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Penn National agrees to meet with Youngstown and Austintown



Published: Wed, July 10, 2013 @ 12:08 a.m.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

With a stalemate on creating a joint economic development district to share tax money at a racino under construction in Austintown, Trustee Jim Davis is requesting a meeting of officials from the township, Youngstown and Penn National Gaming Inc. to discuss the matter.

Under the city’s plan, Youngstown and Austintown would share money collected from an income tax on workers at Hollywood Slots at Mahoning Valley Race Course, opening next year in the township, and a profit tax on money made by Penn National at the racino. State law permits cities and townships to form a JEDD to impose taxes in exchange for needed infrastructure, water and sewer lines from Youngstown in this case.

Township trustees don’t support the tax plan, but Davis, chairman of the board of trustees, said Tuesday he contacted Penn National officials seeking a meeting with company, township and city officials.

“If the township trustees ask us to meet and talk, we would certainly accommodate them,” said Bob Tenenbaum, a Penn National spokesman. “They’ve been extremely cooperative with us.”

A meeting date hasn’t been scheduled.

When told of Davis’ request by a Vindicator reporter, Youngstown Mayor Charles Sammarone said, “I’m not against speaking to anybody, but have him call me and the two of us can talk. Then we’ll see if we need to talk to Penn National.”

Davis had complained that Sammarone provided a letter to the newspaper last week that was addressed to the trustees about a JEDD before giving it to the township officials. Davis said the letter was Sammarone’s way of “throwing his weight around and making noise.”

Sammarone said there wasn’t anything in the letter that he hadn’t told Davis in a previous meeting.

The mayor wants Austintown trustees to decide on a JEDD by the end of the month. At their Monday meeting, all three trustees said they aren’t interested in the JEDD.

Trustee Lisa Oles said she opposes a JEDD as it’s a plan by “greedy politicians” to tax middle-class workers.

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.

The township is not looking for more money than that, said Oles, who successfully fought a 2006 Youngstown proposal to create a JEDD to tax existing and future businesses in Austintown and portions of Boardman that get city water.

A JEDD at the racino could provide about $2 million a year in profit to be split between the city and township. While the city’s income and profit tax rate is 2.75 percent, the racino tax likely would be 2.5 percent, though that’s negotiable.

“Why would anyone object to it when it will bring money into the township?” Sammarone said. “It’s their decision to make. Let’s sit down and talk about it” and then go to Penn National. “If they’re not for it, tell me and I’ll look at something else. I don’t know what that plan would be. You don’t dictate to anyone. You negotiate. If they don’t want to work on this, we’ll deal with the company.”

Talking with Youngstown about the water issue is necessary, Davis said, but he wants Penn National to be a part of those conversations.

“We can work it out with all parties,” he said. “We can discuss the options to get this worked out so there’s not a delay. [Penn National has] no objection to sit down and come up with a best-case scenario how to resolve this issue. We get nothing accomplished if we sit here banging heads.”

If the JEDD idea is dead, the city will look at other scenarios, Sammarone said.

One is for the city to assess an annual water-connection fee for Penn National, with $2 million being the figure thrown around.

As for a profit tax on Penn National, Sammarone said there is the possibility it can be eliminated or at least reduced through tax breaks the city would give the company.

But city Finance Director David Bozanich said last week the profit tax can’t be waived if there’s an income tax. City Law Director Anthony Farris said Tuesday that his initial reading of state law is “it doesn’t appear we can exempt” Penn National from paying a profit tax if an income tax is imposed on racino workers.

“From our point of view, it’s all speculation,” Tenenbaum said. “We haven’t seen a proposal and haven’t spoken to the city.”

Tenenbaum said last week that a JEDD that taxes employees’ salaries “is a very typical thing that happens in development projects like this.” But he declined to comment on a profit tax and said an annual $2 million fee to use city water would be “unprecedented” and “could have a chilling effect on the project.”


Comments

1author50(1121 comments)posted 1 year, 2 months ago

Mayor Strongarm needs more taxpayer's money for his son's newest bar idea down.

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2DwightK(1256 comments)posted 1 year, 2 months ago

Youngstown has the water, the racino needs the water so a JEDD is going to be formed. The Austintown trustees may have been bought off with 500k a year but the city is going to want some money for the water.

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3walter_sobchak(1910 comments)posted 1 year, 2 months ago

Many cities require annexation if you want water and sewer service provided to an area. Let's face it, the only asset Y-town has is its water department. This facility will require lots of water. Youngstown has it and there is really nowhere else it can be obtained. There is no other source anywhere close. Some type of agreement will have to be made, like it or not.

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4Knightcap(699 comments)posted 1 year, 2 months ago

Some of the suburbs of Youngstown have no income tax. Maybe those burbs should look at ways to impose a 5,000.00 annual occupation tax on Youngstown citizens who work in those burbs. Youngstown charges income tax on people from the suburbs who work in Youngstown. They say it's to pay for fire, police, dog catcher if you need one while you are working in their town. Well, maybe it's time the burbs start charging the Youngstown workers out in Boardman and Austintown. To help pay for police, fire and dog catcher, of course. Seriously, when you read the Boardman police blotter you see a lot of Jawanda's, Jamali's, Jojanna's and Jumangi's being arrested. I don't think they live in Park Harbour. After thinking it over, maybe this won't work. There's not that many people who work and live in Youngstown. A lot of low information voters.

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5realitylesson(13 comments)posted 1 year, 2 months ago

There will be no JEDD, get over it. Lisa Oles wont vote for it and if it goes to the vote of the residents, Austintown will never pass it.

It is a money grab by Youngstown where they have no right to it.

The purpose of a JEDD is for a Twp and a City to work together pooling resources together to attract new business. That is they form the JEDD on unincorporated undeveloped land each sharing in the burden of devloping the land for use such as adding roads and infrastructure using the authority of the city for which Twp doesnt have to attract new business that otherwise wouldnt be here.

The racino is coming it here without the JEDD 0 benfit to the TWP and 0 burden on the City so it is a clear money grab by the city, 1 mil in taxes - 0 expense = all profit for the city. JEDD for it to be a worthwhile adventure means both entities share in the burden.

Before someone says "well Austintown would get a portion of the income tax so they make out" this is true, but the other half of the story is they would lose property tax money by the constitution. The presence of an income tax changes the formula of inside millage reducing the amount Austintown would receive.

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6realitylesson(13 comments)posted 1 year, 2 months ago

yes Youngstown can hold them hostage for water. but then Penn can walk now cant they? Dont think they will? Thats what the racing commission thought, that bluff was called and they backed down. How many other companies have left because of the 'water game'? Let's keep acting as we have in the past that these enterprises need us more than we need them, shall we? Really worked well in the past hasnt it?

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7NachoCheese(163 comments)posted 1 year, 2 months ago

Austintown, Boardman, Canfield and others WHEN WILL YOU LEARN? You need to INCORPORATE and kill off this extortion for water game once and for all. Youngstown and Warren in particular have killed off the entire Mahoning Valley over the last several decades with this game - why aren't you smart enough to take this step that will put a stop to it. INCORPORATE NOW AS YOUR OWN CITY AND BE DONE WITH THIS EXTORTION!

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