Tipton moves to create ED group

Mar 5, 2010 — Kokomo Tribune

Ken de la Bastide

Mar. 5, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- TIPTON -- The Tipton County Council took the first step toward the creation of a new economic development commission, a procedural move that will assist in the event of the future sale of the vacant Getrag transmission property.

The county council on Thursday passed unanimously on first reading an ordinance to establish an economic development department and an economic development commission. Final consideration of the ordinance will take place on March 16.

The economic development commission would consist of three citizen members with one appointment coming from the council, the Tipton County Board of Commissioners and the Tipton Common Council. The terms would be staggered with the county council appointment serving one year, the commissioner's appointment serving two years and the common council selection serving three years.

The commission is being created to finance economic development or pollution control facilities in the future.

Attorney Rick Hall, with Barnes and Thornburg, said the county is no closer to finalizing a deal for the sale of the Getrag property at the intersection of U.S. 31 and Ind. 28 than it was in October when incentives were discussed for the possible sale of the facility to a solar panel manufacturing company.

"There are some incentives the county is willing to provide to the contractors to complete the sale," Hall said.

One of the incentives is providing up to $13 million in bonds to the trust appointed to sell the property at a reduced price to a potential company. Hall said those bonds would be repaid through the Tax Increment Finance District, where the funds are derived from the difference between the current assessed value and future assessed value after improvements are made through the payment of property taxes.

The trust was appointed by the bankruptcy court to sell the unfinished building, with most of the sale proceeds going to contractors who were not paid for work performed on the facility.

Hall said county officials have not acted on a second incentive sought by the trust to abate 50 percent of the $660,000 owed in property taxes on the building in 2010. In exchange the trust would not appeal the assessed value of the building.

He said the difference between an economic development commission and a redevelopment commission is that there is more flexibility when it comes to financing.

Last October the trust asked the county to consider an incentive package to land the company, given the code name "Apex." The company would invest $450 million in the Tipton County property and create up to 850 jobs. Two other locations were under consideration.

The trust wants Tipton County to provide up to $13 million to lower the price of the building to the company as a result of both Getrag and Old Carco (Chrysler) surrendering $13 million issued by the county when the facility was under construction.

Another incentive being sought would be a 10-year tax abatement on real and personal property taxes, if Apex purchases the site.

The $13 million in incentives from the TIF funding would be paid directly to the trust over a period of years. Those funds would allow the trust to lower the price of the building to the potential buyer.

Getrag Transmission Manufacturing and Chrysler LLC announced plans in 2007 to construct the $530 million facility in Tipton County for the manufacture of transmissions for Chrysler.

In 2008 the partnership fell apart after Chrysler filed suit against Getrag over financing for the plant. Getrag Transmission Manufacturing later filed for bankruptcy protection.

Newstex ID: KRTB-0280-42624461