Council approves tax break for growing company

Hope Town Council has approved a tax break to help Indiana Custom Fabrication expand its operations on Raymond Street. But that came after some wrangling over how many new employees the company pledged to bring to town.

Stephanie Long, with Long Family Enterprises, sought the tax abatement on a $500,000 building the company plans to build across the street from the current Indiana Custom Fabrication facility on Raymond Street, which the family also owns. Under a tax abatement, rising property taxes from new buildings and equipment is eliminated in the first year of operation and then phased in over the following years of the abatement. 

Long said after the building is finished the company will be installing new equipment including a laser cutting device at an investment of about $200,000. The company plans to return for a second tax abatement for those investments, she said.

Within a few years, the company expects to have between 30 and 50 employees, she told the council earlier this month. The company is paying an average of $18.76 an hour, she said.

However, the paperwork for the tax abatement only showed a guarantee of one new employee over the life of the abatement, Councilwoman Nellie Meek pointed out. Meek said that for the tax break being granted, she would like to see more employees guaranteed.

"If we just had something where it would say that if you didn't hire people, if it wasn't going, that... the town would have a means of getting out of it," Meek said. "And not be stuck with having to let you guys have that (abatement.)  I don't think you are going to do that."

Councilman Clyde Compton expressed similar concerns, saying that the company was only guaranteeing a $29,000 annual benefit to the community, while seeing more rewards than it was promising to generate.

"I am going to state that I am all for this, but a couple of things just kind of bothered  me," Compton said. "Number one, it is 10 years. And the reason it bothers me is because the state of Indiana code says to do a tax abatement... that (governing bodies) should be able to receive as much or more back from what they are tax abating. 

"So, they requested 10 years and they have on here what their proposed budget for their project of only increasing one person in 10 years and that sure is not going to break us even."

"The project itself, I think is tremendous."

Long said the company is ready to hire at least four new employees to run the laser machine, as soon as the new building can be build and the laser can be installed.

After a bit of negotiation, the two sides agreed to increase the number of guaranteed jobs to 10. 

Town Attorney Scott Andrews said that the number on the state-mandated "statement of benefits" form could lead a community to consider revoking the tax abatement if the terms were not met, however he had never seen that happen before. 

Andrews also pointed out that the town was able to consider how many employees are being retained as a reason to approve a tax abatement. In this case, the company plans to retain 15 employees through the expansion.

The council voted 4-1 to approve the tax abatement, with Compton voting against the approval.

In other business, the Town Council approved a vaping ban in public spaces throughout the community. Andrews explained that the legislation he wrote actually expanded on the state standards, prohibiting vaping in all public spaces except for a home-based business where the sole employee lives and works in the home business and no members of the public access the building.