Members of the Elkhart County Council Saturday approved two preliminary tax phase-in agreement for recreational vehicle company Forest River that could bring as many as 160 new jobs to the area.
A tax phase-in is a partial or temporary exemption of a company from having to pay property taxes with the express purpose of stimulating economic development.
First to be approved Saturday was a declaratory resolution supporting an eight-year tax phase-in agreement involving Forest River’s Millersburg complex, 66135 Ind. 13, in Clinton Township. Dave Ogle, director of business retention and expansion for the Economic Development Corp. of Elkhart County, helped present the proposal for Forest River.
“As we all know, the recreational vehicle and bus industry is rapidly retracting in the market place, and through that retraction there is good news and bad news,” Ogle said. “What used to be 30 or 40 manufactures is now three, four or five manufacturers and I think we have a great opportunity to continue to protect that business cluster and its supply chains that go along with that.”
Ogle also noted that securing a tax phase-in through the county will allow Forest River to qualify for much-needed state funding support that could reach as high as $6 to $10 million — money the company says is integral to its proposed expansion plans. What’s more, Ogle noted that a show of support from the Council would also go far in convincing the company to stay in the area, rather than relocate to other states that may be offering a better, cheaper business environment.
“The reason that this is an important consideration for you is that with that retraction, we’ve had quite a lot of increased nipping at our heals from surrounding states,” Ogle said. “So the strategy here is for us to put our best foot forward, and solidify that business cluster we have in this market place. So we certainly would appreciate your support in helping us do that.”
According to county attorney Craig Buche, the Millersburg expansion promises approximately $2 million in real estate redevelopment coupled with approximately $150,000 in new manufacturing equipment.
In addition, the company has indicated plans to hire approximately 120 new full-time positions. Such hiring is expected to lead to an annual increase in payroll of nearly $5.5 million.
In order to qualify for the tax phase-in agreement, Forest River has agreed that it will stay in operation at its Millersburg location for no less than 10 years. Should the company fail to meet its obligations under the phase-in agreement, Forest River would be forced to repay the county a prorated portion of the total real estate and personal property taxes saved as a result of the tax phase-in agreement.
Final action on the proposed tax phase-in is set for Aug. 11, at which time the County Council will hold a public hearing and determine whether or not the qualifications for a tax phase-in can be reasonably met by the company.
Also approved Saturday was a declaratory resolution supporting a five-year tax phase-in for Forest River’s Middlebury complex, 11555 Harter Drive, in York Township, that could bring 40 new full-time positions to the area.
In connection with this expansion, the company has indicated plans to invest approximately $1.25 million in new manufacturing equipment
As for the 40 new full-time positions expected, Buche indicated that an annual increase in payroll of nearly $1.8 million can be expected.
As part of its tax phase-in agreement, Forest River has agreed that it will stay in operation for no less than seven years at its Middlebury location or face forfeiture of the agreement.
Final action on the proposed tax phase-in agreement has also been set for the council’s Aug. 11 meeting.