KENDALLVILLE — If you build it, they will come.

That’s the basic idea behind construction of an industrial “shell” building. A Whitley County firm is eyeing some property in Kendallville to build one at a cost of $2.2 million.

Shell buildings, also sometimes known as “spec buildings” since they’re built on speculation of a future buyer, are basic structures built to expected industry demand in terms of size, ceiling height and utilities but are not built out on the inside until a firm buys it and determines its specific needs and layout.

Think of it like putting up the four walls and roof of a house, but not laying out living rooms, kitchens, bathrooms and bedrooms until after someone buys it and tells you how to customize the inside.

Whitley Manufacturing out of South Whitley is seeking a tax abatement from the city of Kendallville for construction of a $2,241,090 building on Weston Avenue.

The 8.47 acre property is located at the northwest corner of Weston Avenue and Ohio Street, next to the East Noble bus garage and across the road from Reliable Tool and Machine.

The property is currently owned by Wolfpack Real Estate LLC.

Whitley Manufacturing is seeking to build a 75,000-square-foot shell building, expandable to 100,000 square feet, with 30-foot high ceilings “to meet the modern demands of expanding industries,” a memo from Noble County Development Corp. Executive Director Gary Gatman states. “When a tenant is secured for the new building, Whitley Manufacturing will finish the building to the specifications of the new tenant, which will likely result in an additional investment of $1 million or more.

Gatman noted that about 90% of site selector inquiries in 2019 and 83% in 2020 went unfilled because Noble County had no buildings with the size and ceiling heights sought by modern businesses looking to relocate or expand, Gatman said.

“When built, this building will immediately become one of the best available sites in all of northeast Indiana and will place Kendallville and Noble County on the radar of expanding companies and site selectors across the country,” Gatman wrote.

Whitley Manufacturing has built two shell buildings previously in Whitley County, both of which are filled with manufacturers.

The tax abatement request is for a modified 10-year tax break, although the construction project currently falls well short of the city’s guidelines for granting decade-long abatements.

Current guidelines state that companies must make an investment of more than $5 million and have average wages upward of $20 per hour to qualify for a 10-year tax break.

The initial construction would currently even fall short of guidelines for a seven-year tax break, which requires an investment of at least $2.5 million and average wages over $17.50 per hour.

Although it’s impossible to say what kind of firm might buy and occupy the building, Gatman estimated a building of that size could attract a firm of at least 75 new jobs paying $23 per hour or more.

If a special 10-year tax break were to be approved, the company would save more than half in taxes over 10 years, saving $353,423 while paying $239,569.

The Kendallville Economic Development Advisory Committee will consider the tax abatement request at its next meeting on Monday.

The committee could send a recommendation on an abatement to the Kendallville City Council, who would have final say in approving or rejecting the terms of the tax break.
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