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Common council hears that CSP in running for two new lines

February 11th, 2016


News Coverage:

February 10, 2016

Common council hears that CSP in running for two new lines

Cindy Klepper


A Huntington manufacturing facility is in the running to gain two new production lines that would see the plant nearly double in size and, its manager says, solidify its position in the community for years to come.

On Tuesday, Feb. 9, the Huntington Common Council took steps that will eventually allow it to provide some financial assistance to help make that become reality.

The council, as it does every two years, passed a resolution preliminarily designating specific areas in Huntington — generally areas zoned for business and industry — as economic revitalization areas (ERAs). Following a public hearing on Feb. 23, the council will be asked to give final approval to the ERAs — paving the way to continue to grant tax abatements for growing companies.

One of those companies will likely be Continental Structural Plastics, which makes body panels for Corvettes. The plant's manager, Jerry Reid, and the executive director of Huntington County Economic Development, Mark Wickersham, came before the council to explain as much of the company's plans as they could.

CSP could be awarded “two significant product lines” that would launch in 2019, Reid said. The first line would be body panels for the new generation of Corvettes. The body panels now being made in Huntington are for the current C7 Corvette; Reid says the plant is working to win the right to manufacture body panels for the eighth generation of the sports car.

The current model would continue to be manufactured for two years after production of the new model begins, Reid said, necessitating the addition of 110,000 to 130,000 square feet to the current 165,000 square feet of manufacturing space.

“We want to expand the facility so we can make both at the same time,” he said.

Once production of the C7 body panels ends, he said, that space would be used for the second new line — a line Reid said is still secret, but would be a new introduction to the market. The entire project would increase CSP's work force from 323 to about 480, he said. The jobs pay in the range of $15 to $16 an hour, he said.

“It's kind of a game changer,” Reid said, adding that it would provide stability for the Huntington plant into the future. “We will be looked at as one of the flagships in the company.”

The company would want to start construction of the addition as soon as possible, Reid said, probably in late spring or early summer. But CSP wouldn't generate any revenue from that investment for several years, he said.

That's where the tax abatement — which is made possible by the renewal of designated economic revitalization areas — comes into play, Wickersham explained.

In the past, tax abatements were traditionally granted for 10 years. Property taxes on a company's new buildings or equipment were phased in over the 10 years, beginning at zero and going up incrementally until the full assessment was paid at the end of the decade. Throughout the period, the company continues to pay the full amount of property taxes on the buildings and equipment in place before the expansion.

CSP is currently paying about $78,000 a year in property taxes, Reid said; with the addition of CEDIT and LOIT paid by employees, CSP generates about $155,000 a year in revenue for the city.
“That does not stop,” Wickersham said.

What would change, he said, is the way taxes on the new space and new equipment would be phased in. Under a new state statute, the city can grant a tax abatement with a phase-in schedule tailored to the project under consideration. For example, Wickersham said, the council could allow the company to pay no property taxes for the first five years, and then begin phasing in the taxes. Wickersham said CSP would benefit from a more aggressive abatement schedule.

Although CSP has not yet officially requested a tax abatement from the city, Wickersham said both the state of Indiana and Huntington County are offering incentives to convince the company's Auburn Hills, MI, headquarters to place the project in Huntington.

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