Elkhart council approves tax-phase benefits for Philip Matthews Company after debate over TIF, wages and documentation

The Elkhart Common Council voted to adopt Resolution 26-R-1, declaring an economic revitalization area for Philip Matthews Company and approving a three-year real-property tax phase-in tied to a planned $10,116,700 investment and the creation of 20 new jobs. The measure passed by roll call, 6-2.

Drew Weiss, economic development staff, described the project and recommendation: "This project involves a $10,116,700 investment in a new building construction, and PMC plans to add 20 new jobs with an average annual wage of $46,384," he said. Weiss told council the company's planned site is 1100 Mishawaka Street and staff recommended a three-year phased tax abatement.

Council members pressed staff and the company for details. Councilman Mishler raised a procedural and fiscal concern: he asked whether the proposed location is inside a Tax Increment Financing (TIF) district (the Tech Park) and warned that moving a company already contributing to the tax base into a TIF could lock increment inside that TIF and withhold funds from the general budget during the abatement. Mishler also flagged inconsistent figures between documents: an application listing the current assessed value of the property as $900,000 versus an SP-1 form showing $157,900, and land-acquisition numbers listed as $881,000 versus $877,000.

Michael Lee, president of Philip Matthews Company, responded to wage questions and said the firm has been steadily increasing pay and uses incentive pay that is not fully reflected in the base-wage figures on the SP-1. "When we input that into the base wages, we push about close to the $45,000 a year mark for our production employees," Lee said, adding that some low-entry production roles appear on the sheet but actual total compensation is higher because of line incentives and other pay components. Lee confirmed the new facility will be a roughly 133,000-square-foot building with room for a 60,000-square-foot expansion.

Council members also asked about environmental safeguards. Lee said the company had installed a closed-loop water treatment system and removed chemicals that would otherwise enter wastewater, and stated that the only sewage would be normal bathroom and kitchen wastewater.

Before the roll call, Councilman Mishler requested referral to the tax abatement committee to reconcile numbers between the application and the SP-1 and ensure council evaluation rests on consistent documentation. Development Services Director Mike Huber said the SP-1 is the governing document for abatement decisions and that applications collected by the EDC are informal starting points.

On the roll call, several members recorded "aye" and two recorded "no"; the clerk announced the resolution adopted 6-2. Council did not record amendments to the measure; the resolution will proceed under the usual implementation and reporting rules associated with economic revitalization area designations.

Votes at a glance

- Resolution 26-R-1 (Economic Revitalization Area for Philip Matthews Company): Adopted by roll call, 6-2. (Council recorded a 6-2 tally; individual roll-call lines are in council minutes.)