Ottawa city commissioners have given the green light to a tax abatement designed to help an Ottawa business regain traction after a fire destroyed part of its operations.
Astro Truck Covers Inc., 801 E. North St., which relocated to the Ottawa Industrial Park after a Feb. 8, 2011, fire burned part of its facility in Garnett, sought a 10-year tax abatement to help facilitate its relocation and growth in Ottawa, city officials said at a previous study session.
After no one spoke during a public hearing Wednesday, Ottawa city commissioners voted 5-0 to approve the tax abatement.
Under the 65-percent tax abatement plan, Astro Truck Covers agreed to participate in a PILOT (payment in lieu of taxes) program that would direct about 12 percent of the abatement into the Franklin County Development Council’s coffers to enhance future economic development and job creation, Scott Bird, the city’s finance director, told commissioners.
“It would result in a net abatement of about 53 percent,” over the life of the 10-year abatement period, Bird said.
Astro Truck Covers, which employs about 50 workers, produces truck lids and caps, bed systems and other accessories, according to its website. Company representatives told city commissioners at a previous study session they plan to continue expanding their workforce in the next five years.
The tax abatement would be for Astro Truck Cover’s manufacturing and warehouse facility — including land, buildings and other personal property — with a total estimated value of $2.817 million, according to city documents.
An independent study conducted by the state Department of Commerce showed the abatement would result in a 4.43-to-1 return on every tax dollar abated, Bird told commissioners.
“That more than meets the city and state benchmark of a 1.3-to-1 return,” Bird said.The city recently adopted a similar 10-year tax abatement plan for Monoflo International. Monoflo in August 2012 acquired the former Kennel-Aire LLC facility, 1550 N. Davis Ave., Ottawa.
Monoflo sought the abatement to help the company defray some of its start-up costs, city officials said. Monoflo also agreed to contribute to the PILOT program, resulting in a 55 percent net tax abatement.