Industry gets tax phase-in
By Mark Murdock | KPC News - The Star
An Auburn industry planning to add 35 jobs received final approval for a tax phase-in Monday night.
The Auburn Common Council passed a resolution on second and final reading granting a five-year phase-in to Shiloh Die Cast Midwest LLC for the purchase of equipment at a cost of $2.95 million with an assessed property value of $1.77 million.
The equipment is exempt from all taxes in the first year of the phase-in and from 95 percent in the second year. The exemption drops to 80, 60 and 50 percent in the final three years, respectively.
Shiloh, which took over the former Contech facilities at 1200 Power Drive in 2013, also received an abatement in 2014 for $4.2 million in equipment that expires at the end of this year. The company was found to be in compliance last year.
Councilman Mike Walter moved to amend the resolution to hold Shiloh accountable to the terms of the abatement.
“My objection is defining what we are expecting of a tax abatement applicant,” Walter said.
Walter said the 35 jobs should be guaranteed to be full-time positions. An employee is “someone employed directly by the company for at least 1,750 hours per year, excluding time off for authorized leave and vacations, and receiving health insurance, pension benefits and paid vacation,” his amendment stated.
Another condition in the amendment was the company maintain 90 percent of the wages and/or the number of employees stated in the abatement. The city would have “clawback” power and could require the company “pay back the tax savings realized proportional to the extent of the deficiency in levels of wages and/or number of employees,” Walter proposed.
Counsel for Shiloh, Steve Snyder of Snyder Morgan Federoff and Kuchmay LLP of Syracuse, said at an earlier meeting the average annual pay for the new employees would be $36,920.
Walter’s amendment also said the abatement constitutes a contract between the city and the company, effective upon the company’s acceptance of the benefits.
“It probably doesn’t need to be said, but it would be helpful to say, ‘This is a contract,’” Walter said.
Walter’s motion died for lack of a second.
Walter then called for a vote on a waiver granted to Shiloh in the resolution, since some of the equipment is on site.
Snyder said Monday and at earlier meetings that some of the equipment is already in place at Shiloh, some is on the property, and some has been ordered but has not yet arrived.
“The waiver is that the equipment has been placed on the ground prior to the resolution,” Auburn City Attorney Erik Weber said. He said the installation prior to the filing of a statement of benefits for the abatement required the Council to consider a waiver under Indiana Code.
Councilman Kevin Webb, part of the Council’s abatement committee, said he had inspected the premesis, and said some of the equipment is not being used.
“They need to rebuild the equipment,” Webb said. “You can’t get it back functioning and hire the employees if you don’t spend the money to fix the equipment. It all encompasses what needs to be done to get more employees back into your facility.”
The approval of the waiver and the resolution both passed 6-1, with Walter voting against them.