Pioneer Aerostructures, which is building an aircraft parts manufacturing facility in Helena, is asking the city, as well as Lewis and Clark County, for a temporary reduction in its tax bill.
Tom Hoffman is the managing member of Pioneer Aerostructures, which filed an application with the city and county for a tax abatement provided by state law that allows local governments to grant the request for qualifying improvements or modernized processes for a new or expanding business.
A tax abatement would affect taxes that go to the school district, city and county.
The 32,000-square-foot building being constructed by Pioneer Aerostructures and the equipment it will contain is valued at a total $13,451,085, according to the company’s tax abatement application.
The new building alone is valued at $5.1 million, while milling machines and other equipment account for the remainder. Construction of the building is projected for completion in July.
The reduction in taxes, if granted, would extend from tax years 2015 through 2024, a city staff report notes.
The tax abatement would reduce the tax bill by 50 percent for the first five years, and then increase the value by 10 percent annually until the company is paying all of its taxes by the 10th year.
If the tax abatement were not granted, according to figures assembled by the Montana Department of Revenue, Pioneer Aerostructures would pay $1,762,398 during the 10 years that an abatement could be in place. If the abatement is granted, the company’s 10-year tax bill would be $1,201,661. The difference between the two figures is $560,737.
The tax abatement request is slated to be on city commission’s agenda June 23 and the county commission’s agenda June 24.
However, it’s likely the city will not make its decision on that date, City Manager Ron Alles said.
One of the commissioners will be out of town for that meeting and has requested a delay, he said.
A decision has yet to be made whether to wait two weeks before addressing the request or to begin the public hearing as advertised and continue it until the commissioner returns, Alles said.
Boeing and Summit Aeronautics Group have both received tax abatements in the past, Alles said.
Summit, which was started by Hoffman, was purchased by Boeing in November 2010.
The city manager said the request by Pioneer Aerostructures carries some of the same qualities as the tax abatement request previously granted to Summit and Boeing.
Eric Bryson, the county’s chief administrative officer, said on Monday that the county evaluates a tax abatement request by looking at what demand for services a new business might place on the county.
He did not see Pioneer Aerostructures as placing a significant burden on the county for fire protection or law enforcement services.
The new business will still be paying half of its total tax bill, he noted of the first five years of the 10-year schedule for reducing taxes for the new businesses.
Bryson has not heard any opposition to the proposed tax abatement and said he would look to the upcoming public hearing for comment on the proposal.
Companies that start up in the area and pay good wages should be encouraged, Bryson said.