A tax break for a proposed high-tech distribution facility in Greenwood received its first approval from the city council.
Newgistics plans to open a distribution center in a 447,000-square-foot building on the east side of Greenwood. The company would be the first business in a new 350-acre business park at the intersection of Allen and Graham roads.
Scannell Properties, which will construct and own the building, and Newgistics, the tenant, are requesting a 10-year, $3.3 million tax break on both the $20 million building and $16 million of equipment.
The Greenwood City Council voted 7-2 to give its first approval for the tax incentive.
Council members Brent Corey and Bruce Armstrong voted against the tax break, saying the proposed salaries were too low to deserve a tax break and that the city should focus on higher quality industries at the business park.
Because of the automation and technology involved, Newgistics will pay higher wages than standard distribution facilities and employees at the facility will gain valuable skills in automation, said Katie Culp, the president of KSM Location Advisors.
Newgistics will employ 224 people in Greenwood with an average pay of $17.35 an hour, not including the cost of benefits, with 87 of the jobs being moved from another location in Indiana. About 16 percent of the jobs will be in management, with an average salary of $60,000, according to the request.
While the salaries proposed are higher than past distribution facilities, Corey said Greenwood can attract higher-paying jobs in professional fields. He cited Dermatology Inc., a clinical dermatology practice approved for a tax break that will pay an average salary of $65,000 a year as an example of what he wants to come to Greenwood.
Armstrong said companies should pay about $25 an hour for him to consider supporting a tax break.
Newgistics provides digital commerce, fulfillment, shipping and return services for online purchases from national department stores and online retailers. Construction on the Newgistics’ Midwest hub should begin this fall and be complete in June.