County Council Denies $33M In Tax Abatements For Louis Dreyfus

Kosciusko County Courthouse. (Photo: Nick Deranek/News Now Warsaw)

By a 5-2 vote Thursday, the Kosciusko County Council denied Louis Dreyfus Company’s request for personal property and real estate tax abatements.

The vote came after a public hearing on the abatement declaratory resolutions, which was requested by attorney Steve Snyder in October on behalf of Louis Dreyfus in Claypool.

Snyder began his presentation Thursday by admitting there was some confusion on the numbers at the October meeting.

“I think we changed them 10 times by the time we got a hearing, and then changed them again. And I did this right after the last hearing to make sure we had them right and we still got it wrong,” he said.

The total for the whole project – which Snyder said Councilwoman Sue Ann Mitchell pointed out to him in a telephone call Thursday afternoon – is $33 million, with $16 million for real estate and $17 million for personal property. At the October meeting, the figures presented totaled about $50 million. Snyder said he gave County Auditor Michelle Puckett a corrected confirmatory resolution with the statement of benefits for real estate improvements modified to show that the cost for those improvements to be $16,215,000, as opposed to the $33 million “that was probably on the copies that were distributed to you.”

Snyder reminded the Council that they looked at abatements for Louis Dreyfus on numerous previous occasions.

“They have expanded their facility over the years, extensively, and desire to continue doing that, this time with an additional building and an additional processing facility with, again, building costs of $16 million and personal property costs for manufacturing, logistics and information transfer of $17,563,000,” Snyder said.

Construction is scheduled to begin Jan. 1, 2021, and concluded by Dec. 31, 2022. Louis Dreyfus, a privately owned company, has 117 employees and this project will add seven. Current salaries of the existing employees is $8,835,413, and the additional salaries for the new seven employees will add $343,000.

He said in October, the county Redevelopment Commission approved it as they’re required to do since it’s in a Tax Increment Finance District. Redevelopment recommended a 10-year abatement on the real estate and five years on the personal property, which the Council decided on in October.

Snyder said Louis Dreyfus indicated to him that they come to Kosciusko County because of the good way they are treated, even though they have facilities “all over the world.”

Councilman Mike Long asked what was the percentage of Louis Dreyfus’ employees who lived in Kosciusko County. Snyder said he didn’t think they had that information. Councilman Ernie Wiggins asked how many other facilities did Louis Dreyfus have in the United States. Snyder said he believed there were three other major facilities in the U.S., doing the same thing as the Claypool facility.

Councilwoman Kimberly Cates asked if Louis Dreyfus has taken any consideration of the road maintenance and improvements, the effect on the school district’s tax revenue and on the county’s costs.

“The initial facility, including the road improvements on (Ind.) 15, were funded with TIF bonds and those bonds were purchased by Dreyfus so there’s no exposure to the county there,” Snyder replied. “To the extent that there’s improvement, and if we go to the south side of the property and look at the potential for county road improvement there, I’ve never known the planning people to approve that type of thing without some contribution from the person’s whose benefit is greatest.”

In the interior, he said everything is maintained by Dreyfus and the state of Indiana maintains Ind. 15, which handles “99% of the traffic going to the facility.”

After Snyder was finished, Miechi Petro said she wasn’t for or against the abatements, but had some questions.

“What is a rubric you would use when you grant an abatement like this? What are you looking at? What are the numbers you look at when a company comes before you and asks for an abatement? If you could explain that rubric to the community, I would appreciate that,” Petro said.

She said what concerns her about these abatements was the percent of the property tax money that won’t go to the schools if an abatement is granted. Petro said when companies bring in new employees, their employees want good schools for their children, schools need to make improvements to their facilities for the new students but the tax abatements keep the property tax dollars from the schools.

Councilwoman Joni Truex said she’s working with Kosciusko Economic Development Corporation on an actual guidebook to help companies that are looking at relocating to Kosciusko County.

“It’ll give them opportunity to see what they could ask for and what the requirements are. We do not have it finalized,” Truex said. “One of the things that we have discussed at length … is that there will be penalties involved if they are late on bond payments … if they’re late on filing on anything. It automatically voids any abatement they have received. That has not been approved. This is all in the works, but there are some steps we are taking.”

She said they are modeling the guidebook after Allen County’s and others.

Mitchell said the tax abatement is a “gradual easing into them paying taxes. They’re not paying zero taxes. They’re based on a percentage every year of an increased tax abatement.”

Had Louis Dreyfus not come here in the first place, she said the county would not have that assessed valuation to begin with.  The additional wages in the county also benefit the county, not only for what the employees spend here but also through the local option income tax. Mitchell said the school is getting the money, just not as quickly as it would have.

Puckett said the county’s only abatements are the Dreyfus one in Clay Township and three in Wayne Township. Of the three in Wayne, two are in their last year and the other is halfway through.

After some final comments from Snyder about the benefits Louis Dreyfus provides to the county, the meeting was closed to the public and the Council discussed their concerns.

Wiggins said his issue with this abatement request was that it was bringing only seven new jobs.

Long recognized that Dreyfus has been a “very important” part of the community, but said abatements are supposed to be a tool to entice new business into the county. “I think we’ve gotten away from that to some extent and allowed expansions,” he said.

He said the TIF District was formed because of infrastructure needs to entice Dreyfus to the county. “To abate the very taxes that would help fund this TIF when we have 800S and 900S that are in need of some attention, and we have an opportunity through Community Crossings to double those tax dollars but in order to do that we have the tax dollars upfront to be able to match that 50%. So, based on that and the sheer numbers we’re looking at … we’re averaging $154,000 worth of abated taxes a year over the next 10 years,” Long said, noting he was struggling with the request.

Mitchell noted that her reservation was the fact that Dreyfus paid its taxes late in 2018 and 2019 for the fall installments. “If we’re giving an abatement, it seems like you ought to pay your taxes,” she said.

Long made a motion to deny the request and Wiggins seconded. Long, Wiggins, Mitchell, Cates and President Jon Garber approved the motion, with Councilmen Doug Heinisch and Truex against it.