Franklin approved a $6,300 tax break for a small business last week.
Mooresville-based Overton Industries – Tube Forming Systems requested a five-year personal property tax abatement to purchase equipment worth $247,068 for its Franklin facility at 2155 McClain Drive. The company would hire one new employee to run the equipment.
Franklin’s economic development staff recommended approval of a three-year abatement for the equipment, but the Franklin Economic Development Commission voted on Jan. 11 to forward the proposal to the Franklin City Council with an unfavorable recommendation. When going over the statutory requirements for an abatement, the commission didn’t find the totality of the investment was enough to merit a tax break.
Scott Buie, CEO of Overton Industries, made his case last week and convinced the city council the small business’s investment is worthy of a tax break.
Overton was founded in 1986 and opened its Franklin facility in the early 1990s. The company expanded in Franklin twice to reach its current 30,000-square-foot building with 37 employees.
After years in the community, Buie had hoped the city would reward a small business that wants to keep growing here, he said. Though the abatement won’t save the company a ton of money, it does make a difference for a company that size.
“From our standpoint, I kind of caution as to what that says to small businesses that are coming into town and making investments in the community. You know we have high-dollar positions and people who make careers out there. These aren’t just jobs that are come and go. It is $80,000 to $100,000 positions for some of the positions we have — engineer, programmer, precision machinists,” Buie said. “I know it isn’t an Amazon warehouse level of investment, but we have put millions of dollars into this community and felt a three-year abatement was something that would go through. A $247,000 investment is a pretty significant investment for a company our size.”
With the savings, Overton can support recruitment efforts, which is tough in today’s employment market, he said.
The company commonly recruits interns from Central Nine Career Center in Greenwood and Area 31 Career Center in Indianapolis. They seek to retain the interns after high school and offer to pay their tuition for community college trade programs, Buie said.
Mayor Steve Barnett said he supports a three-year abatement because of Overton’s investment in the community, and because he knows Buie plans to stay in Franklin as long as there is room to grow.
Though the abatement creates just one job, Barnett pointed out the council has approved personal property abatements in the past that created no jobs.
“I see the point of not wanting to set a precedent, but I do know in the past there are companies who came in to ask for an abatement for equipment and there was not a count of employees attached to it,” Barnett said.
The new job will pay about $23.50 per hour, according to city documents.
Council members said they were torn about the abatement. While they agree with the economic development commission that the investment is smaller than something they would normally give an abatement for, they also wanted to reward a small business for investing in Franklin.
Council members also said it was hard to vote against the recommendation of the commission, given how much work they put into evaluating the abatements.
In the end, the five council members present unanimously approved the three-year abatement.
The abatement will save nearly $6,300 over the three years, and the company will still pay more than $3,900 in taxes on the equipment during that time. The company will also pay an economic development fee to the economic development commission that represents 5% of its abatement savings.
Overton has an existing 10-year real property tax abatement that was awarded in Dec. 2016 for a 10,000-square-foot building expansion the company completed in 2018. At the time the abatement was issued, Overton had 42 employees and pledged to create 10 more jobs. However, a downturn in sales during the pandemic resulted in some employees leaving the company due to lack of work hours, Buie told the economic development commission during its April 2021 annual review of the company’s tax abatement compliance. Before the pandemic took its toll, the company had 48 employees, he said.
At the time, Buie said the company was seeing its sales numbers go back up, and the company was looking to hire three people to add to its staff of 37. Though the company was behind on job numbers, the commission found the company was in substantial compliance, given the circumstances.
Documents filed with the city for the new personal property abatement indicate the company still has 37 employees.
