Greenfield agrees to annex Convace and its 360 acres to benefit both

The proposal, originally pitched during the summer, received unanimous approval: Greenfield officials are pleased to be getting extra tax dollars from the major employer, while company officials are looking forward to getting city sewer service.

Since Covance constructed a lift station to hook into the city’s system, the transition to using the city utility will probably happen by the end of the month, said Mike Fruth, director of utilities for Greenfield.

Fruth said the city will treat as much as 300,000 more gallons of material a day; Covance’s monthly bill for sewer service will be between $20,000 and $25,000 per month.

Covance paid for the infrastructure to connect to the city and also a $96,000 one-time connection fee. As part of the annexation deal, Covance was given a 10-year tax abatement on property values and was also waived an availability fee of $260,000 for the utility connection.

Part of Covance’s 460-acre campus – roughly 100 acres along Main Street – was already in city limits. That included the historic Spanish-style buildings that were part of the original campus of Eli Lilly and Co.’s Greenfield laboratories. Over the years, Lilly expanded south into unincorporated parts of the county and had its own treatment system for wastewater.

A spokesman for Covance said in July that the company volunteered for the annexation in order to hook into the city’s sewer system.

Fruth said ultimately, the deal is good for the city because over time property tax dollars from the 600-employee facility will stream into city coffers. The company will be paying the city roughly $160,000 in annual taxes, but the tax abatement calls for the first year of taxes to be waived entirely, and then taxes to be phased in over time for the next nine years.

“Over a period of time they’ll pay property taxes like any other city property that already has city services,” Fruth said.

The annexation deal was approved despite some uncertainty over what will happen to Covance and its employees in the coming months. Last month, the $6.1 billion purchase of Covance by LabCorp of Burlington, North Carolina, was announced. The impact of the deal remains unclear for employees; the bid to purchase Covance is expected to close sometime in the first quarter of 2015 if approved by shareholders and regulators.

Fruth said he doesn’t believe the purchase of the company has an effect on the annexation that was approved, and the tax abatement deal with the city would likely be passed on to the new owner.

Covance had already been a water customer of the city’s for years, Fruth added. The company will continue maintaining the internal streets on Covance’s campus, Fruth said, while perimeter roads like Meridian and Davis will come under the city’s jurisdiction for maintenance and snow removal. The company was already in the Greenfield Fire Territory’s jurisdiction, Fruth added, but now city police, planning and zoning will apply to the area.

And while there are no immediate plans for further annexations along the southwest side of the city, Fruth said it does open up the possibility because Covance would no longer be a barrier for drawing contiguous lines.

“This allows the city to continue to grow around that area,” Fruth said.