Danville Meggitt expansion will be bigger than expected

Published 9:39 am Wednesday, January 10, 2018

Aircraft brakes company anticipates additional 28 jobs, $5.5M investment

A major expansion at Meggitt Aircraft Braking Systems in Danville is expected to be bigger than originally planned, bringing up to 28 jobs to the plant, on top of 68 previously announced jobs.

Meggitt first qualified for state economic incentives for the expansion in 2015. In October 2017, Gov. Matt Bevin attended a dedication for the $9.3 million expansion.

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Now, that expansion is growing from about a $9.3 million investment to almost $14.9 million, according to Jody Lassiter with the Danville-Boyle County Economic Development Partnership.

Meggitt expects to add up to 28 more jobs, meaning the total job growth at the factory could be as many as 94, Lassiter said.

With the expanded expansion has come expanded tax incentives from the state and the City of Danville.

Danville City Commission approved first reading Monday of an ordinance giving Meggitt up to $368,723.30 in credits on payroll taxes paid by its new employees.

Previously, the city had approved giving Meggitt up to $250,000, according to the ordinance.

Meggitt recoups the money from Danville through a partial credit against its employees’ payroll taxes: Workers in Danville pay the city 1.9 percent out of every paycheck; Danville is giving close to a third of those payroll taxes on the new jobs back to Meggitt over the course of 15 years.

Meggitt only gets the local tax incentive money if it “continuously” employs at least 73 new full-time positions out of the announced 94. If the new jobs don’t stick around, Meggitt would have to repay a percentage the tax incentives it received, based on how many years down the road it is, according to the proposed ordinance.

For example, if Meggitt doesn’t still have at least 73 of the new positions around five years from now, it has to repay Danville 72 percent of the incentives; if the company falls below the 73-job mark in year 14, it has to repay 9 percent.

When Meggitt was first approved for financial incentives for the expansion, it was employing 154 people at its Danville location, according to financial incentive records from the Kentucky Economic Development Finance Authority. As of this year, Meggitt is employing 205 employees, according to KEDFA — a growth of 51 jobs. The original economic incentives — before the additional growth was announced — required at least 45 new jobs be created out of a maximum of 66, according to Danville’s proposed ordinance.

The ordinance states that Danville would verify job-creation performance annually for the entire 15-year period.

“A presentation of job creation performance by the Danville-Boyle County Economic Development Partnership … shall be used to verify the job creation performance,” the proposed ordinance reads.

The Boyle County Fiscal Court is also expected to approve updated economic incentives for the new growth at its Jan. 23 meeting, Lassiter said Tuesday.

At Monday’s Danville City Commission meeting, Lassiter said the local incentives are being increased because KEDFA approved increasing incentives at the state level.

“We’re basically doing our component at the local level,” Lassiter said.

Lassiter said “it’s always good when projected expansions turn out to be larger than originally anticipated.”

The payroll for the new employees at Meggitt totals around $2.1 million right now; it will grow to around $4.2 million by year 15, Lassiter said. In all, Meggitt expects to pay its new workers $51.2 million over the 15-year period, he added.

“I think all too often we … seem to focus more on incentives than the investment,” Lassiter said.

“This is the kind of info we like,” Mayor Mike Perros said before city commissioners swiftly approved the updated incentives. “… Meggitt is one of the jewels in our crown.”

The original expansion project “relocated and integrated” Meggitt’s “wheel-and-brake maintenance and repair operations facility from Akron, Ohio, to Danville,” according to an October news release. “The expansion will help (Meggitt) meet current and future demand from new clients, including providing components for the Canadian Bombardier C-Seires aircraft and Gulfstream 650 business jet.”

A Meggitt representative was not immediately available to comment on what the company will be doing with the further addition of jobs and investment.

Lassiter said on Tuesday he didn’t have updated figures on how much the state incentive package is now.