County issues ultimatum over tax break

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Hancock County officials say Walmart is back in compliance with the tax break for its large fulfillment center nearing completion at County Roads 500W and 500N.

Daily Reporter file photo

HANCOCK COUNTY — Officials are warning Walmart they may roll back a development incentive for the company’s massive warehouse going up in the western part of the county.

Despite notifications from the county, the retail giant has yet to file paperwork necessary for determining whether it’s in compliance for the tax break approved on the property. If Walmart doesn’t provide the documents in the next several weeks, leaders say it won’t see a reduction in taxes anytime soon.

At over 2.2 million square feet of warehouse space and over 650,000 square feet of office space, the future fulfillment center located at the southwest corner of County Roads 500N and 500W is on its way to becoming one of the biggest buildings and having one of the highest assessed values in the county.

The Hancock County Council approved a 10-year property tax abatement for the real estate improvements in 2020. The abatement fully deducts the assessed value of the improvements and the taxes owed on that value in the first year. After that, the assessed value is deducted less and less over the years that follow until taxes are fully phased in.

An abatement begins when there’s an increase in assessment, regardless of whether a development is completed. The Hancock County Assessor’s Office gave Walmart’s warehouse a partial assessment for 2021 taxes due in 2022. The 10-year abatement schedule starts at its beginning for each partial assessment respectively.

When property owners receive tax abatements, they have to file paperwork each year that the Hancock County Council reviews to determine whether to allow the abatement to continue. Council members take into consideration factors like the values of improvements and added jobs.

Because of the Walmart warehouse’s initial partial assessment, the company should’ve turned in that paperwork last year, but didn’t. Nicole Byerley, a settlement deputy with the Hancock County Auditor’s Office, said she mailed Walmart a letter about its noncompliance. She added that the company then called to explain that they didn’t file the paperwork because the warehouse isn’t complete yet. Byerley explained that the abatement has started in the county’s eyes due to the partial assessment, and said she hasn’t heard back from Walmart since.

The warehouse’s partial assessment is nearly $17 million, Byerley said. After applying the tax rate, it comes to an estimated total bill of nearly $390,000 for the year that Walmart will be responsible for if it isn’t found to be in compliance.

County council members instructed the auditor’s office to send Walmart a certified letter stating if the company doesn’t comply within 30 days, it won’t get a tax abatement this year.

“My opinion on this is it’s time to make a decision,” council member Mary Noe said. “Either Walmart’s got to do what they got to do, or we’ve got to say what we’re going to do. Because this can’t drag out till tax collection time, and then it’s a bigger issue.”

Walmart did not return a request for comment.

Two other companies with tax breaks approved for warehouses in Hancock County didn’t turn in compliance paperwork on time either, but filed after the county notified them. Both also involved partial assessments setting the abatements in motion before the projects were completed. The county council approved waivers of noncompliance for both, allowing them to keep their abatements.

One was Exeter Greenfield Land, LLC, a subsidiary of Exeter Property Group headquartered in Conshohocken, Pennsylvania. The firm has a building that’s over 863,000 square feet at the southeast corner of County Roads 300N and 700W that Atkins Nutritionals is leasing.

Kelli Arnold of Indianapolis-based Paradigm Tax Group, representing Exeter, noted to county council members that building permits for the project were filed in late 2020.

“We did not anticipate that new construction was going to get picked up for the January 1st, 2021 assessment date,” and as a result did not file the necessary paperwork until after being notified by the county, Arnold said.

Ryan Thomas, senior vice president of development and construction services for Carmel-based Lauth Group, explained a similar situation for the developer’s nearly 282,000-square-foot warehouse IFCO leases at the northwest corner of County Roads 350N and 700W.

When determining the fate of Exeter’s and Lauth’s tax breaks, county council members said they recognized that the partial assessments can be confusing and understood how it could lead companies to not think compliance paperwork is necessary just yet. Council members acknowledged it can be confusing for themselves and county employees as well.

“It’s causing a little bit of us not understanding when things are this and when things are that,” said council member Kent Fisk. “But it’s growing pains, and I don’t see any egregious violations…”

The council approved Exeter’s and Lauth’s waivers of noncompliance 5-0 with Fisk, Bill Bolander, Keely Butrum, Robin Lowder and Jeannine Gray voting in favor. Jim Shelby was absent, and Noe had not yet arrived at the meeting at the times of the votes.

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