Navistar and Damewood Enterprises have asked for a tax break for a roughly $12 million project that could retain more than 100 jobs in Champaign County and add about 40 new positions.
The businesses asked local school districts and the city of Urbana to approve a 10-year, 100 percent real property tax exemption to offset start-up costs and other business expenses, allowing Damewood to build a warehouse on a 35-acre property at 915 Phoenix Drive.
Navistar would retain 114 employees at its current facility at Edgewood Avenue, transfer 27 employees from a site in Bellbrook and hire an additional 39 full-time employees as a result of the project, according to documents sent to the Urbana City School District. Total payroll associated with the project is estimated to be about $6.8 million.
“While there are less expensive options, Navistar would like to continue to support Champaign County and their existing employees through additional investment,” the companies stated in a Community Reinvestment Area application. “Without the requested tax incentives, the business case associated with construction of a new building becomes difficult, if not impossible.”
The roughly 356,000-square-foot warehouse would allow Navistar to consolidate operations and provide adequate space for storage as part of Navistar’s joint venture with GM.
Navistar employs more than 1,500 workers at its Springfield plant and thousands of retirees also live in the area. Employment is steadily growing locally after the truckmaker previously announced two separate deals to build GM vehicles in Springfield.
Navistar will begin production of a cutaway model of GM’s G Van beginning early next year. The companies have also reached a joint agreement to build medium-duty trucks in Springfield.
Representatives for Navistar were unable to provide further details of the proposal Thursday. Damewood Enterprises officials didn’t return calls seeking comment Thursday.
If approved, the project would begin in March 2017 and be completed by the end of the year, according to the application. The project would add about $1.9 million in new payroll.
Damewood Enterprises would own the property and lease the newly constructed facility to Navistar. The tax exemption would go to Damewood as the property’s owner, while Navistar would be responsible for job creation.
Urbana City Council members are expected to take formal action on the deal at a Feb. 21 meeting. Board members at the Urbana City and Ohio Hi-Point school districts would also have to approve the tax breaks before it could move forward, said Marcia Bailey, economic development coordinator for the Champaign Economic Partnership.
“It’s a big win to save 114 jobs in our community and then also gain new jobs and transfer folks to our area and be able to retain their jobs, too,” Bailey said.
Earlier this week, Navistar reported a net loss of $97 million this year as the heavy truck market remained weak. But analysts said the recent deals with GM, as well as a pledge from Volkswagen to invest $256 million in the truckmaker is a good sign for its workers in Clark and Champaign counties.
Company officials said Tuesday the new partnership with Volkswagen shouldn’t have a significant impact on the GM deals.
“With Navistar’s continued growth in Clark County, we should see more of these kinds of things going between both our counties,” Bailey said. “When something happens in Clark County it definitely impacts Champaign. We’ve always been seen as a north-south county between the two of us and this re-emphasizes the importance of Navistar for both our communities.”