A South Korean manufacturer has secured two local tax incentives worth $2.5 million to build a Franklin stamping plant and add 100 new jobs.
The Franklin City Council approved a 10-year real property tax abatement and a five-year personal property tax abatement for Daechang Seat Company on Monday.
Based in Dongtan, South Korea, the company has manufacturing facilities in seven countries. The Franklin plant will be the company’s third in the United States, said Tim Conrad, an economic development consultant for the company.
The Franklin plant will do metal stamping work and support the company’s other U.S. locations in northwest Indianapolis and Phenix City, Alabama, he said.
The company, which manufactures metal seat components for Subaru, Hyundai and Kia, plans to invest $30 million to build a 250,000-square-foot plant on 25 acres near 40 Linville Way, which will be the new headquarters for G and H Orthodontics.
The tax abatements incentivize a $15 million real property investment to construct the building, and a $15 million personal property investment in manufacturing equipment, according to city documents.
The abatements together would save the company $2.5 million, according to an estimate. The 10-year real property abatement would save $1.9 million in taxes, while the five-year personal property abatement would save $538,000.
The company would still pay $2.5 million in real property taxes, and $361,800 in personal property taxes, the estimate shows.
The incentives passed with unanimous support from the council members present after being forwarded with a unanimous favorable recommendation from the Franklin Economic Development Commission on June 8.
The company would also pay a 2% economic development fee to the Franklin Redevelopment Commission, which can be used for future improvements in the city’s TIF districts, city documents show.
A hiring timeline submitted to the city shows 100 jobs will be created by the last quarter of 2024, with 25 jobs to be created in 2022, 50 more in 2023 and the final 25 in 2024.
The jobs will pay, on average, $17.50 an hour, plus benefits. That includes 90 manufacturing jobs with an average of $16.30 per hour, and 10 management jobs at an average of $28.30 per hour, city documents show.
Depending on building material availability, the company and developers hope to start construction early next year, and begin operations by the fourth quarter, Conrad said.
The proposal came to the attention of the Franklin economic development team with a referral from the Indiana Economic Development Corporation, said Dana Monson, community development specialist. Aspire Johnson County also helped attract Daechang to the city, she said.
“This truly a team effort. They had been searching statewide … They found the Linville Way site and pretty much narrowed it down to here and another place. They liked what they saw in Franklin,” Monson said. “One of the advantages we had is the labor (market). We all know that labor is tight here, but it is tight everywhere. Companies are investing in their companies and finding their employees here, we draw employees from a broad area.”
No state incentives have been finalized for the new Daechang location, said Erin Sweitzer, spokesperson for state economic development corporation. Since negotiations are confidential, she could not say if any incentives are in process for the Franklin facility.
The state gave Daechang conditional incentives in 2017 for its Indianapolis facility.