Abatement figures show companies exceeding expectations

Friday, July 14, 2017

Compliance, for all intents and purposes, can be defined as the act of obeying an order, rule or request.

But with apologies to Merriam and Webster, mere compliance alone doesn’t come close to describing the act of compliance reported within the statements of benefits for seven companies currently receiving tax abatement from the City of Greencastle.

Proof of compliance with corporate promises made in securing tax abatements is an annual requirement of companies receiving such local benefits. And the July City Council meeting is when the Greencastle governing body annually considers those documents in resolution form.

During the Council’s two-hour meeting Thursday night, Greencastle/Putnam County Economic Development Director Kristin Clary called the annual process “standard operating procedure.”

But it was anything but standard this year as the City Council tackled seven of those statement-of-benefit forms and accompanying resolutions for compliance involving tax abatements previously granted for Ascena Retail Group, Chiyoda USA Corp., Crown Equipment Corp., Heartland Automotive, IAC Greencastle, Phoenix Closures and Garmong Development Co.

Clary offered a “quick overview” of the cumulative impact of those numbers.

Collectively, she reported, the most recent tax abatement efforts involving those seven companies within Greencastle city limits have resulted in:

-- 3,544 jobs either newly created or retained.

-- $51.2 million in real estate investment.

-- $236 million investment in equipment covered by the abatements.

-- $136 million in total payroll related to the 3,544 jobs noted above.

Taken individually, the job-related statistics revealed are nothing less than impressive for six of those companies and downright incredible for four to them as reported by Clary.

“Each has lived up to their agreement or more on what they promised to do for us,” Clary told the Council.

For example, Ascena promised 269 jobs would be saved or created by the tax abatement granted to the women’s clothing distribution center when it expanded. In the aftermath, the jobs saved or created have numbered 747.

Chiyoda has had much the same success, promising to save or create 372 positions by its tax abatement, a number that has become 522 real jobs.

A similar story can be told at Crown, where the tax-abatement request promised to save or create 445 jobs yet has yielded 667 fulltime positions (and that’s before the latest Crown abatement on equipment at the old Techno Trim plant even takes effect next year).

At Heartland Automotive, a promise of 405 jobs created or saved via a tax-abated project turned into 620 fulltime positions.

The numbers are fewer but the story is much the same at Phoenix Closures, where 90 positions were promised to be created or saved by tax abatement but 105 jobs have materialized.

Only IAC Greencastle has come up just a tad short on its promised numbers tied to tax abatement. Its abated projects were predicted to save or create 893 jobs but have produced 883 at this point.

“So they’re real close,” Clary said of IAC.

The seventh abatement compliance form approved by the Council via resolution belongs to Garmong Development Co., Terre Haute, which owns the shell building that is leased to Dixie Chopper for its parts department and storage.

City Council President Adam Cohen stressed that the Council was not approving any new abatements Thursday night but was only reaffirming those already in place. The compliance actions were done separately and unanimously.

Mayor Bill Dory also noted that some of the same companies involved Thursday night also have had abatements in the past but those have run their course and the companies are now paying in full on property or equipment previously abated.

The abatement and jobs discussion also resulted in Clary being asked about the starting salaries at the Greencastle companies.

Distribution facilities, she said, are typically starting their employees at $14.50 to $15.50 per hour, while most manufacturing firms locally are hiring employees in at anywhere from $11 to $17 per hour depending upon position and experience.

That prompted a question from the Council about the local “living wage,” or in other words the minimum income necessary for a worker meet their basic needs.

It was noted that for a single person with two children, a living wage of $17 an hour would be needed.

“We have positions in this city (where) we don’t pay $17 an hour,” Mayor Dory responded.

That point wasn’t lost on other city officials.

At least twice during the evening councilmen and department heads expressed a need and desire to raise salaries within city ranks, urging that the topic be raised during upcoming budget discussions.

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