Chesterton Tribune

 
 

Burns Harbor sets April meeting and May hearing on Mittal contractor tax abatement

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By PAULENE POPARAD

The Burns Harbor Town Council agreed on a tentative outline Wednesday of a tax-abatement agreement with Indiana Flame Services, an independent contractor that plans to upgrade and expand its operations at ArcelorMittal.

The council, with members Mike Perrine and Greg Miller absent, agreed to consider preliminary approval of the IFS abatement petition at the April 10 meeting and to conduct a public hearing and possible final vote May 8.

In 2012 after 11 months of discussion the council rejected Mittal’s application to extend its current tax abatement after initially giving preliminary approval.

Representing IFS Wednesday, local attorney Greg Babcock apologized for the absence of company director Eliot Weiner, who is in Australia on business; Weiner visited with the Town Council about the expansion project last summer.

Babcock said the company seeks abatement on new personal-property investment over five years of $300,000 annually tied to equipment for moving the IFS Research and Development Department from France to Burns Harbor, and on up to $2.1 million a year for equipment related to IFS slab-conditioning services for Mittal.

Dan Botich of town financial advisor Cender & Company confirmed state law allows the town to impose a fee of 10% or 15% on the IFS tax savings if the company agrees, the fee to be paid annually or upfront in a lump sum and typically to the town’s Redevelopment Commission.

Town attorney Bob Welsh said it could be a tight timeframe hammering out desired conditions by April, but councilmen Jeff Freeze, Gene Weibl and president Jim McGee offered some they’d like to see in the agreement. Freeze recommended a 10-year abatement and asking IFS for a 15% fee.

Commenting on the two-month schedule, Freeze said, “We need to take the right amount of time; if it doesn’t happen in that timeframe, I’d rather be right than rushed.”

From the audience, former councilman Ray Poparad asked if a condition of the agreement should be tied to the number of new jobs IFS will create at Burns Harbor. Babcock said 12 to 15 new hires are estimated over three to four years excluding up to six R&D transfers. Poparad also suggested requiring disclosure of the length of Mittal’s contract with IFS.

Welsh said the abatement doesn’t have to transfer if a change occurs; Freeze said the town should be made aware of any change/sale or the applicant risks the abatement being nullified.

Weibl and Freeze suggested a firm commitment from IFS that the R&D Department would be moved here and a timeframe, and Weibl wants the town to receive copies of confidential reports IFS would have to submit to Porter County tax officials.

Botich said a separate form has to be filed with Burns Harbor annually.

McGee asked Botich to clarify his involvement with IFS. Botich said although IFS will pay his fees for work related to the application, it’s understood he is working for the town as its financial advisor. Botich presented a scenario comparison schedule to the council last night containing assumptions based on IFS input.

Welsh said his fees and other expenses the town incurs in its evaluation of the abatement petition also will be reimbursed by IFS.

Clerk-treasurer Jane Jordan inquired whether IFS has deadlines to meet related to a $240,000 training grant the company received three months ago from the Indiana Economic Development Corp. Babcock said he’ll research whether any apply.

IFS is a subsidiary of The Edw. C. Levy Co. of Detroit. Because IFS operates at Mittal but doesn’t own all the real estate it uses, Welsh said finalizing a legal description for the two IFS sites involved in the abatement will be a challenge.

 

Posted 3/14/2013