Hudson Valley Trees, Roundy’s, & Shelf Staple Foods all Got Deals and Left Town

Excerpt from Evansville City Council Meeting in 2004:

MISCELLANEOUS BUSINESS

Vice President Watts: Is there anything under Miscellaneous Business? Councilman Melcher.

Councilman Melcher: Last week, about Tuesday or so, I was getting two or three phone calls about Roundy’s and I guess it came out in the paper Friday, I guess this is something I’ve talked about over and over and over when we get tax abatements that we’ve never had anything on there where if they would get out before the tax abatement is over that they owe the citizens of our community something. I don’t know what we can do. I’m going to try to look into that a little more now because this is the third company that has done this to us. You remember we had Hudson Valley Trees and I thought we had Shelf Staple Foods or something that did the same thing. Well Roundy’s is leaving and we feel we did everything we could to keep them which I think worked. I can’t project what their sales and that, so I asked DMD if they would get me, because I couldn’t remember the year, but they got a ten-year tax abatement and they are in their sixth year. So as you know the way a ten-year tax abatement goes, they only pay roughly 10 percent the first year and 23 percent the second year, so they have gotten by real well now and maybe where they are going they are getting a better deal and they’re going to get another tax abatement. We’re going to have a lot of workers out of work, and I just think it’s something that we need to be constantly looking at. We’re all for economic development. We want to help. I’m glad we’ve got the point system, but even when we have a deal of tax abatement or tax phase-in as we call it now, is so everybody works out. We get a business, we get people working, and we’re all investing back into the community, and we’re willing to give up a little bit because we know that down the road we’re going to get more out of it. So it’s kind of like a marriage and now we’re getting divorced I guess and moving on. They also got airport development zone credits with the State, and I don’t know how the State is going to handle that. It seems like they took all the incentives because you know the first five or six years is where the bulk of it is and now they’re leaving. And I think that is kind of a shame of them doing that and maybe they had to financially. I can’t speak for that, but there ought to be something built in somewhere in our tax phase-in if something like this happens. I even talked about one time that they put a bond up or something during this tax phase-in and it goes down every year for a certain time. I just wanted to get that on the record tonight that we’re for economic development but we need because this might be happening more and more since outsourcing seems to be the way the Federal Government wants to take it, so I think that’s something we need to look at and I just wanted to get it on the record this evening. Thank you.

Councilman Kniese: Steve, I think it would be interesting to find out how many companies over the “x” number of years have received tax phase-in and how many have left and how many are still here. I think that would be interesting to see what kind of success ratio would be associated with that program.

Councilman Melcher: That’s not a bad idea. The one thing I think we did with Shelf Staple Foods, we even loaned them some money. I really think we had a hard time getting it back, but I think we did. But it’s really tough when you are in business I know.

Councilman Kiefer: Mr. President. John, I have a question in regards to what Steve is saying. I think he makes a very valid point. Is there, can we legally, uh could we do something by ordinance that said that either they would post a bond to cover that diminishes as time passes or maybe we could even place, like in this case, they’re selling their property, maybe we have a lien on to the property if something like that.

Councilman Melcher: I don’t think there is anything you can do now.

Councilman Kiefer: I mean, I don’t think now, but I’m saying in the future could, would we have the ability to do that or is that something that has to go through the State Legislature?

Counsel Hamilton: It’s completely spelled out by the State Acts so I think it would have to be amended at that level. I could look into that….

Councilman Kiefer: Well, that would be worth checking into, because I think he’s made a very valid point on that.

Counsel Hamilton: The State spells out the requirements and gives you parameters that you have to live in between. But I’ll look at it.

Councilman Kiefer: Okay. Madam Clerk, were you able to contact anybody about doing a presentation on the efficiency study to the City Council?

Clerk Matlock: I’ll make a note to myself.