KENDALLVILLE — Kendallville won’t hold existing businesses looking for a tax break to job creation targets or minimum wage rates, if its newly proposed guidelines go into effect.
New businesses will still have to create some new jobs in order to qualify, but the proposal presented to the Economic Development Advisory Commission stripped even more requirements from the metrics than currently exist.
The city has been working on rewriting its guidelines for tax abatements for months now, working to update its rules last approved in late 2018.
During the last rewrite five years ago, Kendallville officials tweaked investment targets as well as wage requirements for firms, but had stripped out job creation numbers due to an ongoing struggle for employers to find, attract and retain labor.
Now, despite a lengthy debate in March about at what level to set a new minimum wage requirement, the draft presented Monday also stripped out that requirement, leaving investment dollars as the sole determining factor for most projects.
Kendallville City Council President Jim Dazey, who had been working in committee with EDAC members over the last few months to hash out a new schedule, read through the latest proposal.
What’s new besides lowering the requirements for the abatements was that the city could break out three different sets of guidelines for new and existing industrial personal property as well as a separate schedule for real property improvements.
Those guidelines are as follows:
Personal property for new industry
• Three-year abatement: Minimum investment, $100,000; must create at least five jobs
• Five-year: Minimum investment, $500,000; must create at least 10 jobs
• Seven-year: Minimum investment, $2.5 million; must create at least 15 jobs
• 10-year: Minimum investment, $10 million; must create at least 20 new jobs
Personal property for existing industry
• Three-year: Minimum investment, $100,000
• Five-year: Minimum investment, $500,000
• Seven-year: Minimum investment, $2.5 million
• 10-year: Minimum investment, $10 million
Real property, both new and existing industrial or eligible commercial
• One/two-year: Minimum investment, $1,000
• Three-year: Minimum investment: $300,000
• Five-year: Minimum investment: $700,000
• Seven-year: Minimum investment: $1.3 million
• 10-year: Minimum investment: $3 million
Those guidelines serve as minimum for consideration, although the resolution also notes that the EDAC or council could consider individual projects on their own merits and deviate outside those lines, if warranted.
Local banker Larry Doyle, who last month was among advocates for the city to impose a $22 per hour minimum wage for businesses seeking an abatement, asked whether he had missed those numbers during the readout or if they were not included.
Dazey confirmed that the council intended to drop the wage requirement.
According to wage data from Be Noble Inc., the Noble County Economic Development Corp., most Noble County industries trying to hire have low-end starting wages of about $17-$18 at median. Some companies are hiring in lower than that, while higher-paid starting positions are starting upward of $20 per hour.
“That is what our committee has come up with talking with other members of the council. I do believe it is the feeling of the council that we are here to benefit people attempting to grow in our city, not just to make it so stringent that someone cannot apply, but are flexible enough to work with everyone,” Dazey said.
As the EDAC board had already forwarded its recommendation to the city council back in late 2022, the commission took Monday’s update from Dazey as information as to the council’s wishes and did not vote to recommend or adopt the new proposal.
The city council ultimately has the final say in adoption of the guidelines, which could be considering at an upcoming meeting. The council’s next regularly scheduled meeting would normally be May 2, but it may be postponed due to that date being Election Day for the spring municipal primary.
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