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City gives final OK to POET tax abatement

 

A 100 percent property tax abatement for POET Biofuels has cleared the final hurdle.

 

On Monday morning, the Shelbyville Common Council approved a request by the South Dakota-based company for the first-of-its-kind abatement by the city.

 

POET plans to build a refinery to make ethanol on a nearly 145-acre site located on County Road 300 North about one-half mile west of Tom Hession Drive. The city recently annexed the area.

 

Ethanol, or ethyl alcohol, is a gasoline additive distilled from corn. The U.S. Environmental Protection Agency has approved increasing the amount of ethanol that can be added to gasoline from 10 to 15 percent for use in cars made since 2001.

 

POET's attorney, Stephen Schrumpf of the local law firm Brown, DePrez and Johnson, told the council the refinery would use more corn than is produced in Shelby County each year.

 

“Assuming that all of the farmers in Shelby County were to sell their corn to POET, that would have an economic impact of goods purchased in Shelby County of almost $70 million. (Annually?) Uh, annually, yes. Additionally, they will employ 45 employees with wages, just salaries, of approximately $45-to-$50,000, and then a benefit package on top of that,” he said.

 

POET asked the city to abate all personal property taxes on more than $105 million worth of equipment for 10 years, and abate nearly all of the property taxes on $75 million in real estate, also for 10 years.

 

The City Council's vote to approve the tax abatements was not unanimous.

 

As they had previously, City Councilmen Brad Ridgeway (R-4th Ward) and Jeff Wright (D-5th Ward) voted no.

 

Wright called the abatements “excessive.” Ridgeway said residents he's talked to also don't like the abatement package.

 

“No one's disputing about farmers; I have a lot of clients who are farmers. It'll be great for farmers; it'll be great for jobs. Nobody's disputing that. What we're disputing here, what I'm interested in, the majority of people I talk to, is the excess tax abatements. We're an attractive city; we have a lot to offer. And you just said yourself, we're going to be partners. Here's what the CEO of POET said, 'This is the right project in the right location at the right time.' I don't think they'd walk away if we gave them a standard tax abatement,” Ridgeway said.

 

Schrumpf noted that POET was considering a location in Ohio, and Ohio doesn't have any tax on personal property which was very appealing to the company.

 

He added that the project will mean a new water line run to the area to spur development.

 

Shelbyville Mayor Tom DeBaun added that the state allows local communities to give even larger property tax abatements which the city won't do.

 

“The only comment I would add to that is, the state of Indiana stepped in and said, cities you have the ability to give a 20-year tax abatement, called a super-abatement, but I don't know that the state of Indiana has ever said, let us bear that burden. Typically, in every legislative session, the state of Indiana is saying, cities and counties, good luck. We have had numerous requests for 20-year abatements, and we've said from the beginning, no we will not consider that,” DeBaun said.

 

This was the second and final vote by the City Council on the POET tax abatements. Approval clears the way for the company to proceed.

 

POET expects to finish building the ethanol refinery by March, 2020.

 

In related matters, the City Council approved forms filed by eight local companies to show they're in compliance with the terms of their tax abatements. The companies are:

 

Nippon Steel

 

Plastic Moldings

 

Ryobi Die Casting

 

Sankyo

 

Ten Cate Enbi

 

Toray Resin

 

Triumph Fabrications

 

Yushiro (YUMA)

 

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