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RV Manufacturer Risks Losing Tax Deal With County

Bruce Korenstra, interim VP of Travel Lite RV.

The following is a report from The Elkhart Truth.

An RV maker that received financial incentives from the county when it moved from New Paris to Syracuse is once again getting a lukewarm performance review. The Elkhart County Council on Thursday voted 3-3, with one councilman absent, on finding Travel Lite RV noncompliant with the terms of its incentive agreement. Council will have to revisit the vote next month.

The company had received a tax phase-in from the county when it made a $5 million investment in a new complex in Syracuse. Conditions for maintaining the economic benefits include meeting certain goals for investment and employment, such as keeping its current employees and adding new ones.

“Unfortunately, they’re not compliant in the jobs area. It’s shown a negative trend since last year, and we would support a non-compliant recommendation,” said Chris Stager, president of the Economic Development Corp. of Elkhart County. “They’ve met all the requirements relative to real estate and property investment. Unfortunately, the jobs and the overall wages fall very short of what the original promise was.”

In May 2017, Travel Lite announced plans to build a manufacturing facility, custom fiberglass business and full-service dealership. The company bought 27 acres in the industrial area north of Syracuse at U.S. 6 and S.R. 13.

Travel Lite was one of the first companies in the Syracuse Industrial Park and the county had approved a tax phase-in based on a request from the town, Stager said. He said the company received a 10-year term on a 2014 project and a five-year term on the 2017 move, so both agreements are close to the end.

Travel Lite faced challenges after the Syracuse move was announced, including a lawsuit, restructuring and layoffs. The company came under scrutiny several times in the past few years because of flagging performance.

It lost its tax phase-in between 2020 and 2021 after submitting compliance forms showing a total payroll of less than $10,000 — far short of the $7.1 million it had promised to pay to 142 new and existing hires.

Council voted in September 2020 to end the tax abatement after no one from the company attended a public hearing. They reinstated it the following June after Travel Lite submitted new compliance forms demonstrating that it met the investment and job creation goals.

Bruce Korenstra, interim vice president of Travel Lite, acknowledged the rocky history when he spoke to council.

“We want to extend our appreciation, because unfortunately I’ve been up here before and you’ve been cooperative. We’ve always tried to exceed your expectations and unfortunately we have not,” he said. “I basically come to you this year with the same story I had last year: That basically, the RV economy has slowed substantially, so it has not allowed us to really grow.”

He said on the positive side, Travel Lite exceeded its investment and wage targets. He said they put $100,000 into improving the grounds at the new headquarters.

“When it comes down to it, whatever you decide was best for Elkhart County, we just want you to know we appreciated the help in the past and hope we can finish out this abatement. It just has a few years left,” Korenstra said. “We did invest many millions of dollars into this facility. Our wages are also higher than what we projected. We missed the number of people, and I’m sorry for that.”

Council members who voted against allowing the deal to continue said they wanted to look out for taxpayer dollars.

“My concern was, when we give some kind of tax abatement, part of that is because we see a recession coming and we want people to invest during that time to try to even it out,” said Councilman Steve Clark. “It’s difficult to give tax incentives like that, and when things get tough, the company cuts anyway. I understand — if I was in your shoes, I’m not saying I’d do different — but from the county’s perspective, and me being representative of that, it’s challenging for me to support. You get the benefits, but we don’t get what the benefits were intended to incentivize.”

Click here to read the article by Jordan Fouts at the Elkhart Truth. Please note this article has a paywall.

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