Published: November 17, 2008 11:24 pm            

GETRAG: Tipton officials looking at options

County bonds, business plans left up in the air

Six months ago Jag Bohra was well on his way to building a new hotel with 65 rooms and a swimming pool. Now his nearly $4 million project has been put on hold.

Bohra and his partners planned to build the hotel in Tipton County near the intersection of U.S. 31 and Ind. 28 to accommodate the growing number of businesses and people they foresaw coming to the area.

That future seems bleak now as the major attraction for the growth, Getrag Transmission Manufacturing LLC, filed for Chapter 11 bankruptcy, leaving business owners, elected officials and residents in the dark.

“It’s not a good situation to be in,” Bohra said.

Getrag was building a $530 million facility near that same intersection which was set to open in September 2009 and employ 1,200 workers. On Monday the company announced it would cease all operations at the Tipton site, following a series of difficulties the company faces due to its split with Chrysler LLC earlier this year.

The change in events has left Tipton officials guessing at what will happen next. The current concern for Tipton officials is how the county will repay the $3.1 million in bonds purchased from Harris Bank. The bonds were purchased to pay for utilities upgrades near the Getrag site.

The county was supposed to use property taxes captured from the site to pay off the debt, said Tipton County Auditor Suzanne Alexander. She is unsure if that will be the case, not knowing whether Chapter 11 bankruptcy excuses the corporation from paying taxes, or when taxes will be paid while everything is tied up in court proceedings. She said there is an additional $1.135 million in bonds payable out of EDIT funding.

The first bill is $58,031.25, due in 2009, Alexander said. She said she is looking for ways to pay the bonds in the event Getrag should fail.

“There are options. We have rainy day money. We don’t have a lot of extra money sitting around so it could be a huge burden. We may have to go back and re-look at the budget,” she said.

Alexander, however, shares the optimism of other Tipton leaders, like Commissioner Monty Henderson.

“The county’s not going to sink with the ship,” he said.

While Henderson said he’s disappointed by the turn of events, he said the county did well to cover its interests. The majority of the bonds, $11 million, will fall to Getrag and Chrysler. Henderson said the majority of the funding the county put up was for infrastructure he believes will entice further businesses.

“It’s not a road to nowhere. It’s not facilities to nowhere,” he said.

Henderson said Getrag had to file for bankruptcy to protect itself from lawsuits. He said the company may still find a partner to purchase its dual-clutch transmissions, or another company will want to purchase the facility.

Tipton Mayor Dan Delph said the city won’t be adversely impacted by Getrag filing for bankruptcy. Delph said he felt assured after speaking with some Getrag officials.

“They intend to pay all the bills. We’re glad for that. We don’t like to see anybody go unpaid,” he said.

Incoming commissioner Jane Harper is cautiously optimistic about Getrag’s future in Tipton. She said she received a press release from Jim Shoup, CEO of Getrag Transmission Manufacturing, asking Tipton County “for their patience and understanding as we manage through this process.”

“I believe Tipton County has exercised extreme patience for two years in this project,” Harper said. “It is now time for the Getrag officials to sit down with the Tipton officials and leaders and give us full disclosure on the status and the future of the site at 28 and 31.”

Harper said she believes Getrag plans to be helpful during this time.

“At this time I have no reason to believe that the Getrag officials will be anything other than wanting to ‘make it right’ with our community,” she said.

However, she reiterated a need for more communication.

“I believe that we have been kept in the dark in this entire process and that now is the time we need to be enlightened.”

        

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