The city of Elkhart, Ind., is confident that startup RV manufacturer Nexus RVs LLC will chose to locate its manufacturing facility in the northern Indiana community following unanimous preliminary approval Monday night (Oct. 4) of a package of tax incentives by the city council.
”I don’t mean to be flippant, but for a project like this, we fully anticipate that we are going to prevail over other states because the long-term cost of doing business in Indiana is going to be substantially less,” Barkley Garrett, Elkhart economic development director, told RVBusiness.com.
The company is looking at an empty 109,000-square-foot facility in an industrial complex on Reedy Drive and C.R. 13 on the north side of Elkhart. Nexus intends to begin hiring key personnel this month to build a ”B-plus-style” Class C motorhomes by late winter.
Following the city of Elkhart’s action, Garrett said that it’s likely that the state of Indiana will provide other incentives for Nexus to locate in Indiana. ”The state typically comes through with training dollars and tax credits,” Garrett said. ”I would be surprised if this wasn’t similar to previous projects.”
Nexus President Claude Donati said last week that the company also was seeking an incentive package from Michigan for a factory near the Indiana border and would decide on a location when proposals were approved by both states.
The incentive package approved by the Elkhart City Council will save the company about $38,600 over the next five years on the installation of $1 million in equipment.
Final approval is expected by the council during its next meeting Oct. 18.
Donati was not available for comment today.
In a market that’s been somewhat limited for U.S. motorhome builders, startup minimotorhome manufacturer Nexus RVs LLC will begin hiring key personnel within the next few weeks and plans to produce a prototype unit to display at the Florida RV SuperShow in mid-January.
”That way, we can get into the biggest show of the year and set the tone,” said Nexus President Claude Donati, who resigned in mid-June as vice president of motorized for Gulf Stream Coach Inc. to form his own company.
Donati, who has temporarily located Nexus’ corporate headquarters in the University of Notre Dame’s Innovation Park, said the Elkhart City Council on Monday will consider tax abatement on a 109,000-square-foot production facility in an industrial park at Indiana 19 and the Indiana Toll Road on the north side of Elkhart.
”That doesn’t mean that we’ve selected that property,” Donati said, adding that the Nexus also is considering space in the Edwardsburg, Mich., area, about two miles north of the Indiana state line.
”Our hope is to be in Elkhart, but we also are looking in the southern Michigan — in the area where Georgie Boy was — which has a solid workforce,” he reported. ”And we want to stay close enough to the vendors.”
The decision on where to put Nexus’ plant will be determined by which location makes the best sense financially, Donati said.
In a filing with the Elkhart City Council, Mayor Dick Moore recommends that Nexus receive abatement for five years on $1 million in equipment, saving the company about $38,600. The mayor said the average pay for Nexus’ workers will be about $22 an hour.
Nexus’ application for abatement filed Sept. 21 says the company anticipates annual sales of $20 million, and that a second phase will include building a destination RV campground.
Initially, Nexus will assemble standard and ”B-plus-style” Class C motorhomes on Ford chassis.
”We think we really understand that market, and the tooling costs are a little less expensive than if we were manufacturing a full-blown Class A,” Donati said. ”It’s a little more complicated to get into that segment.”
Donati said that by the end of October Nexus will hire a plant manager, engineer, purchasing agent and controller. ”Shortly after that, we will bring in key leaders on the production line,” he said.
The company expects to hire 50 people in its first year and be in production by late winter.
”We have some product design stuff that will be different than what is out there now,” Donati said. ”We are going to make sure that every inch of the floorplan is used properly.”
Donati anticipates Nexus pursuing steady, controlled growth. ”We won’t be a high-volume producer right away,” he said.