Council approves tax abatements for Caterpillar expansion at Lebanon Business Park

Lebanon City Council on Monday approved a resolution granting tax abatements to support Caterpillar’s proposed expansion at 475 South Mount Zion Road in the Lebanon Business Park.

The move clears a four-year personal property abatement for Caterpillar and a four-year stepped real property abatement for the property owners, CIVF and Cabot, after the council found the project met statutory criteria for an economic revitalization area.

The recommendation came from Andrea Kern, chief executive officer of the Boone Economic Development Corporation, who told the council Caterpillar plans to expand its existing facility by about 370,000 square feet and invest roughly $25,000,000 in real property and $35,000,000 in personal property — a total investment the EDC described as $60,000,000. "Caterpillar plans to expand their existing facility by roughly 370,000 square feet, investing 25,000,000 into real property and another 35,000,000 into personal property, totaling 60,000,000 in investment," Kern said.

Eric Newkirk, director of real estate and economic development for Caterpillar, said the expanded operation would shift the facility from warehousing to a pre-assembly and kitting operation supporting Caterpillar’s larger engine center in Lafayette. "The facility would technically, from an internal perspective, be run by Cat Logistics," Newkirk said, describing Cat Logistics as a wholly owned Caterpillar subsidiary that provides supply-chain services.

Under Resolution 2025-18, the council approved personal property tax deductions for Caterpillar at a steady 30% each year for four years and a real property tax deduction for CIVF structured at 50% in years one and two and 25% in years three and four. The council’s formal findings as read into the record cite the applicants’ SB-1 filings and list the council’s determinations that: the estimated $35,000,000 cost for new logistics equipment and $25,000,000 cost for expansion are "reasonable;" the project is located in an area previously designated an economic revitalization area; the estimate of about $31,139,350 in aggregate annual salary and an estimate of roughly 550 new jobs "can reasonably be expected to result from this proposed project." (Those figures are taken from the SB-1 forms submitted by the applicant and summarized in the resolution.)

Council members asked clarifying questions about the scope and timing of the work. Newkirk said if internal approvals proceed and the landlord (Cabot Properties) begins construction, building work could start this year and the operation is expected to ramp up over the next two to three years.

The council approved the resolution by voice vote; the clerk was directed to file a certified copy with the Boone County Auditor as required by state law. No roll-call tally was recorded in the meeting transcript.

The city and Boone County can expect additional assessed value from the project and, according to the EDC presentation, a projected local income tax impact and a payroll benefit to local businesses. The council’s resolution states the totality of benefits justifies the abatements under Indiana law.