The Fort Wayne City Council met tonight. Since it was a Fifth Tuesday, Councilman Tom Smith revived an old tradition by arranging a Tax Abatement Discussion with City and County Officials. At the beginning of the meeting, Smith pointed out that the last time the Council met on a Fifth Tuesday was December, 2005. The hot topic that night was moving the potential new hotel to the block containing Cindy’s Diner. The move eventually went back to square one – the Belmont Beverage location in Harrison Square. “How far we’ve come!” Smith quipped.
The discussion was led by Elissa McGauley, Economic Development Manager for the City, Greg Leatherman, Executive Director of the City’s Redevelopment Department, Mark Royse, Deputy Director for the County’s Economic Development Department. You may listen to the discussion here:
One of the points made, which at first struck me as “spin” was that a common misconception or misstatement about tax abatements is that the City is giving money to companies. The exact opposite is the case. Taxes are phased in on an investment. In other words, the first year after an investment, the company pays 0 in taxes for the investment. The second year, they pay 10 percent, the third year 20 percent and so on up until the start of the 11th year mark where the abatement zeroes out and the company pays full taxes on it. You need to consider the companies risk in the investment they have made, including costs and even interest a company pays for loans to make the investment.
The session was educational, but brought up some other points to ponder including differences between what the City and County may offer, how the City and County each figure if an abatement is possible, and even that the City can give retail abatements while the County cannot.
Harrison Square
Greg Leatherman also reported that the City has received the Tax Abatement application for the Courtyard By Marriott Hotel to be built as part of Harrison Square. No other details were released.
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