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Mahoning County Reviews Tax Abatement Compliance
YOUNGSTOWN, Ohio – The Mahoning County Tax Incentive Review Council recommended continuing tax breaks for all six of the companies receiving abatements under the county's enterprise zone program.
“Half of them exceeded their goals and half are borderline or underperforming,” said Sarah Lown, senior economic development manager for the Western Reserve Port Authority and enterprise zone manager. “But the thing that’s good is the ones that exceeded them are the bigger ones, the bigger job producers.”
The review, conducted Monday, was the first since county commissioners voted Feb. 29 to approve a contract with the Western Reserve Port Authority to provide economic development services, including managing its enterprise zone program.
Outperforming projections by far in terms of job creation was InfoCision Management Corp., Austintown, which received a 60% abatement on property taxes. In the fourth year of the 10-year agreement, InfoCision has invested $4.42 million of the projected $5.25 million- to $6.12 million the company said it would invest -- but has created 411 jobs, more than double the promised 200.
“It seems like you’re always hearing about InfoCision,” remarked Mahoning County Auditor Mike Sciortino.
“They’re amazing. They create a lot of opportunity for their market and they do a good job. They’ve gone far and beyond the job creation that they projected,” affirmed Austintown Township Trustee David Ditzler.
The only bad thing, the Austintown Democrat quipped, is that two-thirds of the company’s work involves raising money for the Republican Party.
Another company exceeding its job creation goal is Youngstown Baseline/FedEx Ground in North Jackson, which in the fourth year of its 10-year, 60% tax abatement has added 24 jobs, compared with the two jobs the company projected. The company has invested $7.83 million in its shipping center, at the higher end of the $6.8 million-$7.9 million range projected.
Another North Jackson company, PMC Facilities Management Inc., has created 19 of the 20 jobs promised as of the eighth year of its 9-year agreement with the country, for which it received a 60% abatement on property taxes. The company’s investment to date is $1.13 million, below the $1.17 projected under the agreement.
PMC Facilities sells “robotics and things” around the world, said Jackson Township Trustee Chuck Booth. “They’re a great company. They’ve been through some tough times.”
McHenry Industries Inc., Austintown, has reached the 15 added jobs projected in its 60% abatement agreement over 10 years, and has invested $2.6 million of the $3.01 million-$4.23 million to date.
“They make signs. They love it when banks acquire other banks,” Ditzler said. “Now they’re making Huntington signs for all over the United States. They do a phenomenal job.”
Other companies that had their abatements continued were Trumbull M.A.R.S., Austintown, and Valley Sports/Simon Roofing, Struthers.
In the sixth year of an 8-year, 55% abatement, Trumbull M.A.R.S. has created three of the five jobs projected and invested $703,072, above the $506,000-$612,500 range projected.
Valley Sports/Simon Roofing has hired 11 of the 25 projected employees as of the fourth year of its 10-year, 60% abatement, and invested $3.68 million, above the $1.73 million-$3.45 million projected.
When making decisions regarding whether to continue abatements, members of the council review the total value of the contract and economic conditions. “We’ve not gotten that far terminating programs,” Ditzler said. Instead, the review council attemptes to contact companies that “in our estimation haven’t been living up to their end of the bargain and get them back on track.”
Companies “always do the dollar numbers in investments but the whole intent is to create jobs and opportunities for our communities,” he added.
Council members usually get the data weeks in advance of the meeting and are able to meet with the companies and get feedback. Lown apologized for not having the data available until Monday’s meeting. The port authority was awarded the economic development contract Feb. 29 and since then had to contact the companies to get their information, a couple of which only submitted it Friday afternoon.
Previously the Youngstown/Warren Regional Chamber administered the enterprise zone program under a contract with the country. The chamber’s vice president, government affairs, Tony Paglia, said the chamber notified the county that its contract was up after it expired at the end of last year and sent a new contract, but received no response. Since it did not hear from the county, the chamber did not act on gathering the information for the enterprise zone program, which is due to be submitted to the state at the end of the March.
“We weren’t in a position to continue until we knew where we stood,” Paglia said. The state was also a month behind in issuing the forms that were required to be submitted, further complicating matters, he noted.
Chamber officials learned that Mahoning County was entering into an agreement with the port authority for economic development when it received a copy of the agenda for the Feb. 29 meeting. Tom Presby, the chamber’s manager, business development, met with Lown to discuss the transition and the information she would need to gather, according to Paglia.
Mahoning County Commissioner Carol Rimedio-Righetti said the delay in assigning the enterprise zone responsibilities to the port authority was due to the debate over funding for the port authority’s contract with the country. Discussions are continuing regarding funding options, including a proposal to raise Mahoning County’s bed tax, which hotel operators oppose.
During Monday’s meeting, the review council members also discussed ways to get companies with tax abatements more engaged in their communities, including possible apprenticeship programs, a point Sciortino noted has been raised at past meetings.
“It’s about jobs and job creation,” he said.
Lown agreed.
“There’s a shortage of young people wanting to go into the trades, into manufacturing,” she said. “They might realize if you get them out to the shop floor it’s really fun. Manufacturing isn’t what it used to be. It’s much more sophisticated. It demands higher skills.”
Copyright 2012 The Business Journal, Youngstown, Ohio.