By Joshua Keeran - Urbana Daily Citizen
The local Tax Incentive Review Council (TIRC) voted Thursday to recommend local governments continue with all current enterprise zone, Community Reinvestment Area (CRA) and Tax Incentive Fund (TIF) agreements.
In economically depressed areas of the city and county where business growth is encouraged, TIRC members unanimously recommended local government leaders continue their enterprise zone agreements with KTH Parts Industries, the American Pan Company and the Ultra-met Company.
Marcia Bailey, economic development director for the Champaign Economic Partnership, presided over the meeting and said the deal with KTH, 1111 N. state Route 235 in St. Paris, is a 100 percent tax abatement for 10 years that expired Dec. 31, 2016, but will continue through through the current tax collection period. The company agreed to commit at least $3.07 million in real property over the 10-year period and retain 92 jobs.
To date, Bailey said, KTH has invested $4.2 million in real property and kept the promised 92 positions.
As for taxes abated thus far as a result of the agreement, Champaign County Auditor Karen Bailey reported the total stands at $1,299,616.
Located at 417 E. Water St. in Urbana, the American Pan Company agreed to a 10-year, 75 percent tax abatement (through Dec. 1, 2022) in return for the creation of 33 jobs, retention of 154 positions, and a real property investment of $1.9 million.
Marcia Bailey said the company has created 55 jobs, retained 154 and invested $1.9 million. To date, $158,729 in taxes have been abated.
Ultra-met’s enterprise zone agreement involves the company, located at 120 Fyffe St. in Urbana, receiving a 75 percent abatement for 10 years in return for investments of $510,000 in real property and $1.5 million in personal property, as well as the creation of 10 jobs and retention of 30 positions.
The company has met the requirements, having invested the pledged amounts, created 11 new jobs, and retained 30 positions.
The amount of taxes abated to date under the agreement total $27,283.
Community Reinvestment Area contracts
The three active CRA agreements – tax exemption deals benefiting property owners who renovate existing or construct new buildings – currently on the books within the county received positive feedback from TIRC members, who unanimously voted to recommend the contracts remain in place.
The longest running of the three CRA agreements involves the 10-unit T-hangar at Grimes Field in Urbana. Since 2002, $78,749 in taxes have been abated in a deal in which Gerald Shiffer, the original applicant, received a 50 percent tax abatement for 15 years on the hangar in return for an investment of $325,000 in real property, the creation of one job, and the retention of another job.
Marcia Bailey said at the present date, $330,000 has been invested, one job was created, and one position retained.
A CRA agreement granting White’s Service Center, 1325 N. Main St., Urbana, a 50 percent abatement for 10 years has been on the books since 2010, but the business has yet to request the tax abatement be activated, Bailey said.
If the business were to ask for the abatement to take effect, it would need to meet its obligations. These include a $250,000 investment in real property, the creation of one job, and the retention of one job.
The most recent CRA agreement to have gone into effect involves three buildings at KTH. In return for a 100 percent tax abatement for 15 years, the St.Paris-based company has committed to retain 815 employees, create 20 new jobs, and invest $6.7 million.
To date, Marcia Bailey said, the company has retained 815 jobs, created 20, and invested $6.79 million.
The amount of taxes abated since the tax exemption took effect in 2015 stands at $44,682.
During the meeting, a KTH representative reported the company, as of the end of February, employs 1,139 individuals.
Tax Incentive Fund
TIRC members unanimously agreed that a 10-year TIF agreement used by the city of Urbana to help pay for improvements on Scioto Street through 2021 should continue.
The six properties involved in the agreement have paid the following amounts into the fund since 2012 (listed by name of the business or businesses currently operating on the property): Aaron Rents ($44,199), Clark Station ($17,607), DaVita Midwest Urbana Dialysis/Mercy Memorial Wound Care Center ($44,480), McDonald’s ($48,393), Ohio Auto Loan Services ($22,814) and Family Dentistry/Wright-Patt Credit Union/Mary Rutan Hospital ($35,835).
The Champaign Economic Partnership (CEP) recently provided local government officials a free workshop, Tools for Successful Economic Development, about the variety of tax incentives available in Ohio to promote business development.
Chris Schmenk, of counsel for Bricker and Eckler, LLP, and former director of the Ohio Development Services Agency, led the training at the Urbana office of Pioneer Electric Cooperative. City, village, township, county and school district officials attended.
The economic development tools covered provide temporary tax exemptions in return for investing in business creation or expansion and retaining or creating jobs.
CEP Director Marcia Bailey explained, “Tax incentives vary, but they typically exempt a portion of taxes on business improvements for a specific time, after which the business pays the full amount of the tax to support local government services and infrastructure. Tax incentives are designed to encourage business and job growth, which benefits Champaign County and local citizens.”
Schmenk covered the following economic development tools:
–Enterprise Zones (EZ), areas designated by municipalities and counties, in which businesses can be offered exemptions on real and personal property taxes for establishing, expanding, renovating or occupying a facility and creating or retaining jobs.
–Community Reinvestment Areas (CRA), also established by municipalities and counties, in which real estate tax abatements may be offered for revitalizing existing business or residential properties or developing new structures.
–Tax Increment Financing (TIF) Districts, which can be established by municipalities, counties and townships. Property owners may make payments in lieu of taxes (PILOTs) that go into a TIF fund that finances public and infrastructure improvements.
–Joint Economic Development Districts (JEDD), special purpose districts created through a contract between a municipality and township to promote economic development and employment opportunities. JEDDs enable a district-wide income tax and provision of municipal services to unincorporated areas without annexation.
–Downtown Redevelopment Districts, a new economic development tool for municipalities to promote redevelopment of designated areas that must include at least one historic building. These may include property tax exemptions related to redevelopment.
Mechanicsburg properties headed to sheriff’s sale