Options floated for Getrag site
By KEN de la BASTIDE
Tribune staff writer
March 09, 2009 09:59 pm
— TIPTON – The state should either purchase the Getrag transmission facility or assist private investors in obtaining the property, state Sen. Jim Buck advocates.
Buck, R-Kokomo, said the partly finished, $530 million building at the intersection of U.S. 31 and Ind. 28 detracts from the entire region.
Getrag Transmission LLC filed for bankruptcy protection last year after a deal to produce dual-clutch transmissions for Chrysler fell apart. Chrysler and Getrag have filed lawsuits against each other over the failed venture.
During a “Third House” meeting with local residents Saturday, Buck said he suggested to the Indiana Economic Development Corp. and Gov. Mitch Daniels the idea the state should purchase and than market the facility.
Buck suggested the state use some of the federal stimulus money to purchase the property.
Because of the economic downturn and the fiscal problems facing the state of California, Buck said, some companies are looking at Indiana for a possible location.
“That was one of the suggestions I made,” Buck said Monday. “The judge would have to release the plant from the bankruptcy.”
He said there are supposed to be funds for capital projects in the federal stimulus package.
“We have to see how we can use the money and what restrictions there are on how to spend it,” Buck said.
Tipton County Commissioner Jane Harper said it was an interesting concept, but because the Tipton County location is an asset the bankruptcy court will determine who owns the site.
Blair West, spokesperson for the Indiana Economic Development Corp., said the agency was not “tracking” anything on Getrag.
Jane Jankowski, spokesperson for Daniels, said it is not known if that would be a permitted use of federal stimulus dollars.
“We are trying every day to get a better handle on the funds coming to the state and the restrictions on how they can be used,” she said. “There are specific uses for those funds and the distribution is based on existing formulas.”
Another suggestion Buck made is based on a model being used in Georgia to attract investment.
Buck said a holding company could be formed to buy the Getrag building and the state could help with the issuing of bonds.
In Georgia the holding company leases the building to a company and after 20 or 25 years sells it for $1, he said.
“We have to get the facility up and running,” Buck said.
Because the state told Tipton County officials and contractors the Getrag project was a good venture, Buck said, it has a responsibility to help them recover money from the project.
Harper said the state shouldn’t reimburse Tipton County for funds spent on the Getrag project.
“I would disagree with that statement in totality because Tipton County has a signed commitment agreement as the third party with Getrag and Chrysler,” she said.
In a commitment agreement signed in May of 2007, Chrysler promised to reimburse all third-party funding if the development didn’t come to fruition.
“It’s not the state’s obligation,” she said. “It is Chrysler’s obligation.”
Buck said Indiana contractors are owed $140 million on the Getrag project and many are unable to obtain the necessary bonding to bid on new construction work.
Buck believes the state should help those companies secure bonding to obtain necessary work to remain in business.
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