Economic Growth Gets Back on Track in Salem
SALEM, Ohio -- More than 25 years after it was constructed, the Salem Industrial Park is nearly filled, packed with small companies carving their own niches in local and international markets.
Meanwhile, activity on the east and north sides of this city points to future growth in commercial development, helped along by new infrastructure and a menu of incentives programs intended to boost business attraction, officials say.
“A lot more is coming,” says Mayor John Berlin, referring to work ongoing on the east side of town where a new Holiday Inn Express is under construction.
“We’re looking for ancillary businesses such as restaurants to follow,” he says, once the hotel opens.
Projects such as Holiday Inn Express were made possible because of new infrastructure – new roadways, especially – extended to this section of Salem through tax increment financing, or TIF.
The premise is to use a portion of the taxes generated from the development to pay for the infrastructure that surround the project. A similar development tactic was used on the north side of the city, where a new Chrysler dealership was built, he says.
Berlin explains his city can help projects such as these come to fruition through other incentive programs that have helped draw development to Salem.
For example, the city offers an income tax incentive program that enables a company creating 10 or more jobs a rebate of up to half of the 1% city income tax the company pays during the year, notes Fred Pamer, city income tax administrator.
“If a business, existing or new, generates 10 or more jobs, we’ll give them an incentive payment of half of the income tax they pay to the city,” Pamer says. The money is returned to the company so it can reinvest those dollars in the business.
So far, just business within the city is benefiting, according to the tax administrator. “It isn’t a large expense [to Salem],” Pamer says, “but rather a payment to demonstrate that we’re interested.”
Other incentives the city has used for business development include a 100% tax abatement on new construction for either an incoming business or an existing company to expand, says Patrick Morrissey, planning and zoning officer.
“If you build a new structure or add on, you can abate those taxes for 15 years,” based on the value of new construction, he explains.
The incentives cover approximately three-quarters of the city, Morrissey says, concentrating mostly on the south and west sides of Salem. “It isn’t eligible everywhere in the city, but it does include the industrial park. I think it’s been a very successful program,” he remarks.
Mayor Berlin says that the Salem Industrial Park is “pretty well filled up,” with possibly a vacant lot or two.
All sites are in private hands and the city now has little to do with transactions at the development. Thirty-three companies operate out of the park.
Among the most recent tenants is Quality Water Systems LLC, an existing company that bought a building that stood vacant for years. Other companies have found that the park suits their needs perfectly.
“We’ve been here for 12 years,” says Don Senne, president of Brass Accents Inc. The company finishes custom decorative metal fixtures – mostly brass – for doors and cabinets. Brass Accents fills orders for companies that sell hard-to-find antique hardware over the Internet.
“These are items you can’t put in a store,” Senne says, because the products are mostly replicas of antique brass kick plates, doorknobs and other fixtures manufactured in India.
Brass Accents then performs a value-added service by applying a customer-specified finishing to the products.
“We have more sizes, more finishes and more mounting systems of kick plates than anybody else in the world,” Senne states. “So, we sell more kick plates through Internet dealers than anyone else in the world because of that.”
The company can treat brass in 14 finishes and specializes in selling kick plates that come in irregular sizes.
“We ship everywhere,” he says. “Every day I ship dozens of kick plates in dozens of odd shapes and finishes because nobody else has those items.”
Brass Accent’s products usually end up as replacement parts rather than in new construction projects, Senne says. “This stuff isn’t what you put in track homes or new construction,” he explains. “We also do a fair amount of light commercial projects such as churches and banquet halls.”
Almost none of the company’s business is nearby, Senne says, noting most of the orders come from the West and East coasts.
“Ohio isn’t even among the Top 10 states we sell to,” he says. “If you have high-speed Internet, you can locate anywhere.
Senne says his shop at the Salem Industrial Park is perfectly suited for his business and reports company sales have risen every year.
“It’s never going to be a giant business,” he relates. “It’s a good environment to work in.”
Pictured: Don Senne, president of Brass Accents Inc., says his company has operated from Salem Industrial Park for 12 years.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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