YOUNGSTOWN — For the first time ever, the city is offering to refund its 2.75 percent income tax to a company to relocate here.

City council will vote July 27 on a “job creation grant agreement” with Steelite International, which is moving its executive headquarters, including 60 to 70 employees, to the Taft Technology Center in downtown Youngstown from New Castle, Pa.

A majority of city council has said it supports the agreement. The board of control would have to finalize the deal.

The agreement would have any income taxes collected from Steelite employees in 2023 refunded 100 percent to the company no later than March 30, 2024.

For 2024, the city would refund 75 percent of the income tax no later than March 30, 2025, with the refund being reduced to 50 percent in the third and fourth years of the deal and then to 25 percent in the fifth year. After that, there would be no refund.

The company’s payroll for the employees is estimated to be $5 million so the refund for the first year would be $137,500. The refund goes down to $103,125 in the second year, $68,750 in the third and fourth years and to $34,375 in the fifth year, according to the agreement.

If the company’s employees make more money, the refunds would be larger. The deal states if the payroll is less than 80 percent of $5 million — which is $4 million — the city “may deny the grant for that corresponