Two Logansport businesses plan to expand

March 29--Two Logansport companies are planning to invest almost a combined $7 million into their businesses.

Bill Cuppy, executive director of the Cass-Logansport Economic Development Organization, briefed Logansport City Council members on the investments and the tax abatements requested for them Wednesday night.

Cuppy said Myers Spring Co. is planning to expand its plant 40,000 to 50,000 square feet to accommodate an increase in business. The expansion would add 10 employees and $300,000 in payroll to its workforce of 54 making $1.9 million, he said.

The company is seeking a 10-year property tax abatement for the project that would be 100 percent in its first year, 90 in its second, 80 its third, 65 its fourth, 50 its fifth, 40 its sixth, 30 its seventh, 20 its eighth, 10 its ninth and 5 its tenth.

Cuppy said real estate tax abatements are based on assessed value, not cost, adding Myers Spring Co.'s $2.2 million expansion is estimated to result in just under $1 million in assessed value.

Over the decade-long abatement period, Cuppy estimates the company would pay an additional $137,000 in property taxes while $131,000 would be abated. He estimates the city would get an extra $26,000 in annual property taxes after the abatement period ends.

City council members expressed support for the requested tax break at Wednesday's finance committee meeting.

"Myers Spring has had more than one tax abatement since I've been on the council and they have always met their threshold or exceeded it every time," City Councilwoman Teresa Popejoy said.

The council revisits abatements each year to confirm whether companies are in compliance with the terms of the tax breaks.

City Councilman Scott Peattie agreed with Popejoy.

"I think it's a good thing," he said. "It's expanding and adding more employees."

Todd Miller, president of Myers Spring Co., said Thursday that the expansion is needed not only because business is up with the company's core product line, but that the company will also start producing a new product there's currently no North American supplier for. The new product should increase the company's business by about 20 percent, he said.

Miller said the company continues to weigh out all of the permutations of the expansion's requirements, but "if the stars align correctly," construction should start this summer.

Miller went on to say that he and his wife and family along with Myers Spring Co. employees appreciate the city's support and consideration in helping the company grow its business.

Most of the company's business is outside of Cass County, Miller continued, meaning just about everything it does brings money into the community.

He added he appreciates Logansport Municipal Utilities' and Cuppy's efforts in helping the company plan the expansion.

"We've got a pretty business-friendly community and I just appreciate that," Miller said.

Matthew-Warren is seeking a five-year tax abatement for an about $4.7 million investment that would add 15 employees with an average salary of $60,000 per employee to its workforce of 155 and $9.5 million in payroll.

A sister division's spring business is moving from Chicago to Matthew-Warren plant space in Logansport, Cuppy said.

Cuppy said the abatement would be 100 percent in its first year, 80 in its second, 60 in its third, 40 in its fourth and 20 in its fifth.

He estimates the project would lead to the company paying $99,130 more in personal property taxes throughout the abatement period while $179,000 would be abated. After the abatement period concludes, Cuppy estimates the company would pay $41,700 more in personal property taxes a year.

Matthew-Warren has fallen out of compliance with at least one abatement in the past after losing employees, Cuppy and city council members recalled at Wednesday's meeting. They said it was because new ownership moved positions and payroll operations to Illinois.

The company did not lose its tax breaks, however.

"They have been out of compliance a couple of times," Popejoy said. "We did allow those because the circumstances of moving the jobs away that they didn't have any control over. When they applied for the abatement, they weren't anticipating that."

Cuppy said he doesn't expect anything like that to happen again anytime soon now that American Securities LLC, a private equity firm, owns Matthew-Warren. Private equity firms tend not to run operations and move employees around, he said.

Council members agreed to consider the requested abatement at their next meeting.

"Personally I don't have a problem with the abatement," Popejoy said. "However, if I'm sitting on the council and they don't meet compliance I absolutely will not approve the abatement. I will make that known right off the bat because of that history."

The council will vote on both companies' requested tax abatements at its next meeting, which will be at 6:30 p.m. Monday, April 2 in the Council Chambers on the third floor of the City Building, 601 E. Broadway.

Reach Mitchell Kirk at [email protected] or 574-732-5130

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