From the Fort Wayne Journal-Gazette:
The New Haven City Council approved continuing existing tax breaks for seven companies – some of which were found to have fallen below their original promises of job retention and job creation.
Nicole Liter, an Allen County economic development specialist, presented the council with the annual compliance report Tuesday.
Liter said her department looks at whether the company has created and retained the jobs promised when the company applied for a tax abatement, and looked for a compliance level of at least 75 percent.
“If they do not meet that 75 percent, then we look at the investment dollars, again looking to see if they invested at least 75 percent of what they had promised,” Liter said. If the company still does not meet compliance, then economic factors need to be taken into consideration, Liter said.
Parker Hannifin Corp. has retained 51 percent of its current employees and 78 percent of current payroll. When a tax abatement was approved, company officials had projected creating 250 new jobs and nearly $4.8 million in new payroll, but the company is at zero percent compliance, the report shows.
Mayor Terry McDonald said the company has been hit hard by the Chinese manufacturing sector.
“They have lost several larger customers who are now shipping their business to China,” McDonald said.
Vera Bradley Designs Inc. also fell below abatement projections, although it maintained 100 percent of its current employees, according to the report. The company had projected creating 497 jobs and $17.4 million in new payroll, but to date hascreated 272 jobs and $9.1 million in payroll.
Summit Foundry Systems lost two employees but created one of eight projected new positions, according to the compliance report.
Some residents attending Tuesday’s meeting expressed concerns about the tax abatement process. Marvin Jarvis said the tax abatement agreements have no teeth.
“These companies come in and say they will do this and do that and all the officials, not just here, but in Fort Wayne, as well, grant a tax abatement,” Jarvis said. “And when the companies don’t live up to their promises, there’s nothing that can be done.”
Roger Clayton, a former council member, agreed.
“I’ve asked these company officials if it will change their decision if they don’t get the abatement and they say no, ‘it’s just the icing on the cake.’ But still, no one ever turns them down.” Clayton said.
Other companies approved for continued abatements included Fort Wayne Rube Realty, Central States Enterprises, Double B Property Management, and Quincy Recycle Paper Inc.
http://www.journalgazette.net/article/20120613/LOCAL/306139927/0/SEARCH
