Seymour Engine Plant received the city’s official stamp of approval on plans for a major expansion here for the second time in two years.
Seymour Common Council gave a unanimous thumbs up Monday night to the engine maker’s request for tax abatements on planned investments totaling $71.1 million.
The first phase of the project includes $3.65 million in new manufacturing equipment and $20.7 million in research and development equipment as well as $46.7 million in real estate improvements, said Jim Plump, executive director of Jackson County Industrial Development Corp.
Plump spoke on behalf of the company in seeking the abatements.
Cummins announced April 24 its decision to more than double the size of its operations at the Seymour Engine Plant at a cost of $219 million. The expansion will create nearly 300 new high-paying jobs.
The project will expand the plant’s technical center, adding new product test cells, a new assembly line and paint area. Construction started Wednesday and will continue over the next three years.
Installation of new equipment is expected to begin June 1 and be completed by February 2013.
Plump said the abatements are for the “first part of the investment,” which accounts for 110 of the 290 total jobs being added.
The abatement gives the company 10 years before it has to begin paying full property taxes on the expansion, with the first year of taxes being 100 percent exempt. By year five, Cummins must pay 50 percent. That amount increases each year until they are paying the full amount.
Tax abatements are a tool the city uses frequently to get companies to stay and grow locally. Every year Cummins and all other companies receiving tax abatements must come before the council to present a detailed compliance with statement of benefits, showing how much money was actually spent on equipment and improvements and how many jobs were created or retained.