Most companies in Franklin with active tax abatements are doing better than they have since the pandemic.
Three companies, however, are under scrutiny and could soon have their tax abatements revoked, a city official said Monday.
As part of an annual process, the city council found 29 companies in substantial compliance Monday but were put on notice about three companies that are not following through on promises made to the city. Franklin has a total of 52 active tax abatements and officials are still in the process of reviewing the remaining abatements, said Dana Monson, community development specialist.
The council did not take action Monday on the abatements for the three companies that are not substantially compliant. The companies have been asked to go before the Franklin Economic Development Commission — which evaluates tax abatements and makes recommendations to the council — on April 9 to answer questions. The EDC will then send a recommendation to the city council for final action.
Noncompliant companies
The reasons the companies are out of compliance vary widely. GMI Corp. is having an issue with equipment, Daechang Seating Co. failed to follow through on their investment Franklin and Energizer outsourced their battery packaging operations to another state, Monson said.
GMI’s tax abatement, which was approved in 2022, was 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.
GMI representatives told Monson what was going on and requested to cancel the abatement for now, with a goal to reapply for an equipment abatement later, she said.
“They still want this project to go forward,” Monson said. “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.”
Daechang 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.
The company also failed to maintain the 25-acre property they purchased, prompting fines for tall grass. The company hasn’t been in contact with Monson about the status of the project, but did pay their fines, she said.
“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 said. “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 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, which continues to ship out Energizer batteries from the facility, 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.
The company 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. “They were another one that had a deadline of December of 2023 to make that compliance — to meet those numbers fully — and they have not done so.”
The building remains occupied and the 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.
Compliant companies
Since 2020, companies have been reporting to city officials troubles with finding and keeping employees. They’ve also reported difficulty getting the equipment or materials they need to fulfill promises made to the city.
More companies seem to be turning the corner this year. Hiring and investment numbers are much improved, Monson said.
“Overall, it seems that our companies have been doing really well,” Monson said. “They are doing much better in their abilities for hiring, (but) we have several who are having trouble hiring. They might be lower in their (hiring) numbers, but they’re better than they were. Definitely, wages are up across the board. Investments are up across the board as well.”
Council member Shawn Taylor says the numbers businesses put up last year are the best he’s seen in his four years serving on the EDC.
“This was the first year that we haven’t really had to deal with time, with ‘can’t find people because of COVID,’ supply chains, that type of thing,” Taylor said. “The companies, money-wise, they’re paying a lot more than what they had (told us they would); anywhere from $4 to $8 to $10 more an hour. There are a lot of really good success stories in there as well; like B2S Life Sciences and some of those that are just out the roof as far as what they’re paying.”
