Monaco Coach Corp. might be leaving Indiana’s Elkhart County in September for the foreseeable future, but not without a possible $3.3 million payback from an agreement it made with the state in 1997 for training grants and tax incentives it received for more than 10 years.
As reported by the South Bend Tribune, during a Friday (Aug. 1) meeting, Indiana Secretary of Commerce Nathan Feltman reminded Monaco Coach attorneys of its obligations to the state should it stick to its plans to close plants in Elkhart, Wakarusa and Nappanee.
Those closings, targeted to begin on Sept. 17, would cost the area more than 1,400 jobs.
Feltman, who said he has had previous conversations with the Coburg, Ore.-based company on the matter since the closings were announced July 17, told the Tribune he met Friday with Monaco Coach’s legal counsel on behalf of Gov. Mitch Daniels.
Monaco had entered into a pact with the Department of Commerce under a former administration to take advantage of tax incentives in 1997 that also included some training grants at the Wakarusa and Elkhart locations, Feltman said.
“Those incentives, which the state provided back in 1997, totaled about $2.7 million over 10 years,” Feltman said.
“As a result of their announcement to close the Wakarusa and Elkhart locations,” Feltman said, that decision “triggered part of the agreement where they have to pay back dollars and interest and penalties to the state, for a $3.3 million payback.”
Feltman said the state would prefer getting jobs back over receiving the money, but he added, “The governor takes very seriously” Monaco Coach’s need to “live up to the obligation.”
In fact, he noted, incentives at the Wakarusa facility were to continue to 2015.
Feltman said he could not specify the amount of jobs it would take to negate the financial obligation.
But he did say that if Monaco Coach does not fulfill its obligations, “then our obligation on behalf of the taxpayers of Indiana is to recoup the dollars invested.”
Officials for Monaco Coach could not be reached for comment Friday afternoon.
But Feltman said company officials were well aware of the agreement when he first spoke to them shortly after the July 17 announcement.
The two sides agreed to continue dialogue for the next two weeks on the matter, he said.
Feltman noted that Monaco Coach is still working with partner International Truck and Engine Corp., a subsidiary of Navistar Corp., over the possibility of keeping open the chassis-building operation in Elkhart in a joint venture.