State offers Getrag $12.6 million in incentives for $530 million plant and 1,200 jobs

TIPTON - The state of Indiana is offering German transmission manufacturer Getrag $12.65 million in incentives to locate a new plant in Tipton County.

Gov. Mitch Daniels said the company will receive $8.75 million in performance-based tax credits and $500,000 in training grants from the Indiana Economic Development Corp.

Daniels said an additional $3.4 million will be provided by the Indiana Department of Transportation (INDOT) for improvements to Ind. 28 and Road 550 East, which is located on the eastern border of the property for truck traffic.

The state is providing an average of $10,542 in incentives for each of the 1,200 jobs being created.

"Good things are worth waiting for," Daniels said of the long anticipated announcement by Getrag and Chrysler of the Tipton County site selection.

He called the state incentives a great value.

"This is $9 million in (income) taxes that would never have been paid if the plant went to another state," Daniels said.

The INDOT money is coming through the Major Moves initiative which was the result of leasing the Indiana Toll Road to a private company in 2006.

"We had the funds available when a company needed improvements to a state highway," he said, "or an interstate interchange."

Daniels said $10,000 per job is a great bargain for the state.

"I'll take those jobs anytime," he said.

Tipton County will repay Getrag for the purchase of 145 acres of land near the intersection of U.S. 31 and Ind. 28 - land that was acquired last month at a cost of $3.4 million.

The county is expected to designate the area a Tax Increment Finance District and use the property taxes paid by Getrag to pay off the bonds.

Tipton County is also paying for the creation of a separate well field to provide water to the Getrag plant and for a wastewater treatment facility on land adjacent to the plant.

Those facilities will be financed through the TIF District.

The TIF bonds are supposed to capture the increased tax payments on the property for 25 years. Local taxing districts like the county, schools and township will receive the same amount in property taxes as was being paid before the land was developed.

The company will also be eligible for a tax abatement on equipment in the building. That tax abatement will last for 10 years. The company will pay no taxes the first year, 10 percent the second year and add 10 percent each of the following years until it reaches 100 percent.

Tipton County Commissioner Tom Dolezal said the company qualifies for a tax abatement on the equipment, but that is a decision the Tipton County Council will have to approve.

Dolezal said the well field and wastewater treatment plant will be jointly owned by the county and city of Tipton and financed as part of the TIF bonds.

"There have been discussions about building the wastewater treatment plant with excess capacity to help the surrounding communities," he said. "That is not in the current plans."

Dolezal hopes the TIF bonds could be paid off in less than 25 years so that the county and schools could receive increased property tax revenues.

"We're still working on the details," he said.