This is the main point which Chesterton Town Attorney Chuck Lukmann wants to
make: “Not one dollar of Chesterton taxpayers’ dollars are being used” for
Urschel Laboratories’ new corporate headquarters and manufacturing facility
at Coffee Creek Center.
This is the secondary point: “The project does not involve any financial
obligation or guarantee by the Town of Chesterton.”
As Lukmann told the Chesterton Tribune this morning, however, the
town’s arrangement with Urschel Laboratories Inc. is a fairly complex one.
It will work in this way.
The newly reconstituted Economic Development Commis-sion will — per state
law —issue up to $25,860,000 in tax-exempt bonds. Urschel Laboratories will
then purchase the whole of that issue. For the 20 years following the
completion of the project, the company will repay those bonds with 85
percent of the taxes on real and personal property which it would
have paid to the town as a property owner in a tax increment financing (TIF)
In that sense, the arrangement is like tax abatement. Except it’s not.
Because Urschel Laboratories will use a large portion of the $25.8 million
to install infrastructure: $3 million for a bridge over Coffee Creek, to
make the site accessible in the first place; some $2 million for sewer and
water infrastructure; and an unknown amount for road improvements.
In other words, Lukmann said, a large portion of that $25.8 million will be
used to install infrastructure which the town itself might have had to build
to make that property developable.
Over those 20 years, Lukmann added, the town will nonetheless receive
an estimated $4,566,455 in property tax revenues from Urschel
Laboratories—that is, the 15-percent balance of the company’s tax
obligation—which the town would not have received had that property remained
Although the property in question is located in a TIF district—under which
the town alone normally captures the whole of the increment—under a
relatively recent change in Indiana Code, the Duneland School Corporation
will also receive its increment during the seven-year lifetime of the
new property-tax referendum. Lukmann estimated that total amount at
$822,000. “Those are moneys which would otherwise have been captured by TIF,”
Lukmann made this point as well: while Urschel Laboratories is under
contract to purchase a total of 160 acres in Coffee Creek Center, it will
only be using 40 to 50 acres of that purchase for the HQ and manufacturing
facility. It’s unclear what Urschel Laboratories will do with the other 120
acres but should, one day, it market that land itself, the buyers of those
120 acres will not be party to the company’s arrangement with the
town. “The Town of Chesterton’s TIF district will receive all increment
captures on that development,” Lukmann said.
“This is a world-renowned company locating in Chesterton that will
undoubtedly lead to other high-quality economic development projects which
will provide additional high-quality jobs to Chesterton and Northwest
Indiana residents,” Lukmann noted.
What kind of trickle-down impact is Urschel Laboratories’ re-location to
Coffee Creek Center likely to have?
For one thing, Lukmann said, “the town has asked of Urschel, when they do
new hires in the future, and consistent with state and federal law, to give
a preference to Chesterton residents.”
That’s well and good but Heather Ennis, executive director of the
Chesterton/Duneland Chamber of Commerce, believes that she has some
relatively hard numbers to put on the table. The “induced effect” of the
company’s payroll alone—the “spending power” of its 300-plus employees—Ennis
estimated at $10.9 million recycling into Porter County’s economy on an
Now that “induced effect” is already in place, of course—Urschel
Laboratories has been in business in Valparaiso for 100 years—but some of it
could begin to flow northward into Duneland.
The “indirect effect” of the $65 million project, though, is enormous. Over
the construction period, Ennis said, a projected $26.6 million, over and
above that $65 million, will bubble into Porter County’s economy. And during
that construction period, an estimated 109 jobs will be created:
contractors, utility workers, fast-food employees, retail.
For these benefits, Lukmann emphasized, the town “is incurring no financial
obligation and is not using $1 of property owners’ tax money as an
At its meeting at 6:30 p.m. today, the newly reconstituted Chesterton
Economic Development Commission will take the first steps to implementing
the bond issue, with an “inducement resolution.”