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Financial woes didn't stop abatement



Published: Fri, August 16, 2002 @ 12:00 a.m.



General Motors worked out a deal with the Lordstown Board of Education separate from the tax abatement granted by the county and the village.

By SHERRI L. SHAULIS

VINDICATOR TRUMBULL STAFF

LORDSTOWN -- It wasn't difficult to decide to allow a tax abatement for General Motors' proposed $550 million expansion in Lordstown, but it was tough explaining the rationale behind it.

Raymond E. Getz, superintendent of Lordstown schools, said some people looked at the situation as a case where the school district, which is in fiscal emergency, was giving away money.

"You have to understand the implications and the rationale behind that leadership decision," Getz said.

Tax abatements mean businesses performing renovations or getting new equipment do not have to pay taxes on the property or equipment for a specified amount of time. In the case of GM Lordstown, county and village officials agreed to grant a 10-year, 100-percent abatement if the local plant was awarded GM's new small-car line.

An official announcement was made Thursday that the local plant would get the project, meaning a new building would be constructed, renovations of the current structure would take place and new equipment will be purchased.

Oversight panel concurred

Under Ohio law, any tax abatement over 75 percent must be agreed to by the local board of education. In this case, not only did the Lordstown board have to agree to the abatement, but so did the state oversight commission that regulates the school's finances during the fiscal emergency.

"That is an even more powerful board than the board of education," Getz said. "But they looked at it and agreed that it was a good decision, and signed off on it."

Part of the decision for GM to award the new small-car line to the local plant was based on the abatement agreement. Lordstown Mayor Arno A. Hill said it took months of negotiations until all parties were able to come to a mutual agreement.

"This is an agreement that is pro-schools," Hill said, pointing out that while the 100 percent abatement was granted by the county and village, a separate deal was reached between GM and the Lordstown school district. Under that agreement, GM will pay the school taxes on personal and real property based on 25 percent of its value.

Had the local plant not received the new car line, though, chances are GM would have shut it down, meaning the village, county and school district would have lost all taxes paid on the 924 acres and 2.65 million square feet of building space.

Mark Zigmont, of the Trumbull County Planning Commission office, said the abatement would take effect on new construction once the buildings are completed and appraised, and on new equipment in the first year it is used.

Estimating the amount

Determining an actual dollar amount of the abatement is difficult, though, Zigmont said, since there are no specifics on how big any new buildings would be, what type of equipment will be purchased or what renovations will be done.

"There's a big ballpark there," he said. "You could try to estimate it and be off by $1 million or more."

Zigmont did say, however, the latest GM tax abatement is easily one of the largest in the state since the tax abatement program started in the mid-1980s.

This tax abatement marks the third one granted to GM, and represents one of more than 100 granted in Trumbull County, Zigmont said.

The previous tax abatements, one each at the fabricating and assembly plants, come due this year and next year.

slshaulis@vindy.com




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