At $500 million, it’s been touted as one of the county’s largest-ever economic development projects, but the size of the public incentive package initially proposed had threatened its fate.
It all came to a happy ending Tuesday night for the developers when the St. Joseph County Council unanimously approved a development agreement and property tax abatement for the proposed St. Joseph Energy Center natural gas-fired electricity plant near New Carlisle.
To put the project’s scope in perspective, county Economic Development Director Bill Schalliol said the AM General plant in Mishawaka was valued at $250 million when it was built, and Saint Joseph Health System’s Mishawaka Medical Center cost $200 million.
County and New Carlisle town leaders said they’re excited not only for the 20 full-time permanent jobs at the plant paying an average $95,000 annual salary but the estimated 500 construction jobs for local contractors over three years. They also welcome the economic development they hope will follow the plant in that part of the county, which will receive a new water treatment plant and improvements to drainage ditch and sewer infrastructure, paving the way for other industrial users to tap in.
There’s also the new property tax revenue.
“Right now the county earns a little over $6,000 a year on the property,” said St. Joseph Energy spokesman Lou Pierce. “When this is all said and done, it’s going to be $100 million over the life of the property to the county that the county’s never had before. We’re really lucky to have this plant here.”
It’s unclear how close the project ever came to dying, but it certainly hit some snags. The developer, White Plains, N.Y.-based Development Partners LLC, had been seeking about $72 million in incentives — $58 million in property tax savings and a $13 million bond issue to help fund construction of the water treatment plant.
Under the initial proposal, it would have taken at least 15 years for the county as a whole to receive any new property tax revenues from the project. That’s because any property taxes that weren’t abated would have first gone to repay the bond issue, and what was left would have been captured by a tax incremental financing district for infrastructure improvements in the immediate area.
The project had been set for a final council vote Sept. 8 but the developer pulled it from the agenda because several county officials felt the incentives were too large.
After more negotiations, the developer agreed to withdraw its request for the bond issue, leaving only a 15-year tax abatement valued at $60 million, and taxes will now begin phasing in as soon as the plant, a joint venture between Toyota and Ares EIF, becomes operational, projected as early as August 2018.
“It was a negotiation that went on longer probably than both sides would have liked, but it was well done and I’m glad it worked out well for everybody,” said council member Corey Noland, who served on the county’s negotiating team. “I think it’s going to be a tremendous asset for our community. Welcome.”