SOUTH BEND ― City officials on Monday moved to grant large tax breaks to the new owner of the ethanol plant on the southwest side, setting the stage for more than $230 million of private investment.

The South Bend Common Council passed resolutions supporting two tax abatements that would waive an estimated $16.5 million in property taxes over the next eight years for Verbio North American Holdings Corp., the company that bought the facility last week. Verbio said it will retain 61 jobs and create eight new positions at the plant as part of its $232.5 million plans to expand and produce ethanol as well as renewable natural gas.

More: Germany's Verbio buys South Bend ethanol plant and plans $230 million upgrade

The council will take a final vote on the tax abatements at its May 22 meeting. Council members on Monday voted unanimously in favor of the plan.

Verbio would still pay roughly $6.3 million in taxes over the eight-year abatement period, according to the petitions. But under the plan, more than 70% of taxes would be waived.

Verbio CEO Greg Northrup said the city's tax abatement is crucial to the company's goal to produce 85 million gallons of corn ethanol and 2.8 billion cubic feet of renewable natural gas per year. The company would also make fertilizer for use in agriculture.

"We've spent about the last six months of due diligence looking at this site," Northrup said. "I can tell you that some days it was, 'Should we buy it?' Some days it was, 'I don't think so. It's a high-risk proposition.'"

Northrup alluded to a fraught two-year period in which the plant at 3201 W. Calvert St. was shuttered after a previous owner went bankrupt in 2012. Then the firm Noble Americas bought the plant, saving it from impending demolition.

In 2018, Mercuria Investments purchased the facility and spent $30 million to boost its production and efficiency. Verbio, a German company, took over ownership from Mercuria last week.

Most of Verbio's investment will be spent to build 16 massive storage tanks, 10 buildings and new equipment to upgrade methane gas to "pipeline-quality natural gas."

"We believe, because of our technical skillsets and our capabilities, that we can turn this around," Northrup said, "and that we can make this plant a wonderful example of what the next phase of ethanol production will look like."

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There are nearly 200 ethanol plants in the U.S., Northrup said, most of which produce the fuel and use the residue as feed for farm animals. But over the last decade, Verbio, a German-based company, has developed technology that converts the waste into renewable natural gas.

Northrup said the South Bend facility would be the first in Indiana to employ the conversion process and Verbio's second plant in the U.S., alongside its facility in Nevada, Iowa.

If the abatement passes, construction would begin later this year and advance over three years.

The 1,000-employee company has been active for nearly 25 years, Northrup said.

The eight new full-time employees and the 61 employees retained would earn about $100,000 salaries, according to Northrup.

Alyson Herzig, director of economic development for the South Bend Regional Chamber of Commerce, told the council that Verbio's investment will have an estimated $351 million impact in the regional construction industry over three years.

Email South Bend Tribune city reporter Jordan Smith at JTsmith@gannett.com. Follow him on Twitter: @jordantsmith09

This article originally appeared on South Bend Tribune: South Bend supports Verbio ethanol, natural gas plant with tax breaks