Elkhart council approves repayment agreement with Champion Manufacturing after tax-abatement noncompliance

The Elkhart Common Council on March 3 approved a repayment agreement requiring Champion Manufacturing Inc. and County Road 17 Land Development to repay abated tax benefits the city says the company did not earn, the council’s roll-call vote showed the measure passed 9-0.

The resolution closes a compliance review that found Champion did not meet the terms of its five-year tax phase-in. City staff and legal counsel told the council the statutory formula yielded a 40% compliance metric and a 60% noncompliance figure, and the city used that calculation to determine the amount to recover. The company and the property owner agreed to place half the required repayment on this year’s spring tax installment and the remainder on next year’s spring installment.

City economic development and legal staff explained the procedural background to the council. Mike Huber, director of Velma Services for the City of Elkhart, said the company had a spotty record of compliance during the phase-in and that the city quantified the recoverable benefit under the statutorily prescribed method. Janus, corporation counsel, summarized the formula and the administrative steps that preceded the repayment agreement and said the amount recovered was the full amount the city is authorized to reclaim under state law.

Several council members pressed city staff about additional costs and fairness. Councilmember Henke and others asked whether the city could recover attorney fees or interest; Janus explained that Indiana law allows recovery of attorney fees only after administrative remedies are exhausted and the city files suit and prevails in court. The council also heard that County Road 17 LLC, the property owner, will be listed on the tax bill and will make the payments; the owner retains contractual remedies against Champion to recover amounts paid.

Council members asked for and were given clarification about past compliance timelines: staff said Champion met compliance benchmarks in some years but overall performance produced the 40% compliance figure used in the formula. Officials said this was the city’s first full clawback in recent years and that staff would continue to follow the statutory recovery process if parties could not agree on a payment plan.

The resolution was introduced as proposed resolution 25-R-04, moved by Councilman Henke and seconded by Councilman Fish, and passed by voice and roll-call vote (aye: Councilmen Holtz/Holt, Curry, King, Mishler, Fish, Hines, Crabtree, Henke, President Dawson; 9-0). The council directed staff to proceed with the agreed payment schedule and to return if further legal steps were required.

The repayment agreement does not include a separate authorized award of attorney fees at this stage; staff told the council the statutory procedure for recovering attorney fees would require litigation and a court award before such fees could be charged to the taxpayer.