

La PORTE — All six manufacturing companies granted tax abatements in recent years are in compliance with the terms of their agreements, La Porte City Council members certified Monday night.

Annual compliance forms were filed for MonoSol; Winn Machine; Jaeger-Unitek Sealing Solutions; Jadra, which is doing business as Plastic Package; American Renolit; and Howmet Casting, which is doing business as Arconic. Each form was reviewed by City Planner Beth Shrader and was presented to the council for approval.

Each of the companies must show it has met or made substantial progress toward stated goals in employment, salaries and investment. Some companies had more than one abatement.

Jaeger, for the third year of a vacant building deduction approved in 2014, exceeded all expectations, creating 48 rather than 26 jobs, paying $1.7 million in salaries rather than $811,000 and investing more than $1.1 million in real estate improvements rather than the $420,000 it had estimated. 

In cases where a company fails to met the goals on its original statement of benefits, it must show it made a reasonable effort to comply and that any failure to meet the goals was for reasons beyond its control.

For example, American Renolit, reporting on the final year of two 10-year abatements, said in a statement it closed three production lines in 2009 in the face of lower-priced foreign competition and fluctuating oil prices. But the move allowed the company to focus on its core business, which has resulted in a steadily increasing employee headcount and plans for a new office building on the same site.

Although it hired only 11 new employees rather than 25, American Renolit nearly met its new-salary goal of $532,000. The company achieved less than half its $3.6 million real estate improvement goal but met a $9 million investment goal for manufacturing equipment.

Abatements are incentives used by local governments to encourage investment and job creation in the private sector. Taxes on new property development or new manufacturing equipment are suspended the first year and gradually phased in over five or 10 years, depending on the agreement. 

Winn Machine, which has completed the second year in a five-year agreement, was making substantial progress toward its goals, according to the report, creating three new jobs so far and investing about $206,000 in manufacturing equipment.

“They’re moving in the right direction,” Bert Cook, executive director of the Greater La Porte Economic Development Corp., told the council.

Arconic, formerly Howmet Casting, reporting on two 10-year abatements, said it was gradually meeting job-creation and salary goals and has far exceeded real estate investment. The report said the company initially expected to invest about $27.7 million and has actually invested $64.7 million. 

Copyright 2017 Herald Argus

Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR

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