GOSHEN — Two companies which received tax breaks from the Goshen City Council have met the terms expected of them, while a third company has not for reasons beyond its control, council members decided earlier this week.
The tax phase-ins for the three companies were reviewed at a council meeting on Tuesday night, June 18.
The council investigated whether Supreme Corp., Benteler Automotive and Wieland Designs were complying with the goals for job creation and investment set for in their initial applications for the tax phase-in.
The council was charged with the task of either finding the business in substantial compliance, finding that they were not in compliance but for reasons beyond their control or finding them not in compliance and requesting that the business return at a future council meeting to further explain why they did not meet their targets.
A memo from Mark Brinson, community development director, noted Supreme Corp. was granted a tax phase-in in 2012. In return for the tax break, Supreme anticipated hiring 150 people, investment in new equipment worth $1,633,466 and investment in real estate improvements worth $2,145,647.
Through the time Supreme filed its application for the tax phase-in this year, they had already surpassed its three-year goal of $4,645,647 of real estate improvements, and far surpassed its 2012 goal of $2,145,647.
Supreme’s investment in new equipment was just shy of its stated goal for the year, coming in at $1,385,452. City officials have taken issue with Supreme’s creation of only 10 jobs compared with its goal of hiring 150 workers in 2012.
Matt Long, Supreme’s chief financial officer, said that since the filing, the company was up to about 50 new positions, which was still a significant number behind their projection.
He shared with the council that some of Supreme’s markets “stalled” late in 2012 with uncertainty surrounding the presidential election and fiscal cliff fears.
Severe limitations of state and federal help to cities to improve public transportation also had a significant effect, he added.
Five members of the council voted that Supreme was not in compliance, but agreed that it was due to economic issues that were outside the company’s control.
Two members, Jeremy Stutsman and Julia Gautsche, voted against that finding. They stated that Long’s explanation did not provide enough information to conclude that the failure to reach their job target was out of their control.
“It seems more appropriate for the council to find them not in substantial compliance and allow them to present their reasons why,” Stutsman said.
“I do think a very important part is jobs,” Gautsche said. “I have some significant questions. I’m not convinced it was all factors beyond their control.”
Mayor Allan Kauffman reminded the council that though jobs are important, they should not forget the importance of capital investment, which Supreme had clearly done even though the job numbers were far lower than expected.
The second business to be reviewed was Benteler Automotive, which far surpassed its projected hiring of 91 employees by actually bringing in 349 and investing just less than the amount the company expected for new manufacturing equipment.
Members of the council and David Daugherty, Goshen Chamber of Commerce president, consider Benteler to be in substantial compliance despite not quite reaching its goal for investment.
The council voted unanimously to find Benteler in substantial compliance.
Wieland Designs was also found to be in substantial compliance after far exceeding its projected investment in new equipment and coming in just under the goal for job creation.
At the time of the filing, Wieland had created 31 new positions but Jim Evans, vice president of administrative services, explained Wieland has had difficulty hiring people to sew seats,since it is very meticulous and the company hasn’t found many people in the area who have been able to succeed at the job. The goal was to have created 58 jobs by the time the company filed, but Evans added that Wieland has brought on approximately 25 employees since then.
Gautsche noted that the major issue seemed to have been resolved within a month or two of the filing, so she felt that they were in substantial compliance.
The council voted 6-1 to find Wieland in substantial compliance with its statement of benefits, meaning none of the businesses will have to return to the council this year to give any further explanation.