New Hostess owners want abatement for equipment

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The new owners of Hostess Brands are seeking a tax abatement to support investment of $10 million in new equipment for a plant on the east side that could employ up to 145 people.

Private equity groups Apollo Global Management and Metropolis & Co. announced in April that the Indianapolis facility, at 2929 N. Shadeland Ave., is among those it plans to reopen. The company applied for the abatement on May 28.

In its application, set for an initial hearing June 19, Hostess Brands says it "anticipates the need" to invest the money in "new manufacturing, logistics and information technology equipment."

The application describes the 145 positions as "new jobs created" and specifies an average wage of $16.82 per hour. About 300 people had been working at the facility when it closed in November.

The eight-year tax abatement would save the company an estimated $536,220, or about 62 percent, on the personal property portion of its tax bill. The company would pay an estimated $333,780 in personal property taxes related to the new equipment, the city estimates. After the abatement period, the $4 million of assessed value would generate about $90,000 annually in taxes.

If the company makes the investment and the assessment estimate holds true, Hostess' personal property would be worth more than double what the current  assessment for equipment.

The company's personal property at the Shadeland Avenue plant is assessed at about $1.8 million, records show, while real property is assessed at about $3 million.

Assessor's Office records accessed online show Hostess' previous owner owes property and personal property taxes of about $160,000.

Hostess has since paid off its real property tax bill and will be required to bring its personal property tax bill up to date before the abatement hearing can proceed, said Ryan Hunt, a senior project manager for the Department of Metropolitan Development.

Apollo and Metropolis paid $410 million to buy the Hostess and Dolly Madison snack cake lines as well as five plants after the company's liquidation process began in November 2012.


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  1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.