The Greenwood City Council terminated a tax break and changed course on another termination Monday night.
In a unanimous vote, council members voted to terminate a $379,356, 10-year tax abatement on personal property, including heavy machinery, given to Arbonne International, LLC, in 2006. Arbonne officials did not object to the termination.
Council members also unanimously voted against terminating a $7 million, 10-year tax break for MREIC Indy In 3, LLC, after company officials came forward to make their case against termination.
Arbonne International
Arbonne, 800 Commerce Parkway West Drive, originally agreed to hire 435 workers over a 10-year period, along with a certain amount of wages and capital investments, in exchange for the tax break, according to city documents.
However, Arbonne did not hold up to its end of the agreement, city officials say. In the company’s most recent CF-1, representatives reported 46 employees. This is about 90% below what the company promised, city officials said last month.
Last month the Greenwood CF-1 compliance committee recommended the city council find the company in noncompliance and terminate the abatement. The city council voted to find the company in noncompliance and set a public hearing for Monday to allow the company to respond.
During Monday’s city council meeting, Jeff Stemerick, an attorney representing Arbonne, told the city council that the company wants to have a positive relationship with the city and Johnson County and is “heavily invested” in the long-term success of its Greenwood location.
“Just recently, for example, on Sept. 11, Arbonne instituted an across-the-board pay increase for employees in this Greenwood worksite,” he said.
Stemerick said company officials believed they had complied with the terms of the abatement and submitted the required CF-1 compliance forms as they were required. Officials were also aware that the original abatement expired in 2016, and had no objection to ending it.
Members of the city council took issue with his statement that the forms were filed. Arbonne officials said they had been submitting it year after year, however, the city, along with the city council’s resolution, says that wasn’t properly filed from 2012 to 2022.
“I’ve got the ones that were submitted here in my file,” Stemerick said in response.
City attorney Shawna Koons said that the forms were not submitted to the city because if they were, the city would have acted on them, and there is no record that this took place or that the city council signed off on the forms.
“They were directly filed with the county but they didn’t go through common council for approval,” Koons said.
Stemerick then said the forms were filed with a local municipality that “might have” been the county. He was unsure why they weren’t submitted to the city, he said.
Council member David Hopper asked Stemerick if Arbonne received the abatement in the years in which the paperwork was filed with only the county and not the city. Stemerick said he believed the company did.
“That’s not how it’s supposed to work,” Hopper replied.
Council members asked if there was something that could be done to prevent a situation like this from happening again.
“We need a check somewhere that says ‘Hey we haven’t received this,’” Hopper said.
Koons told the council that officials will explore the issue to see if something can be done to prevent this from happening again. Council president Mike Campbell also chimed in, saying that he believed it was part of the responsibilities of the city’s CF-1 compliance committee that was put in place. The committee’s responsibility is to make sure things like this don’t fall through the cracks, Campbell said.
MREIC Indy In 3
MREIC is the current owner of a 615,000-square foot warehouse located along South Graham Road in Greenwood that is being leased to Amazon. Officials were expected to invest $45 million for real estate improvements and $35 million in machinery and equipment.
The deeded owner of the land, MREIC Indy IN 3, was found in noncompliance of the original tax abatement agreement and was facing termination because the company did not file a compliance form for next year’s tax benefits, and because someone had filed a commercial property appeal for the parcel of land granted the tax break, city officials say.
The city was never informed of the appeal decision, a violation of the terms of the agreement. The company also did not respond to city officials’ inquiries, city officials said last month.
During Monday’s city council meeting, David Webb, industrial portfolio director for Industrial Logistics Property Trust, told the city council that they were first made aware of the issues following news reports last month. The trust is the owner of the land.
After speaking with their own employees and Amazon, along with checking their records, trust officials discovered Amazon incorrectly filed a request for the property appeal, Webb said.
Webb also told the council that the trust was unaware that the CF-1 needed to be filed. The trust had bought MREIC earlier this year, and this information wasn’t communicated.
“Unfortunately this fell through the cracks,” Webb said. “… We do have this on our radar as we move forward.”
Webb asked the city council to continue allowing the company to receive the tax break. City officials later confirmed that Amazon had formally withdrawn its appeal.
Koons told the council that Amazon, as a tenant, had a personal property tax break, which was up to date. She did not know what the nature of the review was other than it appears to now be a mistake.
Webb later informed the council they had the completed CF-1 in hand and gave it to them. According to the form, the company had exceeded both jobs and salary commitments, Campbell said.
Because the company is still considered in noncompliance, the city council will introduce another resolution at its next meeting to waive the compliance, officials said.
