Council recommends tax abatement for Ascena

Friday, November 27, 2015

A proposed $44.5 million expansion at the Ascena Retail Group's Greencastle facility won unanimous approval for tax abatement at a City Council special meeting this week.

The Council adopted Resolution 2016-19 following a public hearing on the Ascena request for tax abatement on a project that could add 60,000 to 100,000 square feet to the sprawling building at 1901 E. State Road 240 on the city's East Side.

Local approval comes as the Greencastle facility remains in competition with West Coast sites for an expansion project designed to accommodate growth in its e-commerce area coinciding with Ascena's recent acquisition of the Ann Taylor and Loft brands.

The expansion effort is also expected to add 30 additional jobs and help retain 308 other positions at the e-commerce facility of Ascena, which is considered a leading specialty retailer of apparel for women and tween girls.

Ascena Retail Group purchased the former F. B. Distro facility from Charming Shoppes in 2012, creating its Greencastle Fulfillment Center that initially has served five of Ascena's brands -- Dressbarn, Maurices, Justice, Lane Bryant and Catherines.

Fresh from expanding its Greencastle facility into an 800,000-square-foot e-commerce fulfillment center employing 350, Ascena is still in the midst of hiring the full complement of 242 employees linked to its previous expansion and abatement. It is estimated the new jobs would pay $16 an hour with full benefits.

Meanwhile, the proposed $44.5 million expansion includes $35 million in logistics equipment, a $5 million investment in real property and $4.5 million in information technology equipment.

Greencastle/Putnam County Development Center Executive Director and Mayor-elect Bill Dory noted that under proposed terms of the abatement, Ascena would still pay $628,000 in real estate taxes over the 10-year period with a tax savings of $615,000 if the expansion comes to Greencastle. The company would pay $1.4 million in personal property taxes with a projected tax savings of $2 million.

At the same time, the additional jobs are forecast to generate $174,000 in new income taxes over the 10 years.

It was pointed out for the benefit of the audience that 75 percent of Ascena's current workforce resides in Putnam County. That ratio holds true for the part-timers as well with 86 of 114 calling Putnam County home.

"I'd like to point out for the public that 193 employees live in the Greencastle zip code," Councilman Tyler Wade said, noting that the portion of employees who call Greencatle home is 45 percent of the Ascena workforce.

Dory added that even those employees who do not reside in the county still likely spend money on lunch, gasoline and other essentials while they are here.

On the $39.5 million worth of new equipment, Ascena would pay $2.765 million in state sales tax, Dory has said, adding that unlike manufacturing machinery, logistics and technology equipment is not exempt from state sales tax.

The resolution extends the expiration date of the Ascena property as an economic revitalization area from March 1, 2017 out to Jan. 1, 2021.

Resolution 2015-19 was adopted on a motion by Council President Adam Cohen with additional affirmtive votes from Wade, Jinsie Bingham and Mark Hammer (Councilor Phyllis Rokicki was absent).

"We're glad to have you in town," Cohen said with a nod to Ascena Human Resources Director Teena Bryant, who accompanied Dory to the special City Council session at City Hall.

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