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West Lafayette City Council spars over tax abatement for aerospace company Rolls-Royce

Mayor John Dennis joins Development Director Erin Easter during Monday’s city council meeting (WBAA News/Ben Thorp)
Mayor John Dennis joins Development Director Erin Easter during Monday’s city council meeting (WBAA News/Ben Thorp)

Members of the West Lafayette City Council sparred over a tax abatement request from aerospace company Rolls-Royce during Monday’s meeting.

In April, Rolls-Royce announced an over $200 million dollar expansion of its facilities in West Lafayette. As part of that expansion, the company has requested a five-year tax abatement.

But council members David Sanders and James Blanco both took issue with that ask. Sanders took the lead on questioning Rolls-Royce representative Warren White, reading out the definition of an economic revitalization area and asking which part of the definition applied to the Rolls-Royce site.

“You believe that this place is undesirable for normal development, that’s your argument here?” Sanders asked.

“Sir, I’m not making an argument here,” White responded.

“That’s what you just said,” Sanders continued. “That’s what it says here - undesirable or impossible for normal development.”

Sanders' back and forth with White continued after Erin Easter, West Lafayette’s director of development, tried to step in. He eventually suggested that the city should negotiate a lower abatement for the company.

“None of this addressed why they need this tax abatement. I don’t think they are going to walk and I’d like to test this hypothesis,” Sanders said. “They are requesting five years at 100% - what about two years at 50%?”

West Lafayette Mayor John Dennis then rose from his seat in the auditorium and dragged a chair to sit beside Easter and White.

“David, do you have anything constructive to say? If not, I’d ask that you go ahead and surrender your mic,” Dennis said.

“You’re being absolutely rude and indignant to somebody who is willing to invest in this community and provide jobs and a high quality of life to people,” Dennis continued, to a smattering of applause. “Enough is enough.”

Several councilors then jumped in to speak in support of the project, noting that the abatement wouldn’t be felt in the city’s budget.

“The five-year window that we’re abating here is within the time window where excess revenue is coming out of the TIF district that Purdue is entitled to,” Councilor Nick DeBoer said. “So the net cost to the city of West Lafayette is zero.”

In 2015, the city of West Lafayette joined in an agreement with the Purdue Research Foundation and Purdue University for a $120-million dollar development project along State Street. That agreement included creating a Tax Increment Financing (or TIF) district, meaning that increases in property taxes in a region don’t go into the city budget, but instead towards paying down the cost of developments.

Because of that TIF district, Erin Easter said the city wouldn’t see any of the money from a five-year tax abatement.

“It’s not like we’re going to miss the money,” she said. “We’ll never know it was there in the first place. The impact to the city is really minimal – we wouldn’t be seeing those TIF district funds until 2039-2040 timeframe anyway, because of how that deal is structured.”

Approving the abatement required the passage of a three-package resolution creating an economic revitalization area. During voting, Sanders again brought up his concerns about Rolls-Royce.

“Just want everyone to remember that in 2017, Rolls-Royce had to sell over $800 million dollars to settle bribery charges in the United States,” Sanders said. “There was an extensive investigation in the UK for substantial bribery of government...”

Council President Peter Bunder cut Sanders short.

“I’m going to say you’re out of order,” he said.

The package passed on a 7-2 vote. After the back and forth of the hours-long meeting, two residents addressed the council during the public comment period.

Steve Shreckengast said he hadn’t planned to comment, but felt that Sander’s comments had been out of order.

“As a citizen, I’m concerned by what I’ve observed tonight – how one member of this body can monopolize so much time with his partisan approach to government,” he said. “I would ask you, President Bunder, to limit the amount of time a person can grandstand.”

But resident Roberta Schonemann seemed concerned about how West Lafayette could be shaped by the corporations coming to town.

“When I hear you talking about the future of this community it’s so different than I visualize,” she said. “I see us becoming the center of warfare industry, which is – again – so far from the kind of climate in which I’ve spent the last 47 years and hope to be able to spend a couple more.”