Monday, July 7, 2014

Journal & Courier Reports West Lafayette Reviews Tax Abatements

From the Lafayette Journal & Courier:

Tax abatements for business personal property and real estate taxes as incentives seem to be doing well for Tippecanoe County businesses, despite all of the political talk earlier this year about phasing out the personal property tax as an incentive to lure businesses to Indiana.

Chandler Poole, West Lafayette economic development director, plans to present his annual compliance report on the city’s approved nine abatements to the city council on Monday.

Eight of the nine companies with abatements have met or exceeded the proposed investment, salaries and job creation goals laid out when the relief was requested. The ninth business exceeded its salary estimates, is close to hitting its mark for new jobs and is $5 million off the mark on its investment of new equipment.

Abatements phase in property taxes on businesses’ new equipment or new buildings, Lafayette Economic Developer Dennis Carson said, and work well as incentives to encourage businesses to locate or expand here.

When a business requests abatements, redevelopment boards and local lawmakers look at how much investments and jobs will be brought to the community before approving or rejecting the application.

Carson noted that when a company misses the mark on its estimated investment, it is typically because the estimate was too high when the abatement is approved.

“We have a very strong economy in West Lafayette because we’re a knowledge-based economy,” Poole said. Many businesses with abatements have ties to Purdue University or high-tech industries.

Carson took a slight exception to Poole’s assessment, but he noted that Lafayette’s manufacturing-based economy is diverse, which makes it more resilient to economic storms.

The Lafayette City Council approved 35 of the 38 compliance reports, Carson said, and the final three are expected to be accepted Monday at the city council meeting.

But three companies deemed last month as being in compliance — Rea Magnet Wire, Kirby Risk and McKinney Corp. — missed some of the goals of the abatements because of the struggling economy. The shortages were not enough for the council to call them out or revoke the abatement, which Carson said has been done only once, about 15 years ago.