Kokomo — Delphi Automotive System LLC is seeking a $50 million personal property tax abatement on new equipment to be installed at its Kokomo facility.
Monday, the Kokomo Common Council will consider two preliminary resolutions: One to establish a preliminary economic revitalization area and one to grant a five-year abatement on personal property taxes.
Debbie Cook, director of development, said final passage of the resolutions would take place on April 26.
The company intends to retain 72 jobs with a total annual salary of $6.75 million and create 118 positions with a total annual salary of $7.53 million. The average salary for the retained jobs is $93,750 and the new positions will average $63,800, according to documents provided to council members.
The abatement is for power electronics equipment, surface mount equipment, final assembly equipment, solder machines, functional testers, laboratory and test equipment for electronics manufacturing equipment.
The start date for the manufacturing equipment was in January, for IT equipment it was April 1 and for research and development equipment in January 2011. All three projects are scheduled to be completed by in January 2014.
A memorandum of understanding signed by Kokomo and Delphi indicates that should the number of jobs or payroll fall below 10 percent, the company will be required to repay the abated taxes.
The council tabled the two resolutions at its last meeting. Cook said the resolutions were tabled because research and development and manufacturing are taking place at different locations.
“We have had clawbacks in the memorandums of understanding for several years,” she said. “They are pretty standard, we clarified the language.”
The abatements are a key component to bringing a new research and development facility for electric vehicle technology to Kokomo.
Last year, Delphi received an $89.3 million U.S. Department of Energy grant to produce electric-hybrid technology in Kokomo.
Delphi is matching the grant — up to $178.6 million — representing a three-year investment to advance the development of low-cost manufacturing of electric-drive vehicles in the U.S.
To accommodate the project, Delphi officials announced plans in December to expand the company’s technical base in Kokomo and to establish a new production facility.
A global supplier of electronics for the automotive and commercial vehicle industries, Delphi is expected to invest more than $59 million in the project as a whole. The city is offering a five-year abatement on $50 million in new personal property at the facility.
Plans are to lease and equip an empty 90,000-square-foot facility at 1501 E. 200 North, and also to utilize some of the company’s existing manufacturing and R and D space on Lincoln Road.
Delphi currently employs approximately 1,196 at its Kokomo Electronics and Safety division. Over the next five years, Delphi plans to add 95 engineers at its technology center, which will increase its engineering department to more than 300.
Company officials said they plan to hire 40 people at a facility where power electronics will be manufactured, and by 2015, employment there will be around 95 jobs.
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