In approving an agreement that would pay the Marysville Exempted Village School District $85,000 over 10 years, board members questioned if it was time to reconsider the economic development plan that provided it.
Board member Jermaine Ferguson said that given the projects they are offering tax breaks to, “I’d like to ask the county and the city to be more strategic in the types of projects they do incentivize.”
As part of Thursday’s meeting, the board discussed a proposed tax abatement for a 55,000-square foot, spec building at 14711 Industrial Parkway.
Ferguson said a tax abatement should be used as “an incentive to attract jobs that we need or we want and we desire in our community and I don’t know that this project meets that from the position I hold.”
“This is not Halloween, Beggars Night,” Ferguson said.
He asked if the city and county’s Economic Development Incentive Plan (EDIP) still meets the needs of the district, “or is there a need to maybe relook at some of these items within the EDIP.”
District Treasurer Todd Johnson said believes “it is definitely time to look at the EDIP.”
“We are obviously a growing community. The things that were in place that impacted us 10 years ago, we might not necessarily need the same type of things now so I definitely think it would be time to look at that,” Johnson said.
Johnson said the city and county last updated the EDIP in 2016.
“Times have changed since then,” Ferguson said.
He explained that in less than a year, the city has created two incentive agreements for spec buildings. The board member said he would like to see tax incentives used for specific companies creating specific jobs, not to developers of empty buildings.
“We have some room to improve and speculative properties should probably not be on the list,” Ferguson said.
Ferguson said taking that approach will require economic development leaders “to determine what is our economic development strategy here in Union County.”
City officials have agreed to a 10-year, 75% tax abatement for the multi-tenant space named the Pioneer Park.
Ferguson said the school board has “no role in accepting or rejecting the abatement.”
As part of the overall agreement, Pioneer Development will pay the schools $8,500 a year for a decade. The payment, also known as a PILOT (Payment In Lieu Of Taxes), will offset some of the property taxes the developer will not be paying.
Johnson said it is important for residents to know that under Ohio law, the city can approve abatements without district agreement as long as they do not exceed 10 years or 75%.
He said that while he city has been in communication with the school district throughout the negotiation, it has not taken the district’s suggestions into account.
Johnson explained that earlier in the negotiations, city officials asked if the district would rather a nine-year, 65% abatement that does not include the $8,500 annual payment or the 10-year, 75% abatement that does include the payment.
“The school basically said we would prefer 65% for nine years with no PILOT (Payment In Lieu Of Taxes) because that would be less impactful on our tax collections, but it was decided to go with 75% for 10 years,” Johnson explained.
He added that, “because it can be done without school board approval, we can give our input but ultimately we don’t have the final say.”
City council is in the process of approving the agreement, which is expected to be passed as an emergency, meaning it will be effective immediately and eliminating the ability for the public or other entities to challenge it.
In the legislation, city officials said an abatement is appropriate because the area has “not enjoyed sufficient reinvestment from remodeling or new construction.”
“I understand the role of council,” Ferguson said. “Their role is to bring in jobs for Marysville and from their perspective, this would be easy to vote ‘yes’ for because it is speculative and there is a chance you bring in 55 jobs.”
Even so, Ferguson said he does not feel a spec building “quite meets the strategic role of incentives.”
The developer will not occupy the building, but is expected to rent space inside it to multiple tenants. Officials expect the complex will have about 55 full-time employees with a combined payroll of about $2.75 million annually, though it is difficult to anticipate what the employment of each suite would look like.
The developer has said it needs the abatement to make the project viable.
“The facility will target warehousing, distribution and R&D type tenants serving the surrounding automotive, advanced manufacturing and agribusiness industries,” according to paperwork submitted to the city by the developer.
Ferguson said he believes that if there is a market need for spec buildings, “then the market should provide that solution.”
The property is currently generating $1,100 per year in tax revenue. Once developed, even with the abatement, the company will pay about $45,000 in property taxes annually — $33,002 to Marysville schools, $217 to Paris Township, $6,197 to Union County and $1,413 to Ohio Hi-Point.
Even with the donations, officials expect the abatement will save the company about $1.2 million in taxes it will not pay.
Board president Sue Devine said she appreciated Ferguson sharing his thoughts.
“Thank you for saying that,” she told him. “I think there is some valid points in that.”