GAS CITY -- Despite Echelon Furniture’s recent closure and bankruptcy, most businesses that have received tax breaks from Gas City government have hired more employees than they projected, records show.
Echelon Furniture projected having 132 employees when the company received a tax abatement on equipment in 2012 but was down to 87 employees this spring, according to the company’s last tax abatement compliance form. But every other Gas City-based company that completed a compliance form this year has met or exceeded its projections.
“That does not surprise me. It’s very pleasing,” Gas City Mayor Larry Leach said. “I can go out and look at (American Woodmark’s) parking lot and see how they’ve expended.”
Leach said he was unable to pinpoint the cause of the success of local companies like American Woodmark, but Grant County Economic Growth Council Executive Director Tim Eckerle cited two factors.
“The general shape of the economy is improving,” Ecklerle said.
Additionally, local companies have historically tended to be “very conservative” when estimating how many employees will be hired as a result of expanding their facility or equipment, and the Growth Council encourages the practice, Eckerle said.
The Growth Council, a Marion-based nonprofit, often serves as a liaison between companies seeking tax abatements and the local government that grant them. County, city or town councils vote on whether to grant new abatements or continue existing ones.
State law requires companies with active tax abatements to file a compliance form annually to help officials determine whether the companies met their goals and whether their abatements should be continued.
This year, four Gas City companies submitted compliance forms but failed to specify the estimated or actual numbers of employees.
Shoe-Inn Properties, which owns the property that houses Hometown Animal Hospital, listed 10 current employees but did not list how many employees the company originally estimated. The city council signed off on the abatement, however.
Three businesses did not list estimated or actual numbers of employees: Gas City Medical Center, Kay-Bee Corp. and Oasis 22. Their compliance forms indicate the companies share the same P.O. box address and same contact person, B.D. Patel. No boxes are checked on the companies’ forms to indicate whether council members consider the companies to be sufficiently compliant this year.
Neither the Shoe-Inn Properties contact, Brian Dill, nor Patel could be reached for comment late Thursday.
Leach said that to him the number of jobs by which most companies exceeded their hiring estimates this year justifies Gas City granting their tax abatements. He also stands by abatements as an economic development tool that helps the city better compete with other communities trying to attract new businesses.
“To get a business to even look at it, we’ve got to put an incentive package together,” Leach said. “It’s a very competitive business.”