The Peru City Council approved a five-year tax abatement for Snavely Machine and Manufacturing at its meeting Monday evening.
Brooke Robertson, director of business retention for the Miami County Economic Development Authority (MCEDA), said the company would “make an investment of $4.5 million in equipment, maintain its current number of employees at 128 and add 16 more.”
The abatement for the equipment is at 70 percent for the five-year duration, which Councilman Gabriel Greer, also a member of the incentive committee, said allowed the city to “start receiving money from the investment year one.”
In total, the city is expected to earn about $184,000 in property taxes over the five-year abatement.
“We had some more latitude to do the percentages in a schedule we found beneficial to us,” he said. “Traditionally, you start out with 100 percent abatements and the city wouldn’t receive any money. According to how many years the abatement was, additional percentages came in and we started to receive money. It’s also the assessed value of the equipment changes over the years too, so we’re getting more money on the first year when it has the full value.”
However, MCEDA Executive Director Jim Tidd said the abatement was actually a 10-percent increase than the normal stair-stepped abatement of going from a 100-percent abatement and decreasing 20 percent each year.
He said that process would have the abatement at 60 percent, but said that the council had to “recognize that you’re getting some of that money from the start.”
Greer said the abatement they agreed to was “kind of a nod that we are getting money right off the start.”
“The way money is going right now, we’d just like to see a little bit up front,” Councilwoman Phyllis Torrence, also a member of the incentive committee, said.
Snavely President Joe Kenny said the equipment was to allow the company to work with different automotive manufacturers.
“We’re trying to diversify,” he said. “Automotive manufacturers are updating their lines to be more fuel efficient. We’re just being able to take advantage of it.”
He said the 16 jobs were “a minimum as far as production employees that as these phase in, it will continue to increase because it phases in through 2017.” He also said it didn’t include “indirect labor that we’ll have to add, such as supervision, setup, documentation, quality and those types of things.”
“This is a big thing for us and the city as far as jobs are concerned,” Kenny said.
Greer said that Snavely had “often come up with more jobs than they predicted for us.”
Kenny said that when he first came to the company 13 years ago, it had 30 employees.