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Youngstown mayor suggests a JEDD at the Austintown racino

Published: Wed, July 3, 2013 @ 12:08 a.m.

By David Skolnick



Creating a joint economic development district with Austintown at the location of the racino under construction in the township, Youngstown Mayor Charles Sammarone said, would be a financial benefit to both communities.

Under the city’s scenario, Youngstown and Austintown would share money collected from an income tax imposed on all workers at Hollywood Slots at Mahoning Valley Race Course and a profit tax on the racino.

“It benefits both communities,” Sammarone said. “In government, everyone has a money problem. You can’t sit idle and be satisfied with a win today. You have to do better tomorrow. We have financial ways to help Austintown with [the racino] and other undeveloped properties.”

A JEDD permits a city to provide needed infrastructure, such as water and sewer lines, to locations in a township. The city is permitted to impose taxes in exchange for those services.

Youngstown imposes a 2.75 percent income tax on those who live and/or work in the city as well as a 2.75 percent profit tax on companies in the city. The income/profit tax at the racino likely would be 2.5 percent, though that would be negotiable, said Youngstown Finance Director David Bozanich.

But Austintown trustee Lisa Oles is adamantly against the idea, criticizing city officials for looking to make a quick buck at the expense of Penn National Gaming Inc., which owns the racino under construction, and at the expense of its employees.

Bob Tenenbaum, a Penn National spokesman, said his company has had no discussions with the city on water or tax issues.

“A JEDD is a very typical thing that happens in a development project like this,” said Tenenbaum, specifically talking about an income tax on workers. “We don’t look at a JEDD that taxes employees as anything unusual at all.”

But he wasn’t as accepting of a profit tax, declining to comment on it.

Also, trustee Jim Davis said he wouldn’t oppose an income tax, but doesn’t support a profit tax.

“We don’t want it to be a money grab,” he said. “Granted, it would be great, but we want businesses to build in our community. That would discourage business coming to our community.”

The city can’t legally change its taxation laws to get rid of a profit tax, but can reduce the tax amount or possibly provide a refund through a tax-credit program, Bozanich said.

Austintown trustee Richard Stauffer couldn’t be reached Tuesday to comment.

In a Tuesday letter to township trustees, Sammarone wrote that “the time has come to discuss a mutually beneficial JEDD arrangement.”

While there are many possible tax scenarios, Davis said the three trustees agree that any proposal would need unanimous consent from the trio. Oles said she has no interest in working with the city on a tax plan for the racino.

Sammarone wants a definitive answer on the JEDD proposal from the township by the end of the month. If the trustees aren’t interested, “we’ll figure out Plan B, whatever that is. This is an idea. Either do something or put it to bed. I want to work with people. I’m not here to only help my city. I want to help the area.”

Davis wants to keep discussing issues related to the racino with the city.

Oles and Davis said Youngstown officials have told township leaders that a JEDD possibly could provide about $2 million a year in profit and income taxes to be split between the township and city.

Bozanich said there isn’t a specific figure, and the city is looking at other scenarios to benefit Youngstown and Austintown.

Among the scenarios is Youngstown assessing a water-connection fee for Penn National’s racino if a JEDD doesn’t work, city and township officials say.

Bozanich said there are different figures being considered. Oles and Davis said Youngstown officials told township leaders that figure also is $2 million.

Tenenbaum said, “If in fact Youngstown wants a $2 million-a-year payment to use city water, that would be unprecedented. It could have a chilling effect on the project.”

The company is looking at all water and sewer options, he added.

Penn National is spending $125 million to construct Hollywood Slots and another $125 million to the state for its slot-machine license and a relocation fee from Beulah Park in Grove City. It will provide $1 million to Austintown in 2014 and 2015 for infrastructure improvements, and then $500,000 a year as long as the racino is open that the township can use at its discretion.

That is enough money for the township, Oles said.

“We’re not looking to get any more money than what will be given to us from Penn National,” she said.

The racino is expected to be finished by next year. It will feature about 1,000 video slot machines.

