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8/9/2017 10:55:00 AM
Elwood explores criteria and a fee for tax abatement applicants

Rebecca R. Bibbs, Herald Bulletin

ELWOOD – The Elwood City Council on Monday introduced a resolution that sets criteria and would charge tax abatement applicants a non-refundable fee of $750 for each real or personal property on which they seek a break.

The city's attorney, Michael E. Farrer of Graham, Regnier, Farrer & Wilson, said the measure was intended to protect the city's investment and hold abatement applicants to the terms of their agreement.

"What we're trying to do with this is just apply some guidelines," he said. 

Elwood Mayor Todd Jones said there was no incident that triggered the decision by city officials to draft the resolution, only a desire to update ordinances.

The resolution is likely to come up for discussion at the council's next meeting in September.

Under the resolution, only companies that meet certain criteria would be eligible for abatements. Those include that 70 percent of new jobs created must exceed the city’s median wage without consideration of other compensation, such as insurance or profit sharing; the salaries are based on 2,080 hours worked annually; and the applicant meets the annual pro-rated number of new hires established under the application.

Abatements for personal property would be limited to five years.

In general, abatements will not be approved in tax increment finance districts unless they have been targeted for redevelopment because of brownfield sites, obsolete buildings or other significant barriers to development, according to the resolution.

Applicants would be prohibited from appealing tax assessments unless specific criteria are met, including that the original assessment exceeds the economic development project cost; the original assessment exceeds the purchase price for the real estate; or the assessment grows by 15 percent or more from one year to another or an average of 10 percent per year for two or more years.

Exceptions can be made if a project diversifies the current economic base by attracting high-tech, knowledge-based or other growth industry jobs; encourages entrepreneurial activity or produces jobs when the city’s unemployment rate exceeds 10 percent.

Jones said the draft is the result of some research of what has been done in other communities, including Anderson. Based on that research, Jones said he doesn't believe the application fee will be a deterrent for companies wanting to do business in Elwood.

"In other communities, it's been used, and it's been successful," he said.

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