Chiyoda expansion to mean 200 more jobs at Greencastle plant

Wednesday, May 13, 2015

A major expansion of the Chiyoda auto parts plant on Greencastle's East Side crept another step closer to reality Tuesday night while unveiling numbers that brought smiles to city officials' faces.

Chiyoda, which came before the City Council in April for approval of a resolution declaring the 11 acres it is purchasing adjacent to its 28-acre site at 2200 E. State Road 240 (formerly the Happico plant) an economic revitalization area eligible for tax abatement, returned Tuesday night for a public hearing to that effect and a subsequent reaffirming resolution. It should be the next-to-last step in the abatement process, officials said.

Chiyoda, represented before the Council by Greencastle/Putnam County Development Center Director Bill Dory, will make a return visit at a later date concerning tax abatement for the new paint line and injection-molding equipment to be housed in the planned 90,000-square-foot addition.

Construction is due to start within 30 days, Dory said, in order for Chiyoda "to meet the demands of its customers."

The $15 million expansion project, on land being purchased from the Development Center, will set up the building for further expansion, he said, calling it "future flexibility" that wasn't available at the existing facility.

Explaining that Chiyoda currently employs 170 people and 184 full-time temporary workers through an employment service, Dory said the expansion will bring 200 new employees to the Chiyoda payroll at an estimated $11-$13 per hour.

That added $4.4 million payroll, figured Councilman Mark Hammer -- a CPA by trade -- will generate $660,000 in local income tax for the county.

The new Chiyoda positions are expected to come on line in September 2016 with the completion of construction.

Chiyoda currently has no tax abatement in place onits real estate. The sliding scale of the abatement on real estate would be 100 percent abated in year one down to five percent in year 10 and zero in year 11 and thereafter.

Looking at those figures, Councilman Hammer noted that over the phased-in 10-year period, Chiyoda still will "pay roughly 50 percent of its property tax payments." That translates into property taxes of $1.2 million paid during the period and roughly $1.2 million abated during the same timeframe.

"We're talking about a major employer doubling its workforce," City Council President Adam Cohen said excitedly. "This is a major announcement."

Chiyoda acquired the former Happico plant in May 2005, and it is one of three U.S. facilities owned by the company.

In May 2013, Chiyoda announced a $7 million investment in new equipment at the Greencastle plant, adding seven injection-molding machines and upgrading its paint line as part of a project that increased the workforce by 25 at the 293,000-square-foot facility.

So with another expansion on the drawing board just two years later, Chiyoda "has rebuilt the business over the last nine years," Dory praised.

"They continue to work very hard to grow the business and provide additional opportunities here," he added.

Figures filed in support of the tax abatement request show that two-thirds of all Chiyoda employees reside in Putnam County, although in reality that number may even be larger, Dory said, since all Coatesville addresses are listed as Hendricks County even though some are really in Putnam (Heritage Lake, for example is often listed as Coatesville).

Other workers come from as far away as Clinton County and Vigo County to work at Chiyoda with 13 percent of its workforce being from adjacent Clay County, documents noted.

Since purchasing the property from Happico, Chiyoda has paid more than $1.4 million in real estate and personal property taxes.

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