The Lafayette City Council has approved two 10-year tax abatements covering a $890 million expansion of Caterpillar’s Large Engine Center in Lafayette, Indiana, as reported by wlfi.com. One abatement applies to $540 million in real estate investment; a second covers $350 million in personal property investment. The expansion comes on top of a prior project, bringing Caterpillar’s total investment at the Lafayette location to $1.6 billion.
What it means
The abatements reduce the tax burden on Caterpillar’s new construction and equipment over a decade, according to the council’s action. Caterpillar currently employs just under 2,000 people at the Lafayette facility. For industrial manufacturers weighing large-scale equipment investments, the Lafayette approval illustrates how local governments structure multi-part abatements to separately address real property and personal property — a model also seen in recent expansions such as the Hyosung HICO transformer plant expansion in Memphis.
Key facts
- Total expansion value: $890 million
- Real estate investment abatement: $540 million
- Personal property investment abatement: $350 million
- Abatement duration: 10 years each
- Caterpillar’s total local investment: $1.6 billion (according to the company)
- Current Lafayette workforce: just under 2,000 employees
- Facility: Caterpillar Large Engine Center, Lafayette, Indiana
Source: wlfi.com, reporting Lafayette City Council action