Boosting Business with Tax Incentives
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.