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Abatements a good tool for all involved

By 2009, two new hotels may be open near the corner of Tapawingo Drive and State Street in West Lafayette.

Spring Hill Suites will target business travelers and have 151 rooms. Fairfield Inn & Suites will target families. It is expected to have 110 rooms. The developer, Tapawingo Drive Partners LLC, is part of the same group that owns Wabash Landing.

But anyone who builds in that area will probably need to improve the soil. Otherwise, it won't provide a firm foundation -- especially for a $31 million dual hotel project.

The hotel developer wants a 10-year tax abatement to help pay for the job. The city of West Lafayette should give it.

Across the river, Subaru of Indiana Automotive Inc. is seeking two tax abatements from Lafayette. Why? SIA is installing new equipment and a new warehouse at the Lafayette plant.

Total price tag of the new investments: more than $100 million.

Owners of businesses are eligible for tax abatements from local governments when they make certain improvements. Local governments use tax abatements to encourage investment and attract new businesses.

With abatements, the taxes are phased in over time.

These taxes are based on assessed values that have usually increased because of the improvements.

West Lafayette ran into problems with soil during construction of Tapawingo South. Officials ended up spending more on the project to make the ground more stable. It's not surprising that the same issue has been identified in an adjacent building project.

There's no reason not to give the developer the requested abatement.

In time, the city will receive the entire benefit of the taxes. The same is true of the improvements at SIA.

When West Lafayette hotels are built, it's possible the developer will use local construction companies or subcontractors to do work, putting money in the pockets of residents -- and ultimately the local economy.

When the hotels are complete, visitors who stay there will spend money on food and entertainment. Many purchases will be taxed. And visitors will contribute to the hotel tax every time they stay here.

The hotels will provide jobs for about 55 people, the developer said.

At SIA, officials have said the abatements will help the company retain all of its 2,800 employees.

Greater Lafayette needs to continue to work hard to attract vibrant businesses.

Once that's accomplished, the cities help those businesses invest and expand.

Tax abatements, issued prudently, are a reasonable means of achieving the community's economic development goals.

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