ST. JOSEPH — St. Joseph city commissioners on Monday approved two tax incentive packages for commercial office rehab projects, and said they want to build a better system for considering such requests.
“I think having a robust process for evaluating these is a good idea,” said Commissioner Lynn Todman before the unanimous vote to approve the requests from United Federal Credit Union and Fiskars Properties.
The credit union plans to invest $9.6 million in its building at 150 Hilltop Road, purchased from Whirlpool Corp. this year. Fiskars will be putting in $1 million in office space at 500 Momany Drive.
The Commercial Rehabilitation Certificates approved by commissioners will freeze the property taxes at their current value for up to 10 years. School taxes are not affected.
The vote had been postponed for one week to allow commissioners additional time to study the proposals.
Commissioner Peggy Getty, who, along with Commissioner Laura Goos, requested the delay, said she had learned that companies approved for the tax exemptions must present an annual report on their progress. She suggested that this report be presented to commissioners.
She also recommended study sessions to look at how tax incentives are structured.
Commissioners spent more time debating a tax increase for the library than it does on tax abatement requests, Getty said.
Mayor Mike Garey called the rehab projects “a win-win.”
“If they succeed, we all succeed,” Garey said of the companies looking to expand.
United Federal Credit Union says it expects to create 106 new jobs and retain 300 current positions. Eric Fiskars wants to modernize the office space for a potential tenant with 35 employees, and will create 10 new jobs.
Cathy Tilley, with Cornerstone Alliance and representing the credit union and Fiskars, said those employees will contribute to the local economy by buying food and gas and eating at restaurants.
Tilley said the request is for an exemption, and not an abatement, because the city will continue to collect its current taxes.
Fiskars said companies need up-to-date office space to retain employees. His building has been vacant since 2009.
“The new tenant is the beneficiary,” Fiskars said. “It’s all about taking care of employees and keeping them in the community.”
Some residents were skeptical about the incentives.
Karen Laetz noted that the UFCU package totals $87,400 a year in tax abatements for the city, calling this “a very significant decision.”
The incentive for Fiskars totals $9,150 a year in tax savings.
Laetz also was doubtful about the 10-year life span of the tax incentive. “Ten years is a long time to give someone without keeping an eye on it.”
Resident Al DiBrito, a candidate for city commission this year, pointed out that Garey is a board member of Cornerstone Alliance, which he said had not been previously disclosed.
Another resident noted that Todman’s husband is also a Cornerstone board member.
Garey said that Cornerstone is only handling the paperwork for the requests, and that the applicants are the companies.
Todman said she does not keep up with her husband’s board activities, and that they have a strict household policy not to share information.
DiBrito also questioned whether Cornerstone’s economic projections were reliable, and he said there could be additional costs for city services due to the new employees.
Commissioner Jeff Richards said he was glad to have the decision in the hands of St. Joseph, and not somewhere else.
“This is a tool to enhance the business environment,” Richards said. “It has worked well in the past, and it will work well in the future.”
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