Carol Johnson, Southern Indiana Business Report
BEDFORD – An ongoing building expansion at CAP Inc. will add 190,000 square feet and up to 50 new employees at the Bedford factory.
The estimated total investment in the project is $7.5 million. The additional jobs will generate $1.5 million in wages.
CAP Inc., 1005 Fourth St., uses a fully automated pressline and four manual presses to trim and finish auto parts, primarily for the Bedford GM plant, located nearby. The factory opened in 2017 in what was previously a limestone mill and aluminum recycling plant.
In February, the Bedford City Council approved tax abatement for the expansion. The council had two abatement options, a 10-year abatement that would start at 100% and gradually decrease each year until the end of the abatement, and a 64% abatement over 10 years.
The 64% abatement had been available to CAP because of its location within the Bedford Urban Enterprise Zone. CAP developed the building project with the expectation it would qualify for those abatement terms. However, the opportunity zone expired at the end of 2023, before CAP could make its abatement application.
At CAP’s request, the council approved a 10-year abatement of 64% of the building’s assessed value. The council also approved a 15% tax abatement fee, which will be paid to the Bedford Redevelopment Commission. The RDC uses its funds for city improvement projects.
CAP will realize an estimated savings of $606,000 over the 10-year abatement period.
The city will still collect about $440,000 in taxes from CAP over the 10-year period.
Shance Sizemore, CEO of Lawrence County Economic Growth Council, presented the abatement proposal to the city council and Doug Conrad, one of the partner/owners of CAP, spoke about the project.
Sizemore estimated the building, which is to be completed in June, will assess at around $3.5 million.
Tax abatement has its critics, but it continues to be a useful tool for local governments to attract and retain business.
“Showing and supporting business expansion is an important piece of tax abatement. These projects are competitive. (CAP) makes their bids to their customer – in this case GM, based upon their cost estimates and that includes new taxes,” Sizemore said. “When they’re in a competitive project with other companies that do this type of work, these savings let them be more competitive, which lets them get the work and hire more employees.”
“The city looks at this as economic development because it’s pulling jobs in,” said Bedford Mayor Sam Craig. “A lot of these companies, if they don’t get these incentives, they could look elsewhere.”
The CAP expansion will also produce new jobs.
“With the expansion and the 50 new jobs, even with abatement, they will still be paying taxes and that’s revenue we wouldn’t have,” Craig added.
“CAP is a good company, a growing company and they’ve been great to work with,” Sizemore said.
CAP is constructing a building that can accommodate future growth or possibly a new tenant. About 60,000 square feet will be set aside for undetermined use.
“It’s already drawing interest,” Sizemore said. “So there’s more opportunity for job growth and additional property investment.”
CAP Inc.’s growth on the city’s north side has not only added jobs and improved the tax base, but the company took what was a dilapidated old stone mill, cleaned it up, expanded it and made it productive again.
CAP also purchased the former Oakland City University and original home of Indiana Limestone Co. at 405 I St. and restored the 1926 building for use as a business center, performance and event space.
Continued investment by existing businesses is another benefit of tax abatement, Sizemore said.
“Eighty percent of growth comes from existing companies that already reside in a community,” he said. “New projects are great and important too but we know from our business retention and expansion efforts that existing companies need and appreciate the community’s support to grow and expand.”