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Burns Harbor Town Council approves tax abatement for ArcelorMittal power house

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By JEFF SCHULTZ

Showing appreciation for what AcelorMittal brings to the town, the Burns Harbor Town Council honored the steelmaking facility’s request for a ten-year tax abatement for a major rebuild of its “power house.”

Managers Susan Zlajic and Carl Pfeifer said the investment would be $80 million for phase A over two years. The phase consists of rehabilitating four boilers, two of the turbine generators, one turbo blower and a reverse osmosis water treatment plant.

The power house creates steam energy for the plant and the goal is to improve the reliability of equipment, Pfeifer said.

The project won’t add any permanent jobs or salaries, Pfeifer said, but local construction firms will be hired for the work. The plant intends to keep its number of employees at 650.

The abatement would start once after the project is complete in October 2018, in time for the 2019 pay 2020 assessment year. The equipment’s assessed value is said to be $32 million.

For the first three years, the abatement would be 100 percent, 75 percent for years four and five, and 50 percent for the final five years.

Making the motion to approve the abatement was Town Council member Eric Hull, who was appreciative of the role the plant plays in the town and was happy to assist it.

“I’m glad to see you are able to talk to us. Please let us know if there ever is something else we can help you with,” Hull told the ArcelorMittal representatives in the audience.

All Council members voted in favor of Hull’s motion.

This is the second tax abatement granted to ArcelorMittal in the last two years. The previous Town Council in April 2015 voted 4-0 in favor of a ten-year abatement on three different projects -- a stacker reclaimer replacement, a rebuild of the No. 12 boiler and a caster mold rehabilitation -- totaling $51 million in new investments.

Indiana Flame abatement

In another matter involving abatements Wednesday, the Council voted unanimously to accept Indiana Flame Services’ most recent compliance form for its five-year abatement, although the number of employees is less than the company said it would try maintain.

IFS was awarded an abatement in 2013 when it estimated that the company would retain 42 employees with an increase of $203,000 in wages for the five-year period.

The Council saw the numbers at its meeting last month with IFS reporting it had 36 employees and tabled the compliance form until IFS could explain the discrepancy.

Representing the company on Wednesday, Jim Derkos indicated the drop in employees is due to an unanticipated slowdown in production. The company, which specializes in steelmaking, has had fewer tons in scarfing, cutting and slitting compared to the numbers in 2012 and 2013. The decrease began in 2014 and is still in decline.

IFS employed 42 workers in 2013, 44 in 2014, 37 in 2015 and 36 in 2016.

Derkos said however that even though the average number of tons processed by each employee has diminished, the company has managed to increase the average salary, from $54,755 in 2012 to $57,904 in 2016.

“We tried to keep up our production but we couldn’t handle 42 full-time employees. We don’t know what production will be in the next few years,” he said.

Seeing that the average employee salary has risen despite the drop in production, the Council agreed to pass IFS’ abatement along for another year.

Hull said he didn’t feel it was necessary to deny the abatement when IFS is doing what they can with production.

The Council put in place a resolution that requires businesses with abatements to submit compliance forms to the Town first and require that the Council President sign them before they go to the County Assessor and Auditor offices.

Redevelopment ordinance

In addition to the two abatement resolutions, the Council passed 5-0 an ordinance amending text in the ordinance structuring the Town’s Redevelopment Commission.

Changes in the state law now make it permissible for school boards to appoint a citizen to the commission that does not have to be a school board member and that language will be included in Burns Harbor’s ordinance. Also, all members will be appointed to one-year terms.

 

Posted 7/14/2016

 

 

 
 
 
 

 

 

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