ELKHART — Elkhart City Council found two companies noncompliant with the terms of their tax abatements and indicated a labor shortage may be somewhat to blame.
Council members voted Monday to preliminarily find Genesis Products Inc. not in compliance with the terms of a three-year agreement granted in 2013, after the company reported that it fell short of its projections for new jobs and investments in manufacturing equipment. They also voted May 15 to find that Zeeland Lumber and Supply Co. did not meet the terms of a three-year tax phase-in given in 2013, after it reported falling short on new jobs and wages.
Representatives of both companies will address the council at a special meeting June 12 at 6 p.m., when a final determination will be made. State law requires a company to be within 95 percent of its projections to be found compliant and its tax abatement allowed to continue.
Exceptions are typically made if the shortfall can be shown to be due to circumstances outside the company's control, despite its best efforts. Council members noted Monday that a labor shortage in Elkhart County is making it difficult for many companies to find workers.
"If they promise us workers and then ship jobs off to China, that's different," Council President Brian Dickerson said.
Zeeland, which was given an abatement to expand its roof truss and wall panel business in Elkhart, reported that it retained all eight existing jobs but only added 39 of an anticipated 72 new jobs. Its total wages reached $904,095, only 36 percent of a $2.48 million projection.
Rob Groothuis, Zeeland Lumber's chief financial officer, told council members during a special meeting Tuesday that salaries lagged because the company didn't add as many supervisor positions as it projected it would.