Energizer Holdings occupies a space in this warehouse, seen in November 2019, near Interstate 65 on Franklin’s east side.
Daily Journal file photo
Tax breaks for three companies were been terminated by the Franklin City Council Monday for vastly different reasons.
For two companies — South Korea-based Daechang Seating Co. and St. Louis-based Energizer Holdings, Inc. — the abatements were terminated after city officials established the companies had not met the promises outlined in the agreement between the company and the city. Another company, GMI Corp., came forward and requested city officials terminate the abatement when they knew they could meet their goals for reasons outside of their control, said Dana Monson, community development specialist.
The council voted unanimously to terminate the three abatements Monday, after the companies were called to plead their case at the April 9 Franklin Economic Development Commission meeting.
None of the companies’ representatives appeared at the meeting. Monson has been in touch with representatives from GMI, but did not hear from the other companies ahead of the termination, she said.
The commission reviewed the tax abatements based on the financial records provided to the city, along with Monson’s fact-finding. The EDC unanimously forwarded recommendations to terminate the abatements to the council.
Daechang Seating
Daechang’s 10-year real property and 5-year personal property tax abatements were terminated because the company failed to follow through on its promised investment in a new Franklin stamping plant within two years of the abatement’s insurance.
The company had planned to build a $30 million stamping plant near 40 Linville Way but missed the December 2023 deadline to start construction for unknown reasons. The investment was supposed to bring 100 jobs manufacturing metal car seat components for the company.
“We’re having absolutely no luck with them,” Monson said, noting she has had no communication with the company.
The company also failed to maintain the 25-acre property they purchased, prompting more than $2,000 in fines for tall grass. Though the company failed to communicate otherwise, they did pay their fines, she said.
If Daechang does decide to go forward with the project, the company would have to reapply for this incentive.
“This is probably the first time that the city has really had this issue where a company just didn’t do what they were supposed to do,” Monson told the council at their April 1 meeting. “Under Indiana state code, you have to go through this process to rescind the abatement … because it’s been such a long amount of time. If they do want to come back and do this, they need to come back and explain to us what’s going on because basically, the parameters of the project would have changed.”
Energizer Holdings
Energizer’s personal property tax break was voided because the company outsourced its battery packaging operations to another state. Though the company is still shipping batteries out of Franklin through a partnership with DHL, the abatement was terminated because the equipment it helped the company purchase was for battery packaging operations.
Energizer announced last year the company would move battery packaging operations at its 180 Bartram Parkway facility, along with $22 million in equipment covered by their 2019 tax abatement, to North Carolina.
This move impacted about 100 workers, though many of them were able to keep working at the site for DHL, Monson said. Now Energizer has employees packing batteries at the out-of-state facility, with the packaged batteries coming back to Franklin to be distributed by DHL, she said.
Energizer had also been consistently behind on promised job numbers and investment, Monson said. Despite promising more than $50 million in equipment investment, the company only reached $22 million. The job numbers were estimated at 440, but the highest employee count reached was 223.
“They never fully met their compliance,” Monson said at the April 1 council meeting. “They were another one that had a December 2023 deadline to make that compliance — to meet those numbers fully — and they have not done so.”
The building remains occupied and the real property tax abatement granted to its developer, Sunbeam Development Corp., remains in place. The building has brought in more than $1 million in taxes for the city so far, said Mayor Steve Barnett.
GMI Corp.
GMI requested their personal property abatement be terminated because they have struggled to get replacement equipment after they were sent ‘inferior’ equipment by their vendor.
GMI was approved in 2022 for a $2.7 million equipment investment to upgrade its current facility at 700 International Drive. However, the equipment they received was “inferior” and the company is now in a legal battle with the vendor, Monson said.
Monson told the Franklin EDC GMI’s situation is different than that of the other two companies.
“I really, really do want to stress that this has absolutely nothing on GMI and this is not something that they have done to cause,” Monson said. “This was basically an issue completely out of their control. And I do appreciate their honesty in coming forward and telling us upfront, ‘Here’s what’s going on.’”
Company representatives told Monson they came forward to be honest and because they have a goal to reapply for an equipment abatement later. Because of the fluid situation with the vendor, the company representative was not sure when they would be able to reapply, she said.
“They still want this project to go forward,” Monson said April 1. “They’re going to go forward with a different vendor and or different circumstance and they would like to be able to come back and have a positive relationship with us.”
Other abatements
As part of an annual process, city officials reviewed finished their review of the city’s 52 active tax abatements Monday and the council found all companies but three in substantial compliance. The council OK’d found a dozen abatements in compliance Monday and previously found all other companies in compliance at their March 18 and April 1 meetings.
Compliance reports for all companies can be found online at franklin.in.gov/council/. Hyperlinks to the reports can be found on the agendas for last three council meetings.
