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Committee recommends abatement for Kraft Heinz

March 14th, 2017

By Barry Rochford | KPC News - News Sun

The city’s Economic Development Advisory Committee recommended at a special meeting Monday that the City Council grant Kraft Heinz Co. a 10-year, sliding-scale tax abatement for more than $5 million in new machinery and equipment.

The investment includes a new boiler for the company’s plant at 151 W. Ohio St. and new equipment to help streamline the facility’s marshmallow packaging area, according to an abatement application filed with the city of Kendallville.

Installation of the boiler could begin later this month or early next month and be completed by August. Ohio Street would be closed to accommodate the installation of the new boiler, but it would remain open for emergency vehicles.

The new boiler and packaging equipment aren’t expected to result in any new jobs. The plant, which produces marshmallows, marshmallow creme, marshmallow bits, caramel and caramel sauce, presently has 330 employees and a combined total annual payroll of $16.9 million.

Plant manager Dave Lund said the new boiler and packaging equipment will help the Kendallville facility remain competitive.

“This ensures our success in the future to be the lowest-cost producer,” he told EDAC members during their meeting Monday afternoon.

He added the investment could position the Kendallville plant for additional production, but there are no guarantees that will happen.

Mayor Suzanne Handshoe said the tax abatement was warranted because of Kraft Heinz’s importance to Kendallville’s economy.

“We applaud this effort to keep them viable, to keep them going, to keep their employees,” she said.

The 10-year, sliding-scale tax abatement on $5.1 million in personal property would save Kraft Heinz more than $299,000 over the life of the abatement. The new machinery and equipment would receive a full 100 percent abatement in the first year, then the abatement would be reduced by 10 percent in each subsequent year.

The Kendallville City Council will consider the abatement request and the EDAC’s recommendation at its March 21 meeting. The next regular meeting of the EDAC is March 27.