How a fast-growing, clean-tech company is redeveloping a blighted area in Wabash
By Lauren Caggiano | Input Fort Wayne
A Wabash company is investing in itself and the city at the same time, thanks to an economic development program made available through changes to federal tax law enacted with passage of the Tax Cuts and Jobs Act of 2017.
In 2018, Gov. Eric Holcomb announced that 156 census tracts statewide were certified and designated as Opportunity Zones—a designation that means tax incentives will be available to those who invest in certain projects in those areas. Taking advantage of this program, a startup called 10X Engineered Materials is turning a once-blighted area in Wabash into a viable hub of activity. Better yet, its innovative business model is rooted in sustainable practices.
“We’re going to be taking in byproduct from the installation industry that would otherwise go in a landfill, and we'll be converting it into various products that have commercial value,” says Jake Vaillancourt, an Officer at 10X. “The main product is an abrasive that can be used in water jet cutting and abrasive blasting.”
Once complete, 10X is expected to divert about 36,000 cubic yards of waste produced by area manufacturers away from the landfill, reports say. But it isn’t in operation yet because the property is still being redeveloped. Its building was a warehouse that sat empty for several years and fell into disrepair.
Vaillancourt is bullish on the future company and the city of Wabash, in general, as evidenced by the company's significant investment in the area.
To date, 10X Engineered Materials has spent more than $1 million refurbishing its building at 1162 Manchester Ave. It repainted the entire interior, redid all the industrial space, and added a new HVAC unit as well as all-new lighting. It's also in the process of adding an additional 14,000-square-feet of space to the back.
"We're expanding the size of the building to fit our needs,” Vaillancourt says. He expects to be in production this summer.
In the meantime, he is excited to make an impact on the Wabash community that has been lagging economically. In 2007, GDX Automotive ceased operations in the area, costing it hundreds of jobs.
Vaillancourt hopes that 10X will be a key part of the solution while also enjoying the perks that come with being located in the Opportunity Zone. He explains businesses in Opportunity Zones enjoy various tax advantages, like either reduced taxes, or no capital gains tax charged on their investment.
“So it's sort of like an IRA,” he says. "There are some similarities where you're investing in an area that normally wouldn't be invested in, and the government is rewarding you for doing so. For our company, it meant we were able to raise the amount of capital we needed for less equity. So we got a better deal. Employees will get a little bit better deal. Actually, all stakeholders got a better deal because of the opportunity.”
Keith Gillenwater, President and CEO of Grow Wabash County, agrees.
“At the most basic level on a square-footage basis, they are having a much larger impact on our community than what was essentially a large building employing just a small handful of people,” he says.
The community will see a return in higher wages, income, and property tax revenue as well as other benefits, he explains.
According to a July 2018 statement, 10X Engineered Materials plans to hire up to 26 full-time employees, including a plant manager, skilled maintenance, and manufacturing associates, administrators, and salespeople.
Click here to learn more about Opportunity Zones, courtesy of the Federal Reserve Bank of Atlanta.
U.S. Department of the Treasury recently issued its second set of proposed regulations related to the new Opportunity Zones tax incentive. Check those out by clicking here.