Lebanon awards $20 million in tax abatements to add jobs, industries

Dec. 5—Lebanon officials approved $10.7 million in tax abatements and incentives this month for three projects expected to create new jobs and attract new industries.

The Lebanon City Council uses tax increment financing, TIF, bonds to help companies establish here and diversify the city's industrial base.

The city does not pay out of pocket for TIF money but issues bonds backed by a portion of the anticipated future income generated by the recipient.

The bonds are backed by the developers, who are financially responsible, Boone County Economic Development Corp. Executive Director Molly Whitehead said.

US Cold Storage

US Cold Storage is poised to expand for a second time in Lebanon at the cost of another $38 million.

US Cold Storage, on 38 acres in the Lebanon Business Park, stores frozen products for food producers and ships them to buyers, such as grocery and big-box stores nationwide.

US Cold Storage employs 99 people at present and will add 30 new full-time positions at an anticipated $30 per hour, or $7 million in salaries per year with the expansion, Lebanon Mayor Matthew Gentry said. The expansion is expected to result in an additional $3.3 million tax levy US Cold Storage will pay.

US Cold Storage, based in the Netherlands, has been working in Lebanon since 2008 and hosts Lebanon Fire Department training exercises in its warehouse.

The council's Nov. 25 meeting was the last for outgoing Councilman Brent Wheat, who lost his bid for re-election. He cast the single vote against the abatement, saying the bonds are used to draw business during times of need. But Lebanon is no longer short on businesses and should not easily give up money, he said.

Councilman Mike Kincaid and Gentry said they agree there should be more conversation for new companies coming in.

But those already established in Lebanon received abatements in the past, contribute the general good and economy, and should not be punished "because we have enough growth," Kincaid said. "If you want to not give them, wait on somebody new."

The city offered US Cold Storage $8 million in TIF money for its first phase. City leaders said that tax relief offered for NewCold's second phase may total up to $1.5 million over the five years allotted. The abatement percentage is largest at the beginning of the period and dwindles until it expires.

"They chose to invest in Lebanon early and keep investing," Gentry said of NewCold. "The return on investment from the city's perspective is very positive and not a situation where we gave away the store. There was a back-and-forth negotiation."

"We don't ever have this discussion," about abatements, Wheat said. "I would urge this council, and any following council, to at least think about this."

Lebanon Cedars

The city approved TIF relief of up to $8.5 million for developer, Lebanon Cedars, LLC.

Lebanon Cedars will construct commercial buildings on the city's south side, near Lebanon Business Park and along John Shaw and Tyre roads off of Ind. 39 near the CSX Railroad tracks.

The two-phase project represents a total $85 million in investments to build one or more industrial warehouses, distribution centers, manufacturing facilities, and cold storage facilities, according to documents provided by the city.

The current estimate is that the project will result in 95 new permanent jobs with a combined annual payroll of $3.5 million.

The TIF money will, in part, pay for improvements to both roads and water lines, sanitary sewer, and power extensions to the area.

Patterson Street

Patterson Street Partners, LLC, will receive up to $700,000 in TIF money for building a 72,000-square-foot speculative building at 320 N. Patterson St.

The lot has housed industry since the 1800s — most recently, Prairie Industries — and posed environmental concerns. The developer cleaned up a blighted, vacant property and made a building that will be easy for an industry to move into and bring more jobs to the city, Gentry said.

Editor's note: This story replaces a previous story that incorrectly identified US Cold Storage as a similar company in Lebanon.