Chesterton Tribune

Burns Harbor delays action on ArcelorMittal tax breaks

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The Burns Harbor Town Council withdrew its favorable motion and postponed voting Wednesday on a 10-year tax abatement for new personal property investments at ArcelorMittal USA, the U.S. 12 steelmaking facility.

The delay came after members Greg Miller and Gene Weibl asked for more time to study the proposal. A final decision could occur at the April 11 council meeting.

In return for tax breaks, Mittal will pay about $2 million to retire the town’s outstanding sewer bonds as they come due into 2016 in addition to paying a $692,592 refund for 2011/12 bond and interest payments the town’s already made.

Mittal’s current tax abatement and designation as an economic revitalization area, approved in 2003 for previous mill owner ISG, expires March 2, 2013. Mittal estimates it will make $10 million to $20 million in annual capital expenditures during the new abatement period.

Last year the prior Town Council set in motion granting Mittal an extension to 2023 but Aug. 10, 2011 the council announced the abatement petition was being tabled after members were unable to reach a consensus.

After a new council was sworn in Jan. 1, talks were revived and the matter was placed on Wednesday’s agenda under Old Business. Members confirmed they received the 11 pages of final documents -- which town attorney Bob Welsh spent nearly 20 minutes reading aloud --- on Tuesday.

“Bob, I have more questions than we have time for,” said Weibl. “I do not want to vote for something I don’t understand.”

Weibl noted that last year as a citizen he questioned giving the abatement, but since he’s joined the council he’s come to know the incredible absurdities of local government financing and his views on the abatement are now different, but he still has questions that need answering.

Miller concurred. Although Welsh said a July 13, 2011 public hearing on Mittal’s petition is legal and doesn’t have to be repeated despite the eight-month lag, Miller said he prefers getting additional input from constituents now.

Welsh said, “If you choose to do that it’s a gratuitous thing, not something required on your part.”

Weibl and Miller also want to talk to an advisor with Cender & Company, the town’s financial consultant, about the abatement’s impact. Welsh said the town paid the London Witte Group of Indianapolis $4,000 for its opinion last year and their representative could be made available to answer questions.

Member Jeff Freeze, who like Miller and Weibl joined the council Jan. 1, said he’s comfortable with the abatement agreement presented last night and he supports the pair asking Cender for clarification, but Freeze did not feel another public hearing was necessary.

Commented council president Jim McGee, “(It’s) a lot of money holding out there for Burns Harbor.” Nevertheless, “I want when the council makes a decision, pro or con, I want them to be comfortable.”

Counc’ilman Mike Perrine, who had moved for final adoption of the updated economic development agreement and companion resolution, told Miller that members “need to look beyond technicalities, wordage.” Perrine said the town can’t exist without Mittal, and “that mill is not ArcelorMittal’s flagship. It’s an old mill and needs to be updated.”

He continued, “If there’s no expansion or development, we’re riding a dead horse that will eventually collapse beneath us.”

Perrine said Mittal has allowed Burns Harbor to remove a restriction in the original 2011 agreement that would have barred the town from designating the mill a tax-increment-financing or TIF district during the life of the new 10-year abatement.

Miller said he’s not against tax abatement. “When I hear the representations are true, I’ll come back in April in support.” Perrine referred Miller to last year’s London Witte report instead of consulting Cender. Miller asked what’s the rush.

McGee said he agrees with both sides of the arguments being made. Mittal has been patient this long, added McGee, and a company representative in the audience indicated the current proposal still will be on the table for the April meeting.

Freeze said it’s his understanding that granting the abatement will have nominal to no impact on the town, but he questioned how the Porter County Assessor will know what to abate. Welsh said it’s the steelmaker’s responsibility to provide the necessary documentation.

Freeze also pointed to the resolution section that describes the Mittal plant as having “become undesirable for, or impossible of, normal development and occupancy...” Welsh said the description is not specific to Mittal but is a statutory requirement to designate an economic revitalization area eligible for tax abatement.

Freeze confirmed that the council is on solid ground taking action based on a public hearing last summer.

Welsh said he paid close attention to the chronology of events regarding the abatement application, and both he and Mittal representatives anticipate no problems. “On a legal basis, I’m satisfied and so are they.”


Posted 3/15/2012