GOSHEN -- County officials sent a proposed baked-goods plant back to the kitchen Saturday to cook up an incentive other than a tax abatement for the $48 million project.
The Elkhart County Council shelved until next month a tax-break request for George Weston Bakeries Inc. to build a plant north of Elkhart, but essentially told the Pennsylvania-based company that it would not get approval for county government's first-ever abatement.
Instead, the council asked the company to work with the Economic Development Corp. of Elkhart County to explore other ways to save money, and then return in December with a new proposal.
After the meeting, a representative of Allen Foods Inc., the Weston affiliate applying for the abatement, said the company would do so.
"We're disappointed that it (the abatement) isn't available, but clearly there are a lot of good things in Elkhart and we have to balance that," said Bob Sanders, vice president of Midwest market operations.
Earlier this week, an Allen Foods spokesman told The Truth that the company had not decided whether to build a plant in Remington Industrial Park, along C.R. 6, but called the proposed abatement "critical" to the project.
Saturday, Sanders declined to comment on how not getting the tax break might affect plans for the project.
Weston, maker of such brands as Entenmann's baked goods, Boboli pizza crust and Thomas' English Muffins, estimates it could save up to $2.8 million in property taxes over the course of a 10-year abatement where the company's taxes would gradually increase over time. The company would pay about $2.4 million in taxes during that time and create 100 jobs, according to projections.
It is the biggest project to seek an abatement from the county and the first to make it as far as the council floor. Earlier this year, an Elkhart County manufacturer, sensing its request was doomed, pulled an abatement application before elected officials had considered it.
For more than a week, county officials have been saying that they would certainly like the 30-acre Weston project to settle in the proposed Osolo Township site, but they do not have a policy for objectively evaluating abatement requests. Some have worried that granting an abatement would open a door that many companies would rush to walk through.
"I just hesitate to be the one to open Pandora's box," said Councilman Jim Hartman.
Council President John Letherman said that if the county started giving abatements, it would compete with business recruitment efforts by cities such as Elkhart and Goshen, which already use the breaks as incentives. Letherman suggested several alternatives to an abatement, among them:
* seeking county aid to pay for roads, utilities and other infrastructure for the project
* creating a county-designated Tax Incremental Financing district in which utilities, infrastructure and other on-site improvements would be paid for by new taxes the company generates
* and seeking economic development incentives from state government
"You do represent diversification, and that's good," Letherman told Allen Foods representatives, referring to the variety their factory would add to the county's RV-laden manufacturing base.
"We do not want to be thought of by you as being non-responsive," Letherman said. "We don't want to change the rules, but we want to help you."
County officials were further reluctant to approve the abatement because they fear the company's tax savings would be partially negated by expensive fees for the out-of-city-limits project to be connected to municipal utilities.
Mayor Dave Miller has said he will look into whether the fees can be reduced or waived, though such action would need city council approval.