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Bolhoff OK’d for tax break

August 1st, 2018

By Steve Garbacz | KPC Media - The News Sun

A Kendallville manufacturer received a positive recommendation to receive a seven-year tax break for $3.15 million in new equipment.

One difference compared to the normal tax abatement, however, is that the equipment has already arrived and been installed at the local plant.

Bolhoff Inc., 2705 Marion Drive, Kendallville, presented a tax abatement request for eight new pieces of equipment. General Manager Chris Lautzenhiser said the machines were ordered about 18 months ago, since they have to be imported from Italy. They machinery arrived and was in the plant earlier this summer.

Because the equipment has already been hooked up, Bolhoff will need to get a waiver of non-compliance from the Kendallville City Council in order to get the tax savings.

Lautzenhiser explained there are two kinds of machines the company has added. Bolhoff, which manufacturers parts for the auto industry, has added four Carlo Salvi cold headers as well as one SACMA header machine, which are used to form metal products. The recent expansion also includes three tapping machines.

The expansion is allowing Kendallville to take over some production that’s currently happening overseas by Bolhoff locations in China and Brazil, Lautzenhiser said.

“It’s just bringing product we’re managing in Bolhoff China and Brazil into the U.S., because the customers are in the U.S.,” he said.

The company is planning to add nine jobs to work the new machines, with a starting wage of $22.50 per hour for the skilled machining jobs. Lautzenhiser also said the firm is currently running two shifts, but will soon be expanding to run three shifts per day.

Members of the Kendallville Economic Development Advisory Committee had several questions for Lautzenhiser while reviewing the company’s application due to some issues with the information.

Chief among the changes was about the project dates. Lautzenhiser listed with the start date as July 2016, because that’s when the order was placed, even though the machines didn’t arrive until this summer.

Mayor Suzanne Handshoe, board member Jerry Steinbarger and city councilman Frank Walkup all suggested the project date be changed to the date of installation instead to avoid any possible problems with the abatement getting approved at the county assessor’s office.

Board members also debated how long of a tax break to recommend for Bolhoff. Steinbarger initially suggested a seven-year might be appropriate, while Region 3A’s Matt Brinkman suggested they consider 10 years due to the size of the investment. Board member Larry Doyle went the opposite direction, wanting to look at five years.

Based on the taxes, the tax savings would range from $120,712 for a five-year up to $196,251 over the 10-year. In the 10-year schedule, Bolhoff would pay less tax — about $132,000 — than it would save via the abatement.

Ultimately board members settled on the seven-year. At that level, the city will collect $176,700 in taxes over the seven years, while Bolhoff will save $151,321.

The recommendation will go before the Kendallville City Council in August, with corrections made to the application.

Lautzenhiser hinted the city should expect to see more expansion soon. Bolhoff is in the process of bringing in another $300,000 piece of equipment, which it will seek another abatement for, and is in the process of trying to acquire a lot in the city’s industrial park adjacent to its plant.