Council OKs Kraft Heinz abatement

March 22nd, 2017

Street will be closed during boiler, equipment installation

By Dennis Nartker | KPC News - The News Sun

Kraft Heinz Co. is installing new equipment and a boiler system at its Kendallville plant that will require the closing of a section of Ohio Street for about three months.

The City Council Tuesday night approved a resolution granting the company 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 facility at 151 W. Ohio St. and new equipment to streamline the marshmallow packaging area, according to an abatement recommendation from the city’s Economic Development Advisory Committee that reviewed the abatement application.

Ohio Street will be closed from South Main Street to approximately two-fifths of a mile west during the boiler and equipment installation, which could begin later this month or early next month and be completed by August.

No new jobs will be created in the facility that employees about 330 workers with a total payroll of $16.9 million. Kraft Heinz produces marshmallows, marshmallow bits, caramel and caramel sauce at the plant on the city’s south side.

The company will save more than $299,000 in property taxes over the 10-year abatement.

In a related tax abatement matter, the City Council approved Resolution 1018, amending an existing resolution explaining tax abatement guidelines for commercial properties within an economic development target area, or EDTA.

Five years ago, the council established part of the city as an EDTA, making commercial properties within the area eligible for tax abatements as allowed by Indiana code.

The city can designate a maximum of 15 percent of its land as an EDTA. The city has designated about 13 percent, according to Mayor Suzanne Handshoe.

Resolution 1018 renews the EDTA and tax abatement eligibility for commercial properties within the EDTA. No changes were made to the guidelines.

Abatement guidelines for commercial properties are: one or two years minimum to qualify with a $1,000 to $200,000 investment; three years minimum to qualify with a $200,000 to $500,000 investment; five years minimum to qualify with a $500,000 to $1 million investment; and seven years to qualify with a $1,000,001 or more investment.