FORT WAYNE, Ind. (WANE) – Amazon will ask Fort Wayne City Council for a tax abatement or “tax phase in” at Tuesday night’s meeting.
The proposal would have the company pay no property taxes at all on its distribution center on Flaugh Road for the first year, with gradually increasing rates the following nine years. According to the document, the property would be designated as an “Economic Revitalization Area.”
By year 10, Amazon would pay $1,052,103 in taxes.
“It’s a formula that is set so you kind of get to build up to it, over a period of years, to make the tax burden a little bit more palatable and easier for the businesses to actually meet,” said Councilman Geoff Paddock (5th-District). “It isn’t as if we’re giving them, let’s say, a payment. We’re just delaying what they will be paying us.”
Paddock said this procedure has been in Indiana State Law since the 1970’s.
“This is a process that is open to certain companies that are going to come in and, obviously, offer something you know pretty substantial for job creation,” said Paddock. “I mean there aren’t too many companies in Fort Wayne that provide 1,000 jobs or more particularly as they’re getting started.”
In March, City Council approved a tax abatement for Project Mastodon, which was for the real estate property. The difference between the two is that this ordinance is for personal property such as business equipment.
Although Amazon wouldn’t be paying Fort Wayne any taxes at all during its first year, Councilman Paddock doesn’t think it will negatively impact the city.
“I don’t know that it hurts the city at all because there’s really nothing there right now,” said Paddock. “You’re taking a piece of ground that doesn’t generate very much and if the city owns that, it wouldn’t be generating anything at all because governments don’t have to pay property taxes or taxes on their business equipment.”
The $100-million project would create 1,000 full-time jobs with an annual average salary of $30,000.
Paddock said Amazon appears to meet or exceed the “rigorous benchmarks” that are set such as wages and benefits.
“When you think of it, an employer that’s going to have over 1,000 employees, making at least $30,000 or more a year, that’s going to add substantially to our economic development with all those people earning money and and paying into our city so in our state,” said Paddock. “So, in the long run, it’s obviously, it’s a pretty big game.”
However, he said the big question is whether or not the city should allow for the phase in.
“There are always a couple that don’t support this, for reasons and I always respect that,” said Paddock. “Some might say that, because a large company made up of wealthy investors that perhaps they don’t need this incentive in order to be here.”
Whereas on the other hand, he said others may argue that without the incentive, businesses may go to another location and the city could lose out on the jobs.
A public hearing will be held on July 27, which is mostly likely when councilmembers will discuss and vote on it, according to Paddock.
WANE 15 reached out to Amazon for a comment and has not heard back yet.