10 - Aequs Aero Machine formerly T & K Machine - tax collection in connection with a terminated tax abatement

Home Browse Search

Item No. 10 memorandum TO: City Council Gene Anderson, Interim City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: AEQUS AERO MACHINE (FORMERLY T & K MACHINE) REPAYMENT OF ABATED TAXES DATE: February 4, 2020 BACKGROUND: In December, council terminated a tax abatement with Aequs Aero Machine (formerly T & K Machine) pursuant to an understanding with the company that it would pay back abated taxes without need for any legal action. The taxes abated under the agreement plus interest total $9,631.31. In order to assist Aequs in its financial planning and capital improvements program in order to be competitive in a changing marketplace, the city agreed to postpone a demand for repayment to after April 1, 2020 and to accept repayment in two installments. Aequs currently employs 36 people, with five hired on in the last month. The company has also purchased one new $490K CNC machine that is being installed this month, and it is planning on spending $1.0- 1.3M on additional CNC machines and capital equipment this next fiscal year. STATUS OF ISSUE: Aequs has now asked that they be allowed to repay the taxes with one installment being due and payable in April, and the second installment being due and payable in October, again, in order that they might responsibly plan their fiscal year and their capital improvement program. As can be seen by the 5 new hires in the last month, Aequs is working hard to grow the company and to restore it to fiscal health. BUDGET: Minimal impact on the budget. RECOMMENDATION: Provide direction to city attorney regarding repayment schedule of abated taxes by Aequs Aero Machine.