TIPTON —
Another step in the opening of the former Getrag Transmission Plant in Tipton County was cleared when the county council approved a 10-year tax abatement for Chrysler Group LLC.
The council Tuesday approved the 10-year personal property tax abatement request by Chrysler on the grounds that the automaker is making a $162 million investment in the 800,000-square-foot building at the intersection of U.S. 31 and Ind. 28.
Intending to manufacture nine-speed transmissions at the facility, Chrysler plans to eventually create 850 new jobs in the community. The plant is expected to begin production in 2013.
Council members unanimously approved the resolution.
“I’m tickled to death this opportunity came back to us,” Councilwoman Beth Roach said. “This will be a great partnership.”
Attorney Rick Hall, who represents the county, said the area has already been designated as an economic revitalization area and no public hearing is required.
Chrysler officials indicated the company was still in negotiations with W.W. Reynolds, owner of the building. The asking price when the facility went back on the market earlier this year was $39.5 million.
To meet the federal fuel economy standards that phase in starting in 2016, the company is changing the powertrain line-up to include engines and transmissions, said Brian Harlow, senior manager of powertrain operations.
“We’re moving into new transmissions with eight and nine speeds to improve engine performance,” he said.
Harlow said Chrysler has experienced 32 consecutive months of increased sales to an estimated 2.4 million in 2012.
“We’ve run out of room in Kokomo,” he said. “We need to expand production facilities quickly.”
The Tipton project is in conjunction with the expansion of Chrysler’s powertrain manufacturing operations in Kokomo.
The Kokomo Common Council Monday approved a 10-year tax abatement for the company, which plans to invest $212 million in Kokomo, creating 400 jobs and retaining 3,400.
The 10-year abatement in Tipton County is not following the standard abatement schedule, which is generally a 100 percent abatement of taxes in the first year and increases by 10 percent until the total tax bill is paid after a decade.
The Tipton County abatement schedule starts at 41 percent the first year and gradually decreases to 6 percent of the taxes in the ninth year.
The abatement is worth $2.5 million over the 10 years.
Hall said the percentages provide the county the security to repay bonds issued for utility (water and sewage) at the site several years ago.
Tipton County is paying off $4.6 million in bonds through revenues generated by Tax Increment Financing and Economic Development Income Tax revenues.
This is the second time that Chrysler has been involved in the facility. It was announced in 2007 that Chrysler and Getrag Transmission were going to invest $580 million in the facility to manufacture transmissions.
That partnership ended in 2008 and the building was purchased by Reynolds in 2010. It had hoped to sell the facility to Abound Solar.
Abound Solar planned to manufacture solar panels, but declared bankruptcy earlier this year.
Local News
Tipton approves Chrysler tax break
Automaker plans to create 850 new jobs.
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