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MacAllister seeks $2.7M tax break from city on HQ project

October 14, 2014

MacAllister Machinery Co. Inc., the longtime distributor of Caterpillar equipment, is asking city officials for about $2.7 million in tax breaks on its massive new headquarters campus planned for the southeast side of Indianapolis.

The project entails building and equipping a 300,000-square-foot office and service complex on 133 acres at 6300 Southeastern Ave. It would more than triple the size of its current headquarters at 7515 E. 30th St.

On Wednesday, the city’s Metropolitan Development Commission will hear MacAllister’s request for tax abatements on $25 million in real estate for the project and $2.4 million in information-technology and manufacturing equipment. The amount saved by the firm between the two 10-year abatements would be about $2.7 million.

When plans for the project were announced last month, its total cost was estimated at $44.5 million. It was not immediately clear Tuesday why the tax-abatement request to the city would cover just $27.4 million in investment. MacAllister officials weren’t available for comment Tuesday morning.

Founded in 1945 by P.E. MacAllister, MacAllister Machinery sells Caterpillar construction, mining and power-generation equipment, in addition to offering equipment from other manufacturers.

The new facility, which will house sales, rental, parts, equipment service and administrative operations, is expected to open by December 2016.

The headquarters campus would include 30,000 square feet of office space, an 8,000-square-foot technology center, a 180,000-square-foot service and repair center, and a 40,000-square-foot storage building, as well as areas for equipment display and storage.

MacAllister says that the project will allow it to retain 353 of its local employees and add 70 more over five years. The current employees will make about $40 per hour, and the new employees will earn about $25 per hour.

Over the 10-year real property tax abatement, MacAllister would save $2.56 million, or 49.5 percent of its taxes. It still would pay $2.6 million of its tax bill, and then an estimated $517,125 annually in real property taxes after the abatement expires.

Under the 10-year personal property tax abatement for the equipment, MacAllister would save about $148,000, or 59.8 percent of its taxes. It still would pay about $100,000 of its tax bill, and then an estimated $21,276 annually in personal property taxes after the abatement expires.

MDC staff has recommended approving the abatements.

The preliminary abatement requests from McAllister are set to be heard at the MDC meeting at 1 p.m. Wednesday. If approved, they would be scheduled for public hearings and final approval at its Nov. 6 meeting.

The Indiana Economic development Corp. also has offered MacAllister Machinery up to $1 million in conditional tax credits based on the company's job-creation plans.
 

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