A tax abatement request by Chiyoda USA proved anything but routine when the Greencastle City Council considered the measure during lengthy discussion in two stages Thursday night at City Hall.
“This is not our usual tax abatement,” Council President Adam Cohen said right off the top of the public hearing portion of the meeting.
“It’s a little more unique request this time,” agreed Greencastle/Putnam County Development Center Director Kristin Clary.
When the smoke cleared, the Council ultimately granted the abatement for a Chiyoda project scheduled to begin yet this month at the Greencastle plant at 2200 E. State Road 240. The measure passed by a 5-1 margin with Dave Murray casting the dissenting vote.
Not a physical plant expansion, the project will add an estimated $11 million in capital investment at the existing plant while creating 60 new jobs while and retaining 346 positions.
At issue Thursday night were $42,000 in training dollars Chiyoda saught to go along with the abatement request.
Instead of the typical sliding scale in which tax is abated at 100 percent in year one and drops by 10 percent each succeeding year until 100 percent of taxes are paid in year 11, Chiyoda requested 100 percent abatement each of the first three years in order to fund the training necessary for suppliers of products to Subaru at Lafayette.
Allowing those two extra years to be abated at 100 percent would result in $42,000 extra for Chiyoda to use for training as it plans to take 60 entry-level employees and train them to move up to higher-skilled positions. In turn current temporary workers would move into those entry-level jobs and become permanent employees.
“We’ve never had this situation before,” Clary said. “Oftentimes training dollars will be given to the company by the State of Indiana through Indiana Economic Development Corp. (IEDC) training dollars. They give those when the project is competitive, if we were competing against another state (for the jobs).”
However, since Chiyoda only operates plants in Indiana, the proposed expansion is not a competing project against other states, Clary pointed out.
Dana Kyle, Chiyoda Human Resources manager, explained the need for training.
“Basically when Subaru launches a new project,” she said, “it involves a lot of different training, a lot of different skills. Subaru has certain requirements, like three people being completely trained on each project, which takes a lot of manpower, and we need our more skilled associates at that point.”
Mayor Bill Dory noted that the training would come in areas such as machine operations, assembly techniques and quality control.
The training would allow the entry-level workers to get a bump in their hourly wage, which for many is $12 per hour. Their pay would got to $15-$17 per hour with the training, Clary noted.
As a member of the public, Danny Mescher used the hearing to ask how Chiyoda was going to fill 60 more positions when it already has 60 jobs that are unfilled. He also asked how many new employees will be coming from the local area.
Of course, that number is impossible to determine at present, although Councilman Tyler Wade noted that Chiyoda’s information lists that 170 employees of the 629 (fulltime and temporary) at the Greencastle plant come from the 46135 zip code, while overall 220 are from Putnam County, making it more than one-third from the county.
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