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Pioneer Aerostructures asks for temporary tax reduction

Would reduce taxes paid by total of $560,000 over 10 years
2014-06-17T06:00:00Z 2014-06-25T00:20:45Z Pioneer Aerostructures asks for temporary tax reductionBy AL KNAUBER Independent Record Helena Independent Record
June 17, 2014 6:00 am  • 

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.

Copyright 2015 Helena Independent Record. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(3) Comments

  1. landcair
    Report Abuse
    landcair - June 18, 2014 6:47 pm
    I hope they approve this for Pioneer! What an outstanding boost for this community. Opening up yet another state of the art facility with the ability to make complex aircraft parts right here in little Helena, MT and giving people more choices of where they would like to work. The amount of high paying technical jobs that this company can offer up to our local people is far above a $560,000 tax break over ten years. Consider the amount of auxillary supporting businesses that will benefit from this company starting up, many of which may have lost sales do to "out of state" companies when industry giant Boeing came to town. Also the opportunities for employees and there families. We should take care not to throw too BIG of stones to soon as it may be you someday job searching in MT for a high paying technical career. We should embrace this opportunity and potential for the community...not condone it! After all in a small community help and encouragement is what we should do for each other. Local supporting businesses, hotels, rental cars, airport, restaurants will all be benefiting from Pioneer opening its doors... and the Vo-tech. Keep the jobs local. Lets be thankful this didn't end up in Missoula...or out of state. Approve it...we want to encourage small businesses looking to come here to Helena, not repel them.
  2. j1helena
    Report Abuse
    j1helena - June 18, 2014 12:31 pm
    No, enu_22, you may not have an abatement. Only those who don't need the money may have one. Like Boeing. Pioneer will get a $500,000 gift from taxpayers. At the same time, taxpayers are asked to pay a little more for projects that benefit the public, like school bonding, the Fairgrounds, etc. Remember, too, that Tom Hoffman not only closed a county road for a while, but blocked a public easement across his land in the Deadman Creek drainage. (He does allow non-motorized access so that we peons can walk a mile.) Plus, he intentionally damaged the road by digging "tank traps" across it, even before the easement issue is resolved in court. So why shouldn't we do this guy a favor?
  3. enu_22
    Report Abuse
    enu_22 - June 17, 2014 11:16 am
    Uh...may I too have a tax abatement? Why should I have to pull the load for Pioneer Aerostructures?

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