City officials to vote on Rexnord’s $381K tax-break clawback

The Indianapolis Metropolitan Development Commission will decide next week whether to terminate a personal property tax abatement previously approved for Rexnord Corp., which is in the process of moving its Indianapolis operations to Mexico and laying off hundreds of local workers.

In the meantime, workers at the plant have approved a severance deal with the company that includes six months of health care coverage. The layoffs are expected to start in February, according to a state filing.

The MDC is scheduled to meet Wednesday and vote on the resolution, which would allow the city to claw back $380,765 in previously doled out incentives to the company and terminate the 2009 tax abatement agreement.

The resolution directs Rexnord to pay back the money by Jan. 21 and authorizes the Department of Metropolitan Development “to take such action as is necessary to recover said damages should they not be timely remitted.”

Once the money is returned, the City-County Council would appropriate the funds to local taxing units.

Democratic Councilman Jared Evans said “we should absolutely try to get back every nickel and dime we can.” He said he would work with the mayor’s administration to brainstorm a way for the money to benefit Rexnord employees.

“I’m not going to allow the funds to disappear if we feel like we can benefit workers,” Evans said.

Mayor Joe Hogsett previously made the clawback request in a letter to the company sent in mid-November. The company had 30 days to meet with city officials to show why it should not have to repay the incentives.

The company did not reply on Friday morning to IBJ’s request for comment.

Rexnord—a Milwaukee company that operates a bearings plant in Indianapolis which employs about 350 people—garnered national attention this year as a symbol of outsourcing after President-elect Donald Trump focused attention on the company.

The company announced in October it was considering moving operations to Mexico. It reached a final decision in November.

"Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers,” Trump tweeted in early December. "This is happening all over our country. No more!"

Evans said he still hoped there would be a deal to save the jobs, although, he said, he hasn’t heard any indication that would happen.

“I truly pray and I hope his tweet was a tweet of real concern and it wasn’t about getting more press,” Evans said. “There’s a lot of families, 350 families, very hopeful that he's going to try to do something.”

Rexnord workers approved a severance deal with the company on Friday, which will give them a week’s pay for every year of service at the plant, as well as a lump sum of $2,000. The company will also pay for employees’ health care for six months.

Chuck Jones, President of United Steelworkers 1999, said he was also in favor of the city clawback.

“If they’re just going to leave this country and move out of it they should be required to pay back the taxpayers,” Jones said.

Jones said he was still interested in working with Trump on a possible deal, but he said “we haven’t gotten any response.”

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