Oles’ relationship with city officials has been cool since Youngstown proposed in August 2006 — during the Mayor Jay Williams administration — a JEDD with Austintown and the portions of Boardman that get city water. The plan was to tax existing and future businesses in those townships. The pushback from Oles and others resulted in the proposal going nowhere.

Sammarone, who was city council president at the time of the JEDD proposal, said he also opposed taxing existing businesses in the suburbs.


1author50(1121 comments)posted 3 years ago

The city needs to grab more cash in order to 'fund' downtown bars. Hope the good people of Austintown and their well respected elected officials throw up another roadblock to this nonsense.

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2AtownParent(565 comments)posted 3 years ago

Youngstown had nothing to do with getting the racino here but now they want a piece of the action? Please. I didn't see Sammarone driving 3 hours to each gaming meeting trying to convince them to allow the plans to pass. I didn't see Sammarone meeting with anyone while the talks were happening. I agree Bozanich is a shyster and no deal he proposes is good for the townships. Water has gone up every year and still they don't have enough money. Maybe they should look at their out of control spending.

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3NoBS(2827 comments)posted 3 years ago

Where was Youngstown during the years - yes, years - leading up to the building of the racino? Now that they smell the chance to glom onto someone else's money, here they are with their hand out.

The Austintown Trustees are nuts if they even look at the JEDD.

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4AtownAugie(891 comments)posted 3 years ago

The Youngstown brain-trust is giving JEDD such new meanings as "Jeopardize Every Decent Development" and "Jawbone Every Darn Dime."

Perhps the most apt is "Just Eagerly Devouring Dollars "

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5walter_sobchak(2716 comments)posted 3 years ago

There is no way I would want to enter into any type of agreement with Youngstown but there is a huge problem. The City of Youngstown only has one asset on which they can capitalize: water. This facility will require significant quantities of water from the casino, to the restaurants, and especially the horse area. Youngstown has established and maintained a water supply and distribution system. They have it and they can use it for leverage. Where else will the racino get the water? Aqua Ohio? Warren? Any other water empoundment is many miles away and the cost to install a line would be prohibitive to the project. Look at a map; Youngstown, Niles and McDonald own Meander Reservoir. Canfield buys bulk water from them. Many communities across the country require annexation for water supply. So, Trustee Oles can talk tough but she will have little choice but to enter into some type of agreement with Youngstown. It's the best "worst" option.

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671to76home(6 comments)posted 3 years ago

Clearly, no one understands what a "JEDD" (Joint Economic Development District) truly is... Let me break it down.

Youngstown is a municipality and has authority to impose an income tax, Austintown Township does not have authority to impose an income tax. Therefore, municipalities benefit from having jobs by collecting income tax on workers, but townships do not... (mind you these work in the township, use township services, but may not reside in township and pay property taxes, etc)

So now that you see Austintown is at a disadvantage because they are going to need to improve infrastructure, provide more safety services, etc. due to the increased development of the area we must look at how they can compensate for that loss.

Back in the 90's the State of Ohio began this program to help aide the townships one of two ways, while of course providing an incentive for a municipalities.

One, JEDD is formed in a district of township. Muni provides services, utilities, etc. to district in return of collecting an income tax.

Or, JEDD is formed in a districtof township. Muni simply provides and income tax collection service for the township and keeps a small percentage.

Read the following article to see how Etna Township down here in Central Ohio has used JEDDs to help pull in revenue for the township.


Bottom line is, the only people that hurt from this program are those employed by the businesses. And simply put if the Casino was in a municipality the employees would have to pay the income tax anyway. So what makes working in a township soooo special that you shouldn't have to pay an income tax???

What I think will likely happen is that we will see the two form a JEDD (which I will give a standing ovation for their efforts, about time someone in the Valley utiltizes an innovative program). The agreement will include Youngstown providing some services to the township, including collecting an income tax. In return, Youngstown will kick back a good chunk of that income tax to Austintown Twp. This WILL benefit Austintown Twp more that it will Youngstown.

