011011 Council approves continuance of property tax incentives
By Sharon Haught
January 2, 2011
230
As Wooster City Council wrapped up business for 2010 council approved the recommendations of the non-partisan group tasked with reviewing the Community Reinvestment Act (CRA) and Enterprise Zone (EZ) property tax incentives granted to 19 companies who have made significant financial investments in the community.
Each year the Wooster Tax Incentive Review Council (TIRC) reviews the status of agreement in place with these companies that requires them to create or retain a given number of jobs in return for a property tax break on the amount the companies invested in upgrading their facilities.
According to Councilman Jon Ansel while its an easy decision for the TIRC to approve the continuance of an agreement when all the companys targeted projections are achieved its far more difficult when issues of underperformance arise.
One of the companies which has not reached their targets is Eldorado Stone, which according to Ansel made a $4.5 million investment in a building expansion only to watch the residential real estate market that it serves steeply decline.
Ansel noted that although Eldorado Stone has been unable to meet its job creation and retention commitments the TIRC recommended continuing the agreement in order to allow the company, property owner and local economic development officials the ability to continue to market the property with the abatement intact to make it more attractive to a new owner.
Both councilmen Job Ulbright and Mark Cavin expressed concern that all the EZ and CRA agreements including the 95 percent of the companies which were either in compliance or close to achieving compliance were presented to council for consideration in one package. Both also noted that this will be the second year in a row that Eldorado Stone has not achieved compliance.
Im concerned about the message that were sending to other businesses who may apply for an EZ in the future, said Ulbright adding do we send the wrong message if we approve Eldorado Stone along with the rest?
Councilman Mike Buytendyk said that if there were a message to potential new businesses that could be derived from approving the TIRCs recommendation it was that city is willing to help in good times and in bad times.
TIRC member Mayor Bob Breneman noted that during their deliberations the question they asked themselves about Eldorado Stone was how have we been harmed?
The answer was we havent, said Breneman noting that the only thing the city lost was potential income tax revenue from jobs that were projected to be created and the schools, which are the largest recipient of property taxes, have actually seen their property tax revenue increase by $36,000 since construction was completed.
Ansel noted that the availability of the building means that the city has a tremendous facility in our portfolio.
If that builder hadnt made that speculative investment and if the market hadnt changed and Eldorado Stone wasnt utilizing that facility we wouldnt have any in our inventory which is a concern for the Wayne Economic Development Council according to Ansel.
Ansel noted that given the economic crisis, having 95 percent of the participants in the programs exceeding or coming close to their projections and millions of dollars being invested into the community is nothing short of incredible.
Thats a remarkably successful track record to have 95 percent success, five percent questionable, said Ansel.
Cavin, who cast the lone dissenting vote due to the inclusion of Eldorado Stone clarified that his vote didnt reflect my feelings on the other 95 percent of the companies that are trying really hard to make a go of it in this economy.
