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Monroe Council Debating New Printpack Abatement

Part I: High Stakes in Tax Abatement Struggle Between Monroe Co., Printpack

Already the business has enjoyed a tax abatement from the city of Bloomington, and has benefited from improvements made to its new property, including bringing a road and sewer and utility lines right to the business’s proposed front door.

Now the company is asking for another abatement, this time from the county, saying talks about moving the factory have already begun in other states and even other countries.

So, is Printpack taking advantage of a tight economy to squeeze more incentives from county officials who don’t want to be seen as bleeding jobs?

County Council member Julie Thomas called the process a form of legal extortion and Bloomington Mayor Mark Kruzan said it’s impossible to make a tax abatement decision based on a guess of whether the businesses will really go.

“Every business is going to come forward and say we might go someplace else. And then its, well it becomes a game in my mind,” Kruzan said. “It becomes sort of a, are you willing to make the bet that they won’t go elsewhere? It’s a lose-lose for politicians, it’s a lose-lose for government officials, it’s a lose-lose for economic development officials and that’s why I think we should take that particular consideration off the table.”

Printpack Vice President of Operations Stephen Eastham said an abatement would simply serve as a sign that Monroe County is ready to partner with Printpack, but Thomas says the county has already extended that olive branch.

“Printpack asked the Redevelopment commission to consider building the $900,000 road….and what they said was if we get this road it will go a long way to attracting us to this site and a direct quote, ‘If you put the road in it greatly increases the chances of this being the selected site’ end of quote and that came from the company representative from Printpack who was at the redevelopment commission,” Thomas said.

Eastham said, that’s wrong, saying Printpack authorities thought the road came as a part of the property, not realizing the land was part of a Tax Increment Financing district, or TIF, until they were asked to speak before the Redevelopment Commission.

“Someone made the comment, ‘we thought you committed to building the building if we approved the road.’ And what I corrected them was no, we committed to purchasing the land,” Eastham said.

Council members are now writing a “memorandum of understanding” in an attempt to ensure that same confusion doesn’t happen again. Thomas said the memo’s language should include stipulations requiring local union hires and a rule about how long Printpack will have to stay in the county following the abatement.

Still, she worries any agreements the two entities make won’t be enforceable.

“I’m concerned. I have a lot of concerns,” Thomas said.  “It is a very difficult, very difficult process to pull back and say look you’re not following your compliance, you’re not meeting your requirements… because if you do find someone that’s not in compliance you can sometimes be sued as a county for going back on a promise.”

It’s hard to gauge Printpack’s willingness to compromise. Eastham said he’s uncertain it would be legal or cost effective to ensure the hiring of Monroe County residents.

“We also as I said in the meeting cannot pay to non-competitive Monroe County candidates just because they’re in Monroe County. In other words we need to be as competitive with the building of this building as we are with the running of this building,” Eastham said.

Printpack could also potentially ask for interest-free bonds which would become available if the county commissioners make use of a provision in the federal stimulus act allowing them to establish a “recovery zone” in the county.

The bonds are subsidized by the federal government, meaning this potential third perk for the company would come at no cost to the county—but Eastham says he isn’t sure whether his business will seek the bonds. County Council members will hold a meeting to discuss the memorandum of understanding with Printpack tomorrow and will hold a final public meeting on the issues next Tuesday.

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