Burns Harbor and ArcelorMittal USA, the town’s largest taxpayer, tentatively
have struck a deal extending the steelmaker’s current tax breaks through
March 2, 2023 and in return Mittal will pay off almost $3 million in
outstanding municipal sewer bonds as they come due.
That will free up at least $500,000 a year for other town uses and capital
projects, and also could make available $1.3 million now held in reserve for
Meeting Monday, the town Redevelopment Commission and Town Council --- both
comprised of the five council members --- met for three hours discussing the
tax plan with Mittal attorney Larry Stroble of Barnes & Thornburg and town
attorney Bob Welsh.
Despite reservations and questions from board members Louis Bain, Toni
Biancardi and Cliff Fleming, divided votes led to adoption of required
abatement paperwork that later can be approved, modified or rescinded,
according to Welsh.
An advertised public hearing will take place July 13 at 7 p.m. on the
abatement extension for future installation of new manufacturing equipment,
which is set to expire in 2013. Mittal estimates annual capital expenditures
of $10 million to $20 million or more in the coming years to retain both its
competitive edge globally and its employment base of 3,500 to 3,900 workers
at the plant.
Also agreed Monday by the Town Council was to hire an Indianapolis attorney
who specializes in tax law to try to get in writing from the state
Department of Local Government Finance how it will deal with the $1.3
million. Town clerk-treasurer Jane Jordan said that could range from letting
the town spend it to making the town apply it toward the 2012 budget and
levy only a small amount in property taxes next year.
Redevelopment Commission member Jim McGee asked non-voting commission member
Ralph Ayres of the Duneland School Board, formerly an Indiana state
representative, to help cut through DLGF red tape. Ayres said the School
Board is closely studying the Mittal proposal and may comment at the public
Welsh told Ayres he sees no negative repercussions for the schools if
Mittal’s abatement extension is approved.
By unanimous vote the council authorized Welsh to engage a financial
consultant to assess the impact to the town of granting the Mittal abatement
extension. “They could find something we’re not seeing,” said Bain. Fleming
said the proposal could bring wonderful benefits but the town needs to be
sure there isn’t a hidden downside.
A key part of the abatement agreement is that Burns Harbor pledges for at
least 10 years not to place the entire Mittal plant in a tax-increment
financing allocation area where property taxes paid within that area would
remain with the town instead of being shared by about nine other taxing
units including Duneland Schools, Westchester Township Public Library and
Porter County assessor Jon Snyder and his attorney, Chris Buckley, attended
Fleming noted by prohibiting the town to TIF the steel plant, that takes
away potential tax dollars that could be used to develop town infrastructure
called for in the Burns Harbor comprehensive plan to fund general operations
and promote the community live/work/play concept.
The hope is that all consultant reports will be in hand for the July 13
council meeting as well as answers fielded through Welsh to multiple
questions asked last night. The next $58,796 bond interest payment is due
July 15 and the $633,796 principal payment Jan. 15, 2012. The bonds are paid
off Jan. 15, 2016.
The council/commission apparently has been discussing the Mittal proposal
for some time although not publicly until Monday. The Redevelopment
Commission hasn’t met since October, 2010. Fleming said members just
received their copies of the Mittal documents Friday. “We should move as
quickly as possible on an opportunity that could be in our best interest,
but it should be based on an informed decision.”
McGee called the proposal a win-win situation. Councilman Mike Perrine
described it as Mittal’s show of good corporate citizenship; he also said if
the DLGF balks at the town’s plan, maybe Mittal could place the intended
bond payment money in a non-reverting donation fund instead.
Bain said no one was saying tax abatement is bad, but things were being too
rushed. Welsh said copies of the Friday documents already had been amended
and he pointed out those changes.
Biancardi had several questions, including what will happen to the $1.3
million, but she voted to advance the abatement proposal on the
understanding any votes taken Monday can be undone, partially undone or
reaffirmed July 13 or even continued with no decision following the public
Perrine said despite the fact some people feel Burns Harbor has a God-given
right to have Mittal dump tons of money in taxes and pay 85 percent of the
town’s bills, that won’t happen unless the town works with Mittal to help it
remain competitive and stay here.
McGee opened the Town Council portion of the meeting stating he is an hourly
Mittal employee on medical leave and in his nine years in public office he’s
worked with all local businesses. “All my interest is toward the town.” As
council president McGee signed the previous abatement documents in 2003 for
then-owner ISG Burns Harbor.