Please do not read into the political rhetoric. I know everyone grew up with a corrupt and innefficient government in the Valley, but in this case you have to put that notion to the side and recognize this is a SMART move.

"The Youngstown brain-trust is giving JEDD such new meanings as "Jeopardize Every Decent Development" and "Jawbone Every Darn Dime." " -- Do your research, JEDDs have proven to be very beneficial in spurring economic development across the state.

If anyone needs any other Information please let me know and I could provide you with the legislation and fact sheets. I don't have a dog in this fight, just simply would like to help educate the public.

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7Westsider(269 comments)posted 3 years ago

I have lived in both Austintown and Youngstown and before everyone gets their political knickers in a twist, consider the benefits to both the city and the township. With the extra tax money - Youngstown might be able to reduce its tax rate back closer to the former two percent. Sharing the proceeds with Austintown will help the township to maintain roads (which will crumble quickly with the increased traffic) while giving the township access to the water it will need (minus the surcharge). Who loses? No one - and in fact, both areas become stronger financially. Columbus has done much of the same, in fact, if you could see a map flying over Columbus it looks like an octopus - with pockets of joint development stretching in all directions. Columbus continues to grow - look at Polaris, Gemini Place and other locations where new living space, restaurants and shops are being built. But don't worry - the blue-collar, me first, democratic party thug thinking will likely prevail and those of us who live and work here will be the losers

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8YtownParent(1069 comments)posted 3 years ago

Unfortunately for the workers some form of JEDD or cooperative will have to come to pass for all the reasons previously stated; water, increased services costs to the township, etc. The workers should not be the only ones shouldering that tax burden though, without taxing any of the profits of the company. I'm not saying solely and unfairly tax the business, but it is the business owners who will be the chief beneficiary of the racino and its profits, not Austintown, not Youngstown, nor the employees.

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971to76home(6 comments)posted 3 years ago

Auntiem: Yes, the income tax would be imposed on all those earning an income in the proposed district. Youngstown will be the taxing authority and collector. Youngstown and Austintown would then come to a mutual agreement on the split based on the increased services of the two jurisdiction.

YtownPar: I would not go as far to say "unfortunate" for the workers, majority of Ohioans pay a muni income tax in one way or another.

I understand where you are coming from with taxing the business and not the employees. However, you must consider that the casinos are already being taxed, and at a reasonable rate. In fact, Youngstown and the Valley are already benefitting from the taxes being collected from all the casinos across the State. Casinos are a Cash Cow for the State of Ohio.

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10redeye1(5663 comments)posted 3 years ago

I will say once A-town gets involved with Y-town in a JEDD project . How long do you think it will be before Y-town goes after another project My guess not long at all.. The only ones who will be hurt are the workers As far as Y-town lowering its tax rate to 2%, It will only happen when the devil ice skates and hell freezes over. They are nothing but a bunch money grabbing liberals ( DUMBOCRATS) who can't control their own spending habits.

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11DwightK(1537 comments)posted 3 years ago

Lisa Oles has the right attitude but at the end of the day the racino needs water and Youngstown has it. A JEDD will also give Austintown additional funds via the income tax and those funds are needed to remove blight and make capital improvements. She can't really make an argument that the township doesn't need the money.

Mayor Sammarone is doing his job by looking out for what's best for Youngstown. No one will like it but a JEDD is coming.

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12MPur1021240(15 comments)posted 3 years ago

I am not so sure Youngstown needs the income. Has anyone driven down Meridian Road Lately? Lots of new business there and still Meridian Road is one of the most unfit four lane roadways I have ever had the displeasure of driving on. Wasn't the JEDD with Girard and Liberty enough to fix this road?. Not to mention that many years ago Youngstown had a shot at River Boat Gambling down near B&O Station and the citizenry had a fit at the very mention of the idea. Niles could also use the income and being that they are also part of MVSD, I'd rather see them get the JEDD than these blackmailing thugs in Youngstown. Ask Liberty and Girard citizens if they have seen any favorable action from the JEDD's with Youngstown after all, they blackmailed those communities too!

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