A standard 12-year tax abatement was approved Monday for Morenci’s General Broach Company, although the decision wasn’t completed without some discussion on the issue of tax breaks.
Mark Miller and Larry Stover of General Broach explained the need for new equipment during a public hearing at the city council hearing.
A few years ago, Miller said, about 90 percent of the company’s business was related to the automotive industry. Today, about 85 percent of the cutting tools they produce are for use in the aerospace industry.
Stover said the company is not only changing the focus of its work, but it’s also broadening its horizons with contracts from other countries.
Former planning commission member Gary Valentine stated that granting an abatement doesn’t guarantee that a company will remain in town, even though a business may threaten to leave if an abatement isn’t granted. When he was a commissioner, an abatement was approved for Morenci Engineered Rubber Products, he said, and the company was gone within a year.
“Sometimes we need to watch what we’re doing here because it will be with us for a long time,” Valentine said.
He asked what an abatement on $852,000 equates to in lost taxes, but neither General Broach nor city officials had an answer.
Stover was asked about job creation and he noted the company employed 45 workers five years ago. The current level is at 74. There was very rapid growth and much slower growth currently.
Additional overseas contracts would increase job needs, he said, as would new ventures such as creating broaches to serve the rapidly growing wind energy industry.
Granting abatements, said councilor Keith Pennington, shows the city’s support for an industry, and the 50 percent of taxes still paid is better than none at all.
A tax break not only helps a company stay in town, said mayor Doug Erskin, but it allows the company to explore other development.
“We want to progress,” he said. “If we limit them, no progression is made.”
Pennington added that attention is often focused on bringing in new companies, but council can’t minimize what’s already here providing jobs.
“We’re here to stay, believe me,” Stover said.