Friday, February 28, 2014

Journal and Courier Reports Tax Breaks on Subaru's Expansion Plan Clears First Hurdle in Lafayette

From the Lafayette Journal-Courier:

The Lafayette Redevelopment Commission on Thursday approved tax abatements for Subaru of Indiana Automotive Inc.’s planned $422 million expansion to build Subaru Imprezas in Lafayette.

The commission endorsed the automaker’s request for 10-year tax abatements on $353 million in new manufacturing equipment, $1 million in IT equipment and $68 million in real estate improvements at SIA’s facility at 5500 Indiana 38 East.

The abatements allow the company’s property tax liabilities to increase from 0 percent in the first year to 100 percent 10 years after the equipment and building improvements are assessed.

Commission member Jos Holman asked city attorney Ed Chosnek why the abatement on equipment exceeds the typical recommendation of seven years.

“This is part of the incentive package to encourage SIA to make this investment, and $354 million is a significant amount of equipment,” Chosnek said.

“It is within the discretion of the commission to offer 10 years.”

SIA estimates its annual payroll will increase by $1.5 million, which averages out to $30,000 for each of the new jobs to be created, according to Doug Meyer, SIA general counsel and senior manager of legal and human relations.

“The project itself will create 900 new jobs,” Meyer explained.

“Essentially, though, it will be a net 50 jobs because we’ve been advised that Toyota will not be continuing Camry production at the end of the current contract, which runs until sometime in 2016.”
Job creation is the goal, said John Thieme Jr., president of the commission.

“Anytime we can bring jobs to our community it brings people who pay county and state income taxes, people who buy property and pay property taxes,” Thieme said.