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Council gives final OK to removing tax breaks

Fort Wayne City Council members continued unabated on their quest to remove property tax breaks from companies that did not live up to job or investment promises.

What that vote means, however, has yet to be figured out.

"We're in uncharted territory here," said the city's Elissa McGauley, who shepherds the tax phase-ins through the approval process.

Last week, the council did something it had never done before and removed 11 projects from a list of those due to receive property tax breaks. The ten companies – they can have more than one project – had failed to either make the investments in buildings and equipment that had said they would or failed to hire as many employees as they said. In return for the promises, they've been enjoying having their higher tax bills for the new building or equipment phased in over time, rather than hitting all at once.

Tuesday, in the council's regular session, it finalized that vote without discussion.

McGauley said the council's action only takes the projects off the list of this year's tax breaks, meaning they could come back into compliance and return to the phase-in schedule, which gradually raises their property tax to the full amount over a period of up to 10 years.

Each year, the council is required to approve the list of tax breaks, and each year it does so despite a handful of firms that haven't done what they said. But last week they said no, and removed 10 firms and their 11 projects from the list of approvals.

State law appears to require the city send written notice of the denial and to schedule a hearing on the matter within 30 days of that notice. But it also appears to require the decision to have been made weeks ago – by June 30. The council would make a final decision at the hearing; the company could appeal that decision in court.

Councilman John Crawford, who initiated the move to remove non-compliant projects from the list, didn't notice that among them was the medical practice he co-founded, Radiology Oncology Associates, 7910 W. Jefferson Blvd. Crawford was absent Tuesday, but said previously the principle still applied that the tax breaks should only go to companies that meet their goals.

Members voted 8-0 to approve the list without the 11 projects.

Franklin Electric

The council also gave final approval to a Local Economic Development for a Growing Economy contract, known as a LEDGE agreement, for Franklin Electric, which moved its headquarters and engineering center from Bluffton to a site just off Airport Expressway.

The agreement calls for the city to pay 75.percent of up to $360,000 in incentive payments over four years to the maker of submersible pumps and motors, with those payments subject to investment and hiring thresholds. Allen County will pay the other 25.percent.

The company is bringing with it 215 employees and plans to add 35 more; the cost of the 110,000-square-foot factory, equipment and furniture will be about $38.million. The 2012 property taxes on the land were about $2,000; officials estimate Franklin will pay about $630,000 in property taxes.

Officials said they should be moved into the new facility in the first two weeks in August.

dstockman@jg.net

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