By JOSEPH S. PETE, Daily Journal of Johnson County staff writer
Faced with the prospect that a bottled water company would take its new jobs to another city, Greenwood officials granted $1.7 million in incentives to Nestle Waters North America in a matter of hours, when the review typically takes four to six months.
Nestle was looking at Whitestown and other sites but picked Greenwood because of its proximity to several interstates, skilled work force, available water supply and the tax incentives it offered.
After a months-long site search, Nestle wants to start bottling purified water by as early as January to meet with projected demand in the Midwest, supply chain director Peter Rittenhouse said.
Nestle needed the guarantee of tax benefits so it could meet its deadline to start producing a million bottles a day of Nestle Pure Life and Pure Life Splash, Rittenhouse said.
Greenwood was selected from about 50 potential sites in Indiana and adjoining states, most of which also offered tax incentives.
Tax abatements, which are offered to lure employers, gradually phase in a company's taxes on property over 10 years.
Nestle will invest more than $32 million in the bottling plant at Precedent South Business Park east of Interstate 65, just south of Main Street.
The plant will create 64 jobs at an average wage of $16.22 an hour plus benefits, more than the county's average wage of $13.95 an hour. Hiring is expected to begin in mid-October.
Nestle Waters, a subsidiary of the Swiss packaged goods titan best known for chocolate bars, will lease 215,000 square feet of a 294,000-square-foot building under construction.
Nestle hopes to serve a growing demand for its Pure Life products, which have been selling well at Wal-Mart, Rittenhouse said. The company also bottles spring water for brands such as Poland Spring.
After scouring the Midwest, Nestle had been looking at several sites in the Indianapolis metropolitan area, particularly to the city's northwest to be able to better serve the large market in Chicago, Rittenhouse said. Whitestown was among the finalists.
Tax abatements were needed to keep Greenwood in the running for the plant, Mayor Charles Henderson said. At one point, Henderson had to offer to extend the city's abatement on equipment from five years to 10 years so Greenwood wouldn't be disqualified.
Nestle will pay $1.2 million in taxes over the next 10 years, revenue the city might not receive if the building stayed empty.
Council members such as Bruce Armstrong, who backed the Nestle abatement, have criticized the city's use of tax abatements and other breaks in the past when they were offered in exchange for lower-paying jobs, including for retailers.
Most cities and towns offer tax abatements to businesses, so they're needed to attract jobs, Johnson County Development Corp. executive director Cheryl Morphew said.
The Nestle plant is in Greenwood's eastside tax increment financing district, where the city captures tax revenue to use to pay for infrastructure improvements in the area.
Only about $260,000 of Nestle's reduced tax bill will go into projects the tax district is financing, such as the widening of Graham Road next year.
About $1.5 million of Nestle's tax abatement applies to factory equipment, and the eastside tax district only captures property taxes on land and buildings, redevelopment commission attorney Stephen Watson said. If there were no abatement, that money would go to the city, the library and the Clark-Pleasant school district.
Indiana also offered Nestle benefits to locate in Greenwood. The company will receive a total of $850,000 in property tax credits for investing in the plant and bringing jobs, plus $50,000 in grants to train employees to observe federal food safety guidelines, Indiana Economic Development Corp. spokesman Mitch Frazier said.
"The company is making an even bigger commitment to Indiana; the third in less than 14 months," Gov. Mitch Daniels said in a news release. "The company has had a resounding response from Hoosiers who want to work at the new Anderson plant, and now, the company will be offering even more employment opportunities."
Nestle plans to hire 300 people in Anderson to produce and distribute Nestle Nesquick Ready-to-Drink and Nestle Coffee-Mate products. The company will create 68 jobs in Fort Wayne at a new Dreyer's Grand Ice Cream plant.
Bottles will be made, labeled and filled with water from Indiana-American Water Co., which will transport water directly to the bottling plant through an underground pipeline. Nestle will purify the water in a multistep process that includes reverse-osmosis and blend it with minerals for flavor.
Ron Ballard, the Johnson County superintendent of Indiana-American Water Co., said the utility would easily be able to serve the plant while meeting residents' water needs, even during droughts. Indiana-American has had extra capacity of at least 3 million gallons during stretches of record usage this summer.
At most, Nestle will use 500,000 to 600,000 gallons a day, Ballard said.
Nestle hopes to install its production equipment in the plant in October. Production of the Pure Life brand may begin before the facility can produce Pure Life Splash, Rittenhouse said.
The city council unanimously approved the tax abatements Monday, after suspending rules that require three hearings, because of the Nestle's planned start date. A few members were drinking Nestle's Poland Spring brand when they heard the company's presentation, which Rittenhouse hastened to point out.
With $9.6 billion in global sales last year, Nestle leads the bottled water industry. Water edged out beer as the second most popular packaged beverage in 2004, and it's projected to top soda in the next few years, Rittenhouse said.