Salem working on company tax deal

By D.A. Wilkinson

The rebate would be the first under a 2007 ordinance.

SALEM — Salem officials say they can’t remember the last time they were able to offer a tax savings to help a new business.

But officials say they are in the process of approving a tax break to Flex-N-Gate in Urban, Ill.

The company earlier this month bought Blackhawk Automotive Plastics of Salem in U.S. District Bankruptcy Court for $16.4 million. Flex-N-Gate, like Blackhawk, makes car parts.

The sale was to close March 14, and before that, Flex-N-Gate asked for the income tax savings.

Last year, council passed an ordinance that would give companies that created or brought in new jobs a 0.5 percent rebate on the city’s income tax. The city has a 1 percent income tax.

Flex-N-Gate officials submitted their request the week before the sale, officials said.

A lawyer for Blackhawk had disclosed plans by Flex-N-Gate Corp. to close operations at a plant in Mason, near Cincinnati, and consolidate into the Salem plant.

Flex-N-Gate officials could not be reached to comment.

Mayor Jerry Wolford said the Salem plant has been employing about 800 people.

Flex-N-Gate would have to submit information about its new workers and pay the taxes that would then be rebated about six months later, according to Fred Pamer, the the city’s income tax director.

The number of new workers involved in the rebate is confidential under the ordinance to prevent prying by other companies.

The mayor and Councilman David Nestic, chairman of council’s economic development committee, said the savings to the company won’t be that big.

Still, Wolford said, “We’re trying to do as much as we can.”

The company’s Web site has a long statement about its beliefs, which include working with communities and protecting the environment.

A number of Salem’s manufacturing plants have closed over the years.

This rebate will be the first under the ordinance.

Pamer said the oversight committee will meet to make sure the city has the proper steps in place and are followed under the ordinance. No date has been set for the meeting.

But officials agreed it was nice to be working on creating jobs instead of seeing jobs disappear.

The city has had a similar ordinance for years that would allow a partial property tax rebate on renovation or construction.

Nestic said the oversight committee should have its structure ready next month.

wilkinson@vindy.com