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Thursday, December 22, 2016

Ind. Gov't. - "Property tax debt won’t doom Can-Clay: Perry County nearing deal to keep company open"

Stuart Cassidy of the Perry County News has a lengthy, well-reported story today that caught the ILB's interest. Some quotes:

TELL CITY – Instead of a lump of coal, the Cannelton-based pipe manufacturer, Can-Clay Corp., may get a huge gift just in time for Christmas. Amassing nearly a half-million dollars in back property taxes, the financial slate will soon be wiped clean with a county takeover of the grounds. Yet, in a controversial move, the business may be allowed to remain open.

Nearing a Dec. 31 deadline to make good on the delinquency, all indications are that a payment will not be forthcoming. That means the county will assume the property, voiding obligations for the company to pony up the more than $600,000 incurred with penalties.

In September, the county commissioners pulled a tax deed it held on Can-Clay for failure to pay taxes, giving the company 120 days to pay. Failure to meet the deadline forfeits the property into county ownership. But from early on in the process, the county has maintained that they didn’t want to force a seizure, but had little recourse after Can-Clay failed to live up to a previous repayment deal.

In the waning days of 2016, despite the prospective acquisition of the real-estate, the county and the manufacturer are close to a deal that would allow the business to keep producing goods. Terms are not yet finalized, but the county commissioners have said they are willing to allow Can-Clay to lease the grounds and apply that money toward repayment of the debt. Once the county is compensated – to the satisfaction of whatever agreement materializes -– the business would be allowed to repurchase the physical property where it has operated for more than a century.

During a county-held proprietorship of the grounds, Can-Clay wouldn’t incur the annual property taxes. However, they would be taxed on machinery and equipment they use.

Some have expressed concern about giving the company a pass, fearing it sets a precedence for other failing industries to trek a similar bailout path. Yet commissioners have said this is the best way to go about the ordeal, since the alternative means the county receives no money and loses a business. What’s left would be a dilapidated set of properties that could require substantial cleanup efforts on the taxpayers’ dime that would likely take years to complete.

Cannelton Mayor Mary Snyder, who was present at the latest commissioners meeting Tuesday, voiced restrained pessimism about what’s taking place. With her city losing upward of $50,000 a year because of the delinquent tax payments, Snyder said “we’ve already suffered for four years.” Skeptical that the proposed arrangement would offer much benefit, she added that “Can-Clay has always been there and I’m not trying to shut them down,” yet expressed dissatisfaction that the company would be allowed to potentially profit despite its track history and dim financial outlook. * * *

According to county attorney Chris Goffinet, there are still barriers to establishing a covenant with the company, namely “some rather complicated issues on taxes and what we can and can’t do with the land.” In addition, any agreement would need to be signed off by the county redevelopment commission as all the parties determine an overall price, lease payments, duration and any long-term property cleanup efforts. * * *

With a potential of having to wade through a complex legal and tax system in order to finalize a deal, Goffinet recommended the county employ the services of the Ice Miller legal team, which has expertise in business, government and financial matters, and has assisted the county in other previous ventures. Expecting to incur upward of $15,000 for the extra legal advice, the county plans to secure a good-faith deposit from Can-Clay to cover the costs. Any advancement on that front, at this point, would be contingent on the business financing that work.

Posted by Marcia Oddi on December 22, 2016 04:24 PM
Posted to Indiana Government