A chamber official says tax incentives are 'an unfortunate part of the game.'
& lt;a href=mailto:email@example.com & gt;By IAN HILL & lt;/a & gt;
VINDICATOR STAFF WRITER
AUSTINTOWN -- The school board has endorsed two proposals that would reduce the amount of tax revenue it would receive if businesses are built in the new Centerpointe business park.
The first proposal calls for the creation of a foreign trade zone that covers about 100 acres on the eastern side of the 180-acre park, slated to be located north of Rutland Avenue between state routes 46 and 11. Companies in the zone could apply to be exempt from paying inventory taxes.
That proposal was endorsed by the school board at their meeting Wednesday night.
The second proposal calls for developers to pay for some of the infrastructure construction in the park using tax increment financing. It would require the county to sell $4 million in 20-year bonds to pay for the construction of roads and utilities in the park.
Half of the real property tax revenue from the park would then be used to service the debts on the bonds. The remaining half would go to local schools and government, like most property tax revenue.
Dr. David Ritchie, school board president, said Wednesday night that the board has verbally approved the second proposal.
Developers also are paying about $4 million for the construction of roads and utilities in the park.
Final approval for the tax increment financing proposal rests with the Mahoning County commissioners. For the foreign trade zone proposal, final approval rests with the federal government. Foreign trade zone companies also receive federal duty and tariff tax breaks.
Even if both proposals receive final approval, the school board would still get more tax revenue from the park area than it does today, provided companies build in the park. The land slated to be the home of the park is, for now, an empty wooded lot.
The schools receive about $7,000 in property taxes from the land today, Centerpointe representatives said. A controversial zoning change allowing the park project to move ahead was approved by township trustees in November.
"You're going to continue that unless you get some buildings out there, something that's going to generate additional income," Superintendent Richard Denamen said.
District Treasurer Barbara Kliner has estimated that without additional revenue, the district will be in debt by $3.1 million at the end of the 2003-04 school year.
Reid Dulberger, executive vice president of the Youngstown-Warren Regional Chamber, said tax incentives are one of the most important factors companies consider when relocating.
"It's an unfortunate part of the game," he told the school board in a caucus before its Wednesday meeting.
Dulberger noted that many companies are particularly attracted to communities with foreign trade zones.
"They like to know you have the willingness, the expertise to make this happen," he said. "It sounds silly, but it's silliness sometimes that makes deals happen."
Companies that build in a foreign trade zone won't automatically receive tax incentives from the designation. They have to apply to the federal government for the incentives.
"That's a wonderful opportunity for us," said Centerpointe developer Jonathan Levy. He said the foreign trade zone could help him market the park as a good location for companies involved in international business.
The Centerpointe foreign trade zone would be the fourth in the Mahoning Valley. There is a 1,255-acre zone that covers the Youngstown-Warren Regional Airport, a 66-acre zone near the airport, and a 50-acre zone in Milton Township.
If the Centerpointe zone is created, 100 acres would be taken out of the trade zone at the airport. Ronald DeBarr, the executive director of the Northeast Ohio Trade and Economic Consortium, or NEOTEC, said the land is the site of landing strips today. NEOTEC serves as the administration for foreign trade zones in northeast Ohio.
NEOTEC also is seeking to create a 100-acre zone in the Lordstown Industrial Park on state Route 45.
DeBarr said the federal government could issue approval for the Centerpointe foreign trade zone within the next year.
Levy said Centerpointe representatives are working with the county commissioners on the details of the final tax increment financing proposal.
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