(BEDFORD) – The Bedford City Council approved tax abatements for five businesses. These abatements were approved for ten years and now go before the council to make sure the businesses are meeting the terms and conditions of those abatements every year.
Tax abatements play an important role in economic development and job growth for a community.
Tax abatements are used for five main purposes:
- Building Improvements – Any new structure, building addition, or other improvements that increase the assessed value of the facility.
- New Manufacturing Equipment – Any new equipment that is used in the direct production, manufacturing, fabrication, and assembly of a product. Used equipment can also be eligible for abatement.
- New Logistical Distribution Equipment – Any equipment that is used for storage or distribution of goods, services, or information.
- New Information Technology Equipment – Any equipment, including software, that’s used in information processing, office automation, telecommunications, etc.
- Research And Development – Any equipment used in experimental or laboratory research and development of new products, new uses of existing products, or improving or testing existing products.
Abatements are granted to industries and manufacturers that are located within an economic revitalization area. In Lawrence County, there are 29 such designations.
The purpose of a tax abatement is to achieve certain economic development growth goals for a region or community.
- Retaining or attracting employment positions for a specific company or industry.
- Directing private investment for the revitalization of distressed local economies or areas of a community as part of a redevelopment or economic development programming.
- Increasing long-term assessed value valuation for a taxing unit
- Addressing location cost disadvantages or gap financing.
Tax abatements are an assessed valuation deduction, which is an annual percentage of savings of assessed valuation as the result of new investment. This may be used to provide gap financing or incentive to locate within an area. This could also be used as a tool to create employment positions, and other promises to perform certain actions.
Tax abatement of qualified, tangible property is a useful economic development tool for any county, city, and town municipal government. It is very important in sustained long term development.
The following abatements include:
- Bedford Development LLC. which includes real estate improvements on a 32,467 square foot addition to GEO Flow Products Corporation. The company employs a total of 20 people, with a payroll that continues to grow over $1 million.
- GEO Flow Products Corporation on personal property and equipment was also approved. The tax abatements for this company will end this year in the 10-year tax abatement schedule. The assessed value of the property was $1,103,600.
- DS Fab & Tool was approved for personal property tax abatement on equipment for the purpose of manufacturing machinery for the limestone industry. The company works out of three buildings producing belts, blades, and other products. The business employs a total of 15 employees, and the company had a good year. Personal property assessed value is $30,310, with the real estate property having an assessed value of $552,600.
- General Motors is also in its final year of six personal property abatements. The company expanded its efforts back in 2007. General Motors employs nearly 900 employees with 714 hourly and 165 salary employees. The company produces die-cast for three main products including SPM, CSS block, and castings for the new Corvette product line. The personal property tax abatements total $124,257,460.
- Nan-Lee Properties, with a real estate investment of $170,800, employs nine people. The business continues to grow in 2020 and has not slowed down at this time. They provide General Motors with some material handling boxes and supply products to a business in South Dakota that did not shut down amid the COVID-19 crisis.