Aldi tax abatement bumps against special tax district
By Amy Lavalley Post-Tribune correspondent April 23, 2013 8:58PM
Updated: May 25, 2013 6:44AM
VALPARAISO — The specter of tax increment finance districts reared its head at Tuesday’s Porter County Council meeting, as grocery chain Aldi asked for a tax abatement for a planned expansion and council members fretted the distribution warehouse would later land in a TIF district.
Their concerns were not unfounded; the county’s redevelopment commission has plans for a TIF district in Liberty Township that would include Porter Regional Hospital, which is under a council-granted 10-year tax abatement. As the tax abatement rolls off, that money would be collected by the TIF.
The Aldi warehouse is at the northwest corner of Division Road and Indiana 49. Attorney Todd Leeth, representing Aldi, said the expansion would add 100,000 square feet to the 375,000-square-foot warehouse, which serves about 50 stores in Northwest Indiana and Chicago.
The plan would add 15 jobs over three years, Leeth said; the warehouse has 138 employees now, and dozens of contract workers.
Only the expansion will fall into the 10-year tax abatement, with taxes increasing by 10 percent each year. The council ultimately voted 4-1 in favor of the abatement; Councilman Jim Biggs, R-1st District, voted against the move. Councilman Dan Whitten, D-At-large, and Councilwoman Karen Conover, R-3rd District, were not at the meeting.
Though the county has millions of dollars in reserve funds, Biggs said, it does not have recurring revenue for operations, so he had a difficult time granting the abatement.
“I think it’s a wonderful company and a great employer and I appreciate them being here, but I don’t think I can justify it,” he said.
Other council members were concerned that Aldi could land in a TIF district if the redevelopment commission creates one near the airport. Commissioner Nancy Adams, R-Center, said Aldi isn’t in the area that would be considered for a TIF.
The facility already receives water service from the city of Valparaiso, so funds wouldn’t be necessary from a TIF district for utilities, Leeth said, adding the warehouse also is bordered on two sides by city limits.
“This is a tax abatement and it’s not a TIF and they’re frankly very opposite concepts and don’t work well together,” Leeth said. “They can, but it’s not well-advised. I don’t think that’s what economic development experts would recommend you do on a regular basis or routine.”