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.
TIRC to recommend tax agreements remain in place
First Posted on UrbanaCitizen.com: March 13th, 2016
By Joshua Keeran - email@example.com
Under the leadership of the Champaign Economic Partnership (CEP), the combined city of Urbana and Champaign County Tax Incentive Review Council (TIRC) on Thursday voted in favor of recommending the city and county continue all current enterprise zone, Community Reinvestment Area (CRA) and Tax Incentive Fund (TIF) agreements.
In enterprise zones or economically depressed areas where business growth is encouraged through tax relief, the TIRC unanimously voted in favor of continuing agreements with KTH Parts Industries, the American Pan Company and the Ultra-met Company.
Marica Bailey, CEP economic development director, said the deal with KTH, 1111 state Route 235 N. in St. Paris, is a 100 percent tax abatement for 10 years (through Dec. 31, 2016) in which the company agreed to commit over $3 million in real property and retain 92 positions.
“They have a total investment of $23 million at this point,” she said. “Everything so far is above what they have anticipated.”
Champaign County Auditor Karen Bailey reported the amount of taxes forgone to date as a result of the agreement is $1,265,606.
The American Pan Company, 417 E. Water St. in Urbana, is receiving a 75 percent tax abatement for 10 years (through Dec. 1, 2022) in return for the creation of 33 jobs and the retention of 154 jobs.
“American Pan has met their agreement regarding their employees,” Marcia Bailey said.
To date through the agreement, the company has invested $2.2 million, while $103,547 in taxes have been forgone.
Under the enterprise zone agreement with Ultra-met, 120 Fyffe St. in Urbana, the company agreed to invest $510,000 in real property, $1.5 million in personal property, create 22 jobs, and retain 30 jobs in return for a 75 percent abatement for 10 years (through Dec. 31, 2020).
“At this point, they have reported 11 new jobs created, and the investment is on track,” Marcia Bailey said.
To date, the deal has resulted in a tax abatement of $23,140.
TIRC members were also informed that an enterprise zone agreement with Parker Trutec, 4795 Upper Valley Pike, expired at the end of 2015.
Marcia Bailey said during the length of the 10-year agreement, the company received a 45 percent reduction in real property taxes in exchange for creating two positions and retaining 88 employees.
“They are now at the 88 retained and have maintained the two new employees,” she said, noting the company invested $2.1 million during the agreement.
The total amount of taxes abated over the length of the deal was $289,830.
CRA, TIF agreements
TIRC members unanimously agreed that CRA agreements, tax exemption deals benefiting property owners who renovate existing or construct new buildings, should continue with Gerald Shiffer and White’s Service Center.
The deal with Shiffer, which involves a hangar at Grimes Field, is a 50 percent tax abatement for 15 years (through Dec. 31, 2016) in return for a real property investment of $325,000 and the possible retention of two positions.
To date, $75,868 in taxes has been forgone.
“Everything is on track as specified with the agreement,” Marcia Bailey said.
The CRA agreement with White’s Service Center, 1325 N. Main St. in Urbana, is a 50 percent tax abatement for 10 years (through Dec. 31, 2019). During the length of the agreement, the company has pledged to invest $250,000 in real property and $2,500 in personal property, create one new position, and retain one position.
“They did hire a new person and have retained the other,” Marcia Bailey said. “They haven’t requested any taxes be abated as of yet, but the agreement will remain in case they decide to do so at a later date.”
TIRC members also unanimously voted in favor of continuing the 10-year TIF agreement set up by the city of Urbana to help fund the Scioto Street Improvements Project through 2021.
To date, the six businesses involved in the agreement have paid the following amounts into the fund: Aaron Rents ($35,375), Clark Station ($14,549), Midwest Dialysis Center ($32,756), McDonald’s ($38,410), Sonic ($18,516) and Family Dentistry ($28,611).
Marcia Bailey said the TIRC’s recommendations will be presented to both the Urbana City Council and Champaign County Commission on Thursday for final approval. Council will vote on city agreements only, while the commissioners will vote on county and township agreements.
Joshua Keeran may be reached at 937-652-1331 (ext. 1774) or on Twitter @UDCKeeran.
Building on the groundwork for a coordinated economic development program in Champaign County, the boards of three local organizations met recently in a joint training session led by economic development expert Chris Schmenk, former director of the Ohio Development Services Agency.
In the training, Schmenk, who now serves as counsel for Bricker & Eckler LLC, reviewed the economic development roles of each participating organization: the Champaign Economic Partnership, the Champaign County Chamber of Commerce and the West Central Ohio Port Authority (WESTCO).
She highlighted how the organizations can work together to attract new business to the community and promote retention and growth of existing businesses.
“Each of our organizations has a distinctive role in building our local economy and creating jobs,” said Marcia Bailey, economic development director of the Champaign Economic Partnership. “By working together, we want to make the most of each of our strengths and maximize our effectiveness in helping existing businesses succeed and in recruiting new business to Champaign County.”
The partnering organizations
The Champaign Economic Partnership (CEP) was established in July 2015 as Champaign County’s designated economic development agency, through an agreement between Champaign County commissioners and the city of Urbana. The CEP, a nonprofit organization, is a public-private partnership of the Champaign County Community Improvement Corporation (CIC), local government subdivisions – county, City of Urbana, villages and township – and private businesses. The CEP’s 18-member board consists of about 40 percent local government representatives and about 60 percent business representatives.
The Champaign County Chamber of Commerce serves as “the front door of the county” and “the ultimate business concierge,” Schmenk said. She said the Chamber advances the business and community interests of Champaign County, promotes the amenities of the county, and plays an important role in connecting businesses and individuals and helping retain and grow current businesses.
WESTCO, created by the county commissioners of Champaign, Clark and Fayette counties and governed by state law, supports industry and agri-business in the region by preserving railroad assets and providing for the continued operation of rail freight services.
Planning economic development strategy
While covering the responsibilities of each of the local organizations and their board members, Schmenk also provided a refresher on how Champaign County can collaborate with Ohio’s economic development system – JobsOhio and the Ohio Development Services Agency – and the Dayton Development Coalition, which includes Champaign County.
Schmenk recommended that the local groups develop a project team and define the roles each group will play in economic development projects. She said in planning their strategy they need to keep in mind the factors that matter most to corporations and site selection companies that help businesses find locations.
She emphasized that tax incentives can play a role in a company’s decision to locate, but are not the leading factor. She said factors that play a larger role include, among others, availability of a skilled workforce, state and local tax structure, transportation and utility infrastructure, availability and price of land and buildings and ease of obtaining permits.