Two CompaniesInvestments Net Tax Break’
The Journal Gazette
Two CompaniesInvestments Net Tax Break
Commissioners Approve Incentives
Saturday, August 18, 2012, 3:00 am
Benjamin Lanka | The Journal Gazette
FORT WAYNE – Allen County will reimburse thousands of dollars in income tax revenue to two companies as an incentive for local investment.
The county commissioners Friday unanimously approved economic development grants with SDI/La Farga and R3 Composites as enticements for multimillion-dollar developments being made by the companies.
SDI/LaFarga is expected to invest $36 million in its facility at 1460 S. Ryan Road east of New Haven. For that development – plus the addition of 35 jobs – Allen County will pay the joint effort of steelmaker Steel Dynamics Inc. and copper maker La Farga $102,695 over seven years. Under the plan, it will be paid $5,726 in the first year and $17,352 in the final year.
R3 Composites will invest $4 million in new equipment at its facility at 14123 Roth Road in Grabill and add 400 jobs. For that investment, the company will be paid up to $332,332 over five years, which will be split between the county and Fort Wayne. The benefit will grow from $13,723 in the first year to $101,046 in the final year. The company makes custom molds for bathroom showers and tubs, swimming pools and shipping containers.
The city will finance 75 percent of the benefit, and the county will cover the remaining quarter.
The incentive program was created to help lure investments that included high-paying jobs to help slow the wage decline facing the area. In effect, the program offers companies a reimbursement of the local income taxes from the jobs their project is creating or retaining. For new jobs, the company is reimbursed more than for retained jobs.
The incentive paid is tied directly to how much payroll the company adds. Should companies not hire as many people as they promised, for example, they are given less of an incentive.
To be eligible for the program, a company must be considering a project in the area that will create or retain jobs. Additionally, that project must be competitive, meaning the company has other places in the nation to invest the money.
On joint city-county projects, the city picks up the larger share of the costs because it receives the larger share of income tax revenues.
The commissioners had limited discussion before approving the incentives, which must be approved by the Allen County Council. The City Council must also approve the R3 Composites agreement.