A public hearing on June 17 is the next stop for a 100 percent property tax abatement requested by POET Biorefining Shelbyville LLC.
On Monday morning, the Shelbyville Common Council voted 5-2 in favor of POET's abatement application.
Councilmen Brad Ridgeway (R-4th Ward) and Jeff Wright (D-5th Ward) voted against the request.
POET, based in South Dakota, wants to build an ethanol refinery northwest of Shelbyville on County Road 300 North just west of Tom Hession Drive, an area recently annexed by the city.
In a first for Shelbyville, 100 percent of POET's personal property taxes on more than $105 million worth of equipment is to be abated for 10 years if the application is finalized.
POET would pay no property taxes on the equipment over the 10-year abatement period under the proposal before the City Council.
Additionally, 100 percent of the property taxes on the company's $75 million real estate investment would be abated for 2 years, with 80 percent of the taxes abated for the remaining 8 years.
The City Council's written resolution for the project contains a “clawback” provision requiring POET to repay the abated taxes if the company, “ceases operations or transfers abated personal property to another operation without replacement.”
Brian Asher, Executive Director Shelby County Development Corporation and council member commented in a Facebook response to public comment and this story on the GIANT fm Facebook page.....
"The projected 10-year total Real Property tax as is without POET would be estimated at $47,163 during a 10 year period with the current assessed value schedule. Even with the abatement, POET will pay approximately $3,925,585 in those same 10 years (83 times what the city currently would receive). If you want to talk beyond the first 10 years, the total Real and Personal Property tax due by POET will be approximately $2,529,821 annually – which is over $25 million from Years 11 through 20 - (530 times what the city currently would receive). And a water line is being extended to run down Tom Hession Drive which gets water closer to Fairland and other Economic Development opportunities (estimated $2.5 million-dollar value) which also adds water redundancy for the hospital and casino.
Farmers will get a .10 cent increase per bushel of corn plus reduced transportation costs due to the POET plant. 40-45 jobs $2,000,000 annual payroll which is $50,000+ per year. This is few of the many reasons why we want/need this company in Shelby County. Nothing happens overnight, we must plan for the future."
During the council's premeeting Monday, just before its regular meeting in City Hall, 44 W. Washington St., Councilman Rob Nolley (R-3rd Ward) spoke in support of the abatements.
He noted that the council's Tax Abatement Committee, which he chairs, voted unanimously last week in favor of POET's request, and he went over the benefits of the project.
“What this project brings is not just the plant but also the water line that's going up Tom Hession Boulevard that opens up all that land for development. That is by far the biggest benefit of this project. And, not to mention the high-paying jobs,” Nolley said.
POET has projected its ethanol refinery will create 40 to 45 full-time jobs paying salaries and benefits totaling $2 million a year.
However Councilman Wright said waiving nearly all of the company's property taxes for a decade was just too much.
“I hear what Rob's saying, however, I think going to 100 percent abatement for 10 years is excessive, and I'm going to vote no,” Wright said.
Councilman Ridgeway flew back from a vacation in Florida just to attend Monday's council meeting and afterward said he voted against POET's abatement request because it was a bad deal for the city.
“$160 million and we're not going to get very much tax revenue. Everybody wants to say, 'After the tax abatement.' That's 10 years later. We've gotta have better revenue from that source. How are we ever gonna grow a city if we don't get the tax revenue from some of these companies?” he said.
Ridgeway is running for mayor of Shelbyville against incumbent Mayor Tom DeBaun in the city elections Nov. 5.
During the council's premeeting, DeBaun explained his reasons for supporting the POET abatements.
“On the surface, by itself, don't like it. Based upon the other aspects it brings not only to the farmers but just the community as a whole, I think it's necessary. And, quite frankly, if it weren't for the water line or the abatement, they wouldn't be here,” he said.
DeBaun noted a recent water main break in the area near the POET site left both the casino and the hospital without water which was a big concern.
POET has stated it will offer local farmers a 10-cent per bushel premium on the price of the corn they sell to the ethanol refinery.
The City Council's abatement resolution calls for making the POET site an “Economic Development Revitalization Area” under Indiana Code 6-1.1-12.1 to allow for the tax abatements.
Doing so requires a public hearing. The council is due to hold that hearing on June 17 in City Hall with a premeeting starting at 8 a.m. followed by the regular meeting at 8:30 a.m.