Two Westfield companies “cause for concern” regarding tax abatement performance

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Representatives from two Westfield companies told the Westfield City Council why their performance rates were less than expected during a May 9 council meeting.

Economic Development Director Kai Chuck presented a resolution outlining tax abatement compliance for companies with an outstanding tax abatement with the city a standard annual procedure. Chuck said after reviewing the companies’ statements of investment, Biodynamics of Indiana and Grinds were causes for concern. After presentations from both companies, the council unanimously approved the resolution.

Biodynamics of Indiana and Grinds both received five-year personal property tax abatements in 2019 from the City of Westfield. The abatements are contingent on the companies reaching specific goals, such as employee count and anticipated salaries. Biodynamics of Indiana, a hemp-processing facility at 17219 Foundation Pkwy., had a goal of hiring 25 employees but only has three. Grinds, a chewing tobacco alternative company at 17065 Oak Ridge Rd., had a goal of hiring 56 employees but only has 16.

Biodynamics of Indiana Vice President Jeff Chinn said attributed much of the company’s slower-than-expected growth to the COVID-19 pandemic, when the FDA shifted its focus to COVID-19 vaccine production. Chinn said the company manufactures CBD for food and beverage manufacturers.

“Prior to COVID, the FDA was poised to approve CBD as a nutritional supplement and food and beverage additive,” Chinn said. “COVID disrupted all that. The resources applied to the FDA to watch over our industry were reapportioned to vaccine manufacturing. We lost our advocate, we lost our attention in the FDA, and the results of that is food and beverage manufacturers then stalled their products because if (CBD) was not approved, they can’t incorporate it.”

Chinn said the FDA is now moving toward approving CBD as a supplement, and that if or when that happens, Biodynamics of Indiana will be able to “launch significantly.” He said he expects approval within the next 12 months.

Although several Westfield City Council members said they understood the situation, Council President Mike Johns said he hoped the company wouldn’t be before the council next year with the same growth results.

“I understand where you’re at, but we have a city to run, too, and we made certain decisions based upon your ability to achieve your goals,” Johns said. “We certainly value you as a member of our community, but we have to ask you to work a little bit harder.”

Grinds co-founder Pat Pezet told the council that the pandemic also had a negatively impacted its growth. Grinds manufactures coffee pouches that resemble chewing tobacco but are a healthier alternative to tobacco. The business moved to Westfield from San Francisco in 2019.

Although the pandemic led to an e-commerce sales increase of 30 percent, Pezet said the company’s retail growth “came to a screeching halt.” He said Grinds didn’t feel the full effect of the pandemic until the end of 2020, when the company received a significant return of products from a large retailer.

“With all that doom and gloom out in the open, there is some good news,” Pezet said. “This past month, we produced our one-millionth can out of our facility. We are proud of that milestone because this time last year, we made a total of maybe 100,000 cans. The growth has come.”

Both businesses representatives told the council they are expecting to re-enter their “growth mode” and begin adding employees soon.

For more, visit westfield.in.gov.


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