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Two local companies first to apply for tax abatement under new Jasper ordinance

Two Jasper companies stood before the Jasper Economic Development Board yesterday to apply for tax abatements for expansions in Jasper.

Indiana Furniture requested abatements for an expansion project at their plywood manufacturing facility and the construction of a new administrative office building.

Stens applied for abatements for renovations on an existing building they are considering purchasing from Kimball in a planned expansion.

Indiana Furniture south is where the proposed expansion will occur. Indiana Furniture President/CEO Bret Ackerman expects construction to begin in November if the application is approved this month.

Indiana Furniture plans on adding on to the existing plywood manufacturing plant to expand its assembly line. The plan calls for the construction of the expansion, then new manufacturing equipment will be installed to take over production as existing equipment is updated in the plant. This allows for Indiana Furniture to maintain production while completing the upgrades and expansion.

Additionally Indiana Furniture introduced plans to build a new administrative building on the property existing at 100 South. Bret Ackerman, President and CEO Indiana Furniture Industries, explained the administrative offices are currently housed at the building on Mill Street. The Mill Street location also houses the chair production facility and the administrative offices have been expanded into the building in the past but the current needs predicate the plans for the new building.

Indiana Furniture presented the board with approximately $20 million in expansion and improvements of the existing facility. The expansion will also include seven more jobs.

Ackerman stated the expansion will allow them to maintain their competitiveness in the furniture market. “If we’re to become one of the bigger players … this application process has really got us excited about what the city has to offer to give us a boost to get going.”

This was the first application under the city’s new tax abatement ordinance and the discussion was expansive as the board considered the economic impacts not only on Indiana Furniture but also on the future budget of the city. Mayor Bill Schmitt was in attendance and interjected several times to reiterate areas he felt needed to be considered in the application process.

The tax abatement is similar to an existing abatement through the state that allows the city to redistrict a property as a economic recovery area (ERA) to allow for the improvements to be considered as a basis for property tax abatement, however, Jasper’s new abatement is much more aggressive compared to the state’s program.

The city designed a point system based on several factors to determine a company’s eligibility for abatements, how long the abatement would last, and the percentage of the abatement. For example, if a company scores high enough the abatement could be up to a maximum of ten years and potentially is 100% of the property tax for the affected property.

Although the process is point-based it is subjective in nature as the Economic Development Commission reviews each point category and decides how many points to award the company. Guidelines are available for some of the categories but for items like community involvement and green practices are up to the board’s discretion.

IFI scored 95 points on the scale the ordinance allows. This enables IFI to receive 10 year abatement with seven years in which 100% of their improvements to date will be abated. After the seven years, the abatement is reduced to by a percentage of the cost of the improvements each year. In this case it was 75% the eighth year, 50% the ninth year, and 25% the tenth year.

The project is planned to be completed over the next four years. Ackerman stated this is a large expansion project for Indiana Furniture and he felt that they would have moved at a much slower rate if it weren’t for the new abatement program.

Ackerman expressed that the new ordinance makes Jasper very competitive in enticing new business to the area.

Peter Ariens, President of Stens, filed his application with the board as well. Stens distributes parts for outdoor power equipment. Stens moved their headquarters into a 90,000 square foot facility in Jasper in the 80’s.

Stens is considering moving into an empty building near its present location to facilitate continued growth as it aggressively moves into other markets. The new building is 208,000 square feet, essentially doubling their current size.

According to Ariens, This is one of several sites Stens is considering for its expansion and before the passage of the tax abatement occurred, Stens was eyeing a new location in Kentucky. The abatement ordinance allowed Stens to reconsider a lateral move within the community and to more seriously consider the property near its present facility.

The board had a much easier time coming to a decision concerning Stens after the exhaustive discussion regarding the Indiana Furniture package.

Stens scored 108 points on the scale allowing a ten year abatement to occur as well. The driving force behind Stens’ score was based on the 98 jobs they plan on adding with the expansion. The weighted average pay of the jobs will be approximately $17 an hour which further added to their score.

The meeting was a learning experience for the Economic Development Board, but Board President Dan Mundy stated that the board wants to do what they can to help the two companies that came before them today. He is concerned over what the abatement could mean for the residents of Jasper in regards to future tax burdens.

The packages are now forwarded to the city council and a public hearing will be held before the final approval.

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2 Comments

  1. This is what the Jasper Action Team existed for. Bring economic growth to Jasper. It is great to hear about current businesses expanding here in Jasper. This is why the city (and county) need to be aggresive with tax incentives, otherwise others like Stens will consider leaving instead of staying.
    A shout out to the JAT and our State Rep Mark Messmore, who without them the abatements would never have occured. On a side note, this is also why the elections this year are so important. 😉

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