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Council needs more time to consider tax abatement


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Walter Justus, president of the Justus Companies, makes a pitch to the New Palestine Town Council Saturday asking for tax abatement for a proposal to construct an $18.6 million senior living campus at 5800 W. U.S. 52 in New Palestine. (Kristy Deer / 
Daily Reporter)
Walter Justus, president of the Justus Companies, makes a pitch to the New Palestine Town Council Saturday asking for tax abatement for a proposal to construct an $18.6 million senior living campus at 5800 W. U.S. 52 in New Palestine. (Kristy Deer / Daily Reporter)


NEW PALESTINE — They didn’t say no, but they didn’t say yes, either.

Town officials say they still need to gather more information about tax abatements before they give an answer to the Justus Companies’ request for what could be as much as $3.7 million in tax breaks on the construction of a proposed $18.6 million housing complex for seniors.

Officials from the Justus Companies, including company owner and President Walter Justus, made a pitch to the New Palestine Town Council Saturday morning seeking tax abatement on the proposed construction.

Justus officially asked for a 10-year, full 2 percent tax break on what they say will be a commercial development.

While state law allows local communities to offer tax abatement as incentives to certain new and expanding businesses, the incentives are unusual for non-industrial projects.

Tax abatements normally last for 10 years; property taxes are phased in during that time, with the full 100 percent of taxation abated in the final year.

 Justus plans to construct a 125-unit senior community called Woodland Terrace of New Palestine, consisting of 95 assisted-living and memory care units and 30 independent-living cottages. The senior living campus is proposed at 5800 W. U.S. 52 in New Palestine. Original plans a year ago called for 171 units.

If the tax breaks are given in full at 2 percent over the 10 years as requested, the development could get as much as $372,000 in tax breaks for each of the 10 years based on the current value of the property.

 However, county officials say that is unlikely and any official tax abatement would be based on an assessment of the property.  

“The answer is, we just don’t know yet,” said Skip Kuker, executive director of the Hancock Economic Development Council, when a community member asked the dollar amount of the tax break.

“It all depends on what the length of the abatement is… Everything we do is a negotiation… It could be between one and 10 years,” Kuker said.

State law allows the fiscal body for the land, in this case the New Palestine Town Council, to create its own percentage and time allotment for tax abatements.

While council members listened to the proposal, they told Justus officials they needed to gather more information before making a decision. This is the first time town officials have been asked to offer a tax break to a business. Town officials plan to hold a tax abatement training session April 21, before they give Justus officials a response.

Justus officials have   requested the 10-year tax abatement  for real estate improvement on 13.7 acres.

Woodland Terrace is expected have up to 72 employees. According to the proposal, the construction phase will require a minimum workforce of 40.

The facility will require 32 employees to operate the center, which will consist of administrative, nursing, housekeeping, maintenance, wellness memory and dining staff.

The average salary, according to the company proposal, will be close to $41,000.

Walter Justus told the council that while the company’s research indicates a need for the facility now, nothing is guaranteed, which is why they are seeking tax breaks.

“Based on our primary market study, so far things look acceptable,” Justus said.

However, he noted the company is in the midst of a second study, which is expected to be completed soon.

“Nevertheless, we want to be conservative and be cautiously optimistic with our proposal… But, when you are talking about an investment of this size, you have to believe you can grow into it,” Justus said.

While Justus officials cited other senior facilities, including in Avon and in Crown Point, as recently receiving tax abatement for construction, the idea didn’t sit well with some who attended the council meeting.

Edward McCartney, 88, of New Palestine said he was against the town offering any type of tax abatement.

“They are a business,” McCartney said. “They are out there to make money. I have to pay taxes, they should have to pay taxes. I say no abatement.” 

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