Tipton County looking at legal options on Getrag plant cancellation

TIPTON - Tipton County officials may consider legal action in response to the cancellation of the $530 million Getrag project.

The project was set to employ 1,400 people producing dual-clutch transmissions for Chrysler. The state-of-the-art building was more than 80 percent complete when the project was called off in November.

While the county is not responsible for the 145-acre site or building, officials did purchase a $3.1 million bond for the utilities that would service the site.

"We have a utility plant - wastewater and water - that is probably a quarter of the size of the plant that serves the entire [city] of Tipton, and we have no customer," said Commissioner Jane Harper.

The utility facility intended to bring in revenue from the Getrag plant, which now sits empty.

"That should tell people, 'Yes, we are hurting,'" Harper said, adding officials are "considering their legal options."

It's not all doom and gloom for the Getrag site, she said.

Eventually, another business will utilize the empty plant and Tipton will be ahead because infrastructure is in place, she said.

Harper said the company's failure to pay the $11 million bond for upkeep and improvements on the infrastructure will not adversely affect the county.

Funds for repayment were supposed to come from the taxes captured in the Tax Increment Financing District created by the county's redevelopment commission.

Tipton County Auditor Suzanne Alexander recently paid $58,031 in the first of five installments on the bond. The total will be $367,531.

None of these installments will come out of the budget, she said. The initial installments were already part of the bond issued by Harris Bank.

"We borrowed money to pay for the bond issue for the first five installments," she said.

Initially Getrag officials said they would pay their portion of the bonds but later recanted. Their funding and legal options are tied up in a bankruptcy court in Michigan, with the opening statements set for Jan. 27.

Alexander said Getrag's first payment of $195,937 is due Feb. 1.

She is concerned about the payments the county would need to make after February 2011. The bonds were supposed to be paid by property taxes captured in the TIF district. Without anyone paying property taxes, the county will need funding from other avenues.

"We're hoping the operations get started out there, all the problems with finding a partner get resolved," she said. "You kind of have to hang on that hope. Otherwise, this is not a pretty thing. We don't have any other way of coming up with that kind of money."