Nappanee council considers tax abatement for Fairmont’s new owners

DENISE FEDOROW | THE GOSHEN NEWSThis is a preliminary conceptual drawing of the proposed pavilion to be built downtown. The plans are subject to change but a preliminary plan has to be submitted with the state to get permits and to move the project forward. 

NAPPANEE — Nappanee City Council members on Monday took the first step in granting a proposed tax abatement to new owners of Fairmont Homes. 

“We don’t grant many tax abatements,” Mayor Larry Thompson told the group of men from Cavco Industries. “We’ve been fortunate, but at the same time we’ve had pretty good growth.”

City attorney Brian Hoffer explained that the resolution before the council was the first action necessary to granting a tax abatement and it was indicating support of the abatement and confirming that it would bring economic development.

The proposed tax abatement involves two categories:

• $850,000 for manufacturing equipment and the abatement would be for five years beginning July 1 and ending Dec. 31, 2009; and

• Information technology equipment in the amount of $80,000 and will be in effect from July 1- Dec. 31 of this year.

Hoffer explained the resolution for tax abatement follows the standards city officials set in 2003.

The next step would be to set and hold a public hearing on the matter and then a final determination on whether to move forward with the tax abatement.

Steven Like, senior vice-president of Cavco Industries, was present at the meeting with a couple of other members of Cavco’s team. He gave a brief introduction of the company. He said Cavco was founded in 1965 and is a manufacturer of park model homes and manufactured housing. It has 3,800 employees — 1,800 of which are in manufactured housing — and has $560 million in revenue. He said they’ve had growth over the years, mainly through acquisitions. He said they were number 13 on the Forbes best small businesses list and were voted manufacturer of the year for six consecutive years.

“We take our responsibilities to our constituencies seriously and we intend to have a long-term partnership with the city of Nappanee,” Like said.

Thompson said he is at ease knowing “The Shea family (local owners of Fairmont Homes and Gulfstream) would not have entered into this if they didn’t think you were going to continue (operations) and make it better. Fairmont has meant a lot to us.”

The council approved the resolution for Fairmont Homes LLC.

After the meeting, Like explained that Cavco acquired both Fairmont Homes and Friendship Homes, a division of Fairmont in Minnesota. The 550 employees (250 of which are in Nappanee) will maintain their jobs. Like said they are keeping the Fairmont and Friendship Homes names, stating that both have “good brand recognition.” The closing date was May 1 for the sale of the business.

Like said with the combined purchasing power and resources they’ll be able to bring “our expectation is to improve the business.”

The Shea family maintained the Gulfstream division of the business.

Public Hearing

A public hearing was held on the annexation of Specialty Hardwoods and Roman and Deb Lehman’s property (SHI Realty LLC and Access Two N One LLC) before the second reading of the ordinance to annex the properties.

No one had any comment on the matter. Hoffer reminded the council that this annexation was possible due to legislation that passed allowing annexations outside of municipalities if those annexations are pursuant to an industrial park.

This annexation is also at the request of the property owners, whose properties are close to the Nappanee Municipal Airport.

The annexation request passed on second reading.

In other business, council members:

• Heard that the municipal pool is open and that summer programs are in full swing. Twenty-six children are signed up for Nature Camp this summer.

• Heard the Madison Street brick project is going well and that they hope to have the 100 block open by this weekend. The Stauffer Park Bridge is gone and the city is awaiting the new bridge.

 

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