VALPARAISO | The city and Aldi are finalizing an agreement that will allow the city to annex the company's warehouse property without protest from Aldi.
A vote on the annexation by the council is expected at the Oct. 28 meeting, but it would not take effect until January 2015. To obtain city water and sewer services for the 96-acre site at the northwest corner of Ind. 49 and Division Road about 10 years ago, Aldi agreed to be annexed when the city was ready.
City Administrator Bill Oeding said the city has talked about annexing the property several times but never "pulled the trigger" until a few months ago. He said the company was hesitant because it would mean about a $145,000 increase in its annual property taxes.
At first, Aldi proposed a phased annexation, which the city rejected. When it came back with the proposal for a one-year delay, the city agreed rather than face a possible prolonged and expensive court battle.
City Attorney Patrick Lyp said, "Each party had its interpretation of the law and what was appropriate. It was one of those things where you do the analysis and come up with what appears fair. This is a fair resolution, and we are not wasting time and effort on what could be a protracted legal battle."
Oeding said, "The day we filed the annexation, we called them and said we were doing it. We didn't hear anything for a while. Then we told them the day it went to the council, and, as they saw we were going to continue, they contacted Patrick."
Lyp called the discussions with Aldi a collaborative effort to avoid what appeared would be a challenge of the annexation. The fiscal analysis of the annexation by city Planning Director Tyler Kent showed the city would receive annual revenues totaling $147,191 while the cost of providing services would be less than $7,300.
Aldi spokesman Michael Schacht said the two sides are still finalizing the agreement and declined further comment.
Delaying the effective date of the annexation to 2015 means the city will not receive any property taxes from it until 2016.
"We thought it was a fair deal, and they are happy," Oeding said. "There were no legal issues. It was just a matter of them agreeing."