SELLERSBURG — The Sellersburg Town Council granted a 10-year tax abatement during its meeting Monday to a construction company looking to double its operations space.
The approval came only after council members questioned the potential consequences of tax abatements in the town and whether they should require more from developers in return for the break.
L5 Leasing LLC plans to build a 20,000-25,000-square-foot facility on about seven acres of vacant property in Sellersburg Industrial Park. The property will hold a second location for R A Libs, a concrete construction company with an existing building on Bringham Drive in Sellersburg.
The expansion is a $1.25 million investment that is expected to add five to 10 jobs, according to developer Mike Libs.
Libs chose to stay in Sellersburg, despite potential opportunities to receive abatements in other communities.
“We’re here existing in the community, so we certainly want to keep that relationship with the town,” Libs said.
A tax abatement is an agreement with a municipality or county that a company locating or expanding there won’t have to pay the full amount of taxes for a certain period of time. Tax abatements are common economic development tools meant to entice developers to invest in cities and towns, though critics say it unfairly shifts the tax burden and creates strained budgets for schools and other taxing units.
Sellersburg Town Councilwoman Martina Webster, the only council member who voted against the tax break Monday, said she wasn't comfortable taking tax revenue "out of the pot" following the failed West Clark Community Schools referendum.
Every tax dollar a business doesn't contribute is another dollar a homeowner must pay, she said.
“I really have a hard time doing an abatement right now in the current climate,” Webster said.
She also pointed out standard tax abatements don’t prohibit a company from leaving the town after the term is over, or else asking for another abatement.
Councilman Brad Amos took issue with the owner of the former Nolan Fieldhouse selling the property in Sellersburg Industrial Park to a religious nonprofit organization, which by law pays no property taxes.
“I’ve been waiting on our next tax abatement to bring this up because it was just my concern …” Amos said.
He initially proposed requiring a company that receives an abatement to pay a fee if they sell to a nonprofit organization, but then said he would rather research the issue more to be prepared for the next abatement request.
“[We have a] great valuable area with a great valuable piece of property, and now we’re getting zero [if they sell to nonprofits],” Amos said.
Town Council attorney Jake Elder said the council could require companies to pay back all taxes that were abated if they sell to a nonprofit organization within a specified time frame. The council could also change the tax abatement time period and amount.
Stan Richards, executive vice president of Ballew Gift Trust that owns the industrial park, pointed out that stipulating more requirements with an abatement may turn businesses away to other communities with more attractive offers.
“What’s that going to do to the town for growth?” Richards asked.
Libs, who told the council he hopes to continue to expand again in the future, said he is pleased council members decided to grant him the abatement.
“It was certainly a reasonable conversation, the points they brought up,” he said.