LAGRANGE — The LaGrange County Council on Sept. 13 approved a more than half-million-dollar tax abatement over the next 10 years for a Shipshewana RV manufacturer that is making a series of improvements at its facility.
The council approved a proposed tax abatement agreement between the county and KZ-RV. The abatement covers more than $9.5 million of real estate and property improvements the company is making.
LaGrange County Economic Development Corporation President Bill Bradley presented the tax abatement to the council.
Bradley recommended the company receive a 10-year abatement on real estate and five-year abate on personal property. He said that abatement would save the KZ-RV about $525,000 in taxes over the lifetime of the agreement.
Bradley said the ongoing expansion at the Shipshewana firm is expected to add at least 160 new jobs to the KZ-RV payroll.
Debert Miller, KZ-RV’s vice president of corporate and industrial relations, told council members his company was asking for the abatements in light of new business challenges facing RV manufacturers.
“The industry has been blessed with good response from customers. Our sales are up and we need to expand,” he told the council.
Miller added that LaGrange County has been KZ’s home for almost 50 years and said the company plans to stay here.
Miller said KZ is expanding its warehouse to solve logistics problems, adding a new service center, replacing older infrastructure, upgrading machinery, and expanding production.
Miller said those improvements would translate into new jobs
“As Bill said, 160 new jobs is the projection, but I think we’re going to exceed that,” he told the council members.
Bradley called the expansion “exciting.”
When asked by council members about the difficultly of finding new employees, Miller said it’s a day-to-day challenge faced by all manufacturers.
“Our workforce is changing, there’s no doubt about that,” he said. “We were considering other options. There are places where there is underemployment. But the benefit for us in LaGrange County is that we get the workers we need. Their work ethic is good, the trade practices we need are good across the county, and we’re just going to continue to compete for those people. We’re doing more training than we have in the past. We find that necessary. But we still find the best people for us in this area.”
Miller estimated about 70% of KZ-RV’s workforce calls LaGrange County home.
The council approved the tax abatement by a unanimous vote.
Bradley said considering the size of KZ-RV’s investment in improving its current plant, the abatement is a good deal for both the company and the county.
Miller said RV manufacturers are fighting to keep up with demand in today’s economy.
“We’ve been blessed,” he said of the recent demand for new RVs.
Overall the RV industry has setting record production numbers month after month as demand continues to grow. Even with production increases, demand is still outpacing production. Miller said industry insiders see little reason to believe that will change any time soon.
“In today’s economy, with all the things that happened last year between COVID and supply change issues, I wouldn’t be in a position to predict anything, but we don’t see any glitches. Demand just continues to increase,” he added. “We’re just working as hard as we can to keep up. It’s a great opportunity.”
Miller said the company is working on updating its original plant, but that KZ-RV owns an additional nearby 30 acres it plans to use for future expansion projects.
Miller said he appreciated the confidence the council showed KZ-RV and called the firm’s relationship with the county strong.
“This is our home, for sure,” he said.
Bradley said the size of tax abatement given to KZ-RV is fair considering the size of the investment the firm is making at its Shipshewana plant.
“For the investment they’re making, and the jobs they’re creating, yeah, this is fair,” he said.
Bradley said the ten-year abatement will work on a sliding scale, meaning the value of that abatement declines each year.
“The first year they get 100%, then 90%, and 80%, and down the line,” he said. “The good thing is, the way Indiana has put these together, it’s weighted heavily those first three or four years when you’re just starting a project, which is important because that when you have the greatest cost.”
Bradley said northeast Indiana is home to about 80% of the RV industry, and the large concentration of those companies are located in Elkhart and LaGrange counties.
Bradley called tax abatements a good local tool to help keep local jobs here.