Melanie Reilly, left, head of Slate Automotive’s tax department, and attorney Steve Snyder, right, answer questions from the Kosciusko County Council Thursday about Slate’s tax abatement request. Photo by David Slone, Times-Union.

By David Slone
Times-Union

KOSCIUSKO COUNTY — The total investment that Slate Auto is looking to put into the former LSC Communications (Donnelley) building on Old 30 West is near $363 million. With that investment, the electric-powered pickup truck manufacturer is looking to the county for tax abatements.

Attorney Steve Snyder, on behalf of ReCar Inc., doing business as Slate Auto, and Phoenix Warsaw Industrial Investors LLC, which owns the real estate at 2801 W. Old 30, Warsaw, and has executed a lease with Slate Auto for the facility at that location, presented the request for tax abatements to the Kosciusko County Council Thursday night, May 8.

“It’s part of an incentive package that has been discussed with Slate for probably six or seven months now. Some of you have been involved, who are on the abatement committee, others have not. And I think you all understand what the proposed product is to be manufactured at the site,” Snyder said. He said it’s an electric-powered pickup that will retail for — after federal credits — hopefully below $20,000.

Slate will be installing all of the manufacturing equipment, making all the improvements to the real estate necessary to establish the production facility, he said. Slate will also install all the real estate improvements. Slate is the investor at this point.

“Currently, you’re looking at some values that have not been as impressive as they have been over the years. The current  assessed value of the real estate is $9,590,100. Real estate taxes paid on an annual basis are $201,448. Personal property is valued at $1,527,660, and the last payment for personal property taxes was $22,635. The property is currently vacant and there are no employees on the site. Slate is looking to change that for the benefit of the county,” Snyder said.

The proposal, he continued, is to make improvements to the real estate totaling $59,085,106; and to make personal property additions in the form of manufacturing equipment, logistical equipment and IT equipment totaling $303,168,831; for a total investment of $362,253,937.

“That’s an impressive number when you look at the total, especially in the light of the fact that we have a vacant facility that could stay vacant for how long, nobody knows, but because of the incentives that have been offered to Slate, they believe they can make that facility fit their needs,” Snyder stated. “On top of the nearly $400 million investment, there will be roughly 1,679 new jobs created at the facility at a total annual salary of $93,913,415. It is an opportunity that has been a long time in the making. Negotiations with the state, with utility companies and with the county in regard to the incentives that it took to bring Slate here,” Snyder said.

“There were other choices, let’s put it that way. These incentives are what brought Slate to the door and gives the county the opportunity to utilize 1.5 million square feet of an industrial facility zoned I-3 and bring it up to speed and employ nearly 1,700 employees.”

Thursday, he said they were requesting the council declare the real estate be an economic revitalization area, which is the first step in the process, and preliminarily approve the abatement of 10 years on real estate and 10 years on personal property.

“That is in the form of a declaratory resolution that’s been provided to each of you, establishing those timelines. You have to remember that this is the first step in the tax abatement process. Without the declaratory judgment occurring tonight, we can’t come back and ask you for the confirmatory resolution, which is the final approval. That hearing would come after publication of notice to the county indicating what is being asked for and that you will take final action on the determination of the (ERA) and the approval of the requested abatements,” Snyder explained.

He pointed out the productive use of the facility is very significant, but “when you’re looking at a facility that size in Warsaw, Indiana, it could sit vacant for a long time if we don’t provide the incentive for someone like Slate to come in, and believe me, that’s what brought them here.”

Melanie Reilly, head of Slate Automotive’s tax department, said, “This abatement would help our company grow and get a good, firm footing in building out our factory, everything from manufacturing to IT. Jobs, of course, would be a big help, so overall I think that having this incentive helps us come in on firm footing and build out a great company and be a part of this community for a long time.”

County Councilman Dave Wolkins asked her if she had any idea how much actual tax revenue, at the end of the 10 years, would be produced. Reilly said she didn’t believe they had projected those numbers at this point but she could get him that information in the next week or so. Wolkins then asked how much incentives the Indiana Economic Development Corporation was putting in and how many guaranteed incentives does Slate have coming right now.

Reilly said they have three incentives that are guaranteed. They have an energy credit they are contracted for through NIPSCO. They also have two Economic Development for a Growing Economy credits with one helping in the development of Slate’s employees when they are hired and the other one a wage credit to help with the initial employment of the factory workers.

Wolkins asked her if she knew the dollar amount of those, and Reilly said she believed the employment credit was around $200,000 but she would need to check on the other two and get back to him.

Wolkins’ last question was about payroll. With approximately 1,679 employees making an annual salary of over $93 million, he said that figures out to about $27 an hour. He asked what the anticipated wages will be.Reilly said that will be highly dependent on the job and the person’s experience.

“But, we do actually anticipate that wage amount may be a little higher than that ($93 million). That’s a conservative number that we’ve come up with. There’s potential that there could be more employment than that 1,600, not guaranteed, but we are looking in that range,” she said, adding that there will be a wide range of salaries.

Rich Schmidt, Slate head of manufacturing, said, “The salary base, typically, from a factory standpoint, they’re typically going to be anywhere close to $70,000 a year income, is typically what the hourly will make. Your salary positions will be somewhere around $120,000 and up, and some of your key engineers — software, electrical — will be in the $150,000 range plus. So that kind of gives you the base pay of those type of individuals. Some will go up to the $200,000-plus.”

On the facility, he said it has 273 ADA compliance issues, it has asbestos and a ton of other issues so that the building has to almost be completely redone.

The floors are subpar and have to pulled out. The concrete has to be disposed of or repurposed.

“So most of the building shell is there, but the integrity of the building is very poor. So it’s got to be completely redone. Electrical is subpower to what we need. The concrete is subpower, the structure is subpower … so we have a lot of improvements that we have to redo first,” Schmidt stated. The building will be redone from now until October. Another team is working on the equipment installation and designing. In October, Schmidt said he’ll start hiring his hourly employees, about 100 a month.

“Right now, let’s say it’s a lot higher numbers than (Reilly) is presenting, as far as number of employees,” he said.

Councilman DeLynn Geiger made a motion to approve the declaratory resolution, with Councilwoman Kimberly Cates seconding the motion. It was approved 6-0 with Councilwoman Kathy Groninger abstaining.

The abatement will go back before the council at their 6 p.m. June 12 meeting for approval of the confirmatory resolution.