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Putnam business may miss out on tax break

By Ryan Quinn, Staff writer

WINFIELD — A new Putnam County business may have to pay about $17,000 it could’ve saved on real property taxes this year had its representatives attended the third meeting on a proposed tax break on Tuesday.

The May 27 County Commission agenda listed an item to approve a 20-year, 20 percent-off tax deal with FLSmidth that could save the company $338,000 on its Fraziers Bottom location over the next two decades. But approval was postponed then, and June 10 and on Tuesday after representatives repeatedly failed to show.

There are no more commission meetings scheduled before July 1, when officials say the company will be required to pay its annual bill of $84,430 without the 20 percent, or $17,000, discount.

“The burden is on them to come in and execute the document,” Commissioner Andy Skidmore said after County Attorney Jennifer Scragg Karr asked the commissioners on Tuesday if they would like to go ahead and sign their end of the agreement.

Skidmore said he’d consider requesting a special meeting before July 1 to approve the deal if the company “would actually take the initiative.”

Officials said they’ve notified the company several times of the upcoming deadline, but said the company might be having trouble getting its attorneys to sign off on the deal because it was recently part of an international merger. Skidmore said the county was originally working with a company called Ludowici, an Australian company that Denmark-based FLSmidth bought in July 2012.

Further complicating things, David Warner, executive director of the state Economic Development Authority, has said his organization also won’t close on its April agreement to purchase the company’s land and buildings for $11 million until the county and company approve the tax deal.

If the state buys FLSmidth’s property, the company would be required to then rent it back for 20 years at about $53,300 per month, plus a $100 monthly service fee, Warner said.

The deals are part of an economic incentive. Warner said the company, which was operating in Chapmanville but needed to expand, was looking to build in locations outside West Virginia, so the state offered the purchase agreement to keep it here. FLSmidth is expected to employ 85 workers within three years, and Commissioner Steve Andes says it had 66 as of late February.

The proposed deal between FLSmidth and the county is called a payment-in-lieu-of-taxes, or PILOT, agreement. It’s meant to ensure that the company still pays the county property taxes — albeit at a discount — after the Economic Development Authority, which is an untaxed governmental body, buys FLSmidth’s land and buildings.

FLSmidth hasn’t explained why it wants to sell the property — the company’s cost to rent it back from the state for two decades would be $12.8 million, more than the $11 million the state will buy it for. But without the sale, the PILOT deal is unnecessary because the company will be required to pay its normal share of property taxes.

FLSmidth, which manufactures and supplies equipment and services to the international minerals and cement industry, has said it won’t comment on the deal. The company began operating in the Putnam Business Park without obtaining the required certificate of compliance from the county, said John Butterworth, a county planner.

Also Tuesday, Hurricane City Manager Ben Newhouse asked the County Commission to provide $20,000 to $25,000 toward a new bridge to replace the current one-lane bridge leading into City Park.

Newhouse said the estimated cost is about $325,000, though he said the project is yet to be bid. He said the state Division of Highways has agreed to pay 80 percent, about $260,000; the city is planning to give $25,000; and Delegate Troy Andes, R-Putnam and Steve Andes’ son, has steered $20,000 in state funds toward the bridge.

The city wants to build a two-lane bridge with at least one pedestrian walkway intended to relieve traffic coming off of Teays Valley Road. Commissioners said Tuesday they didn’t know whether funds are available or when they might make a decision.

Reach Ryan Quinn at ryan.quinn@wvgazette.com or 304-348-1254.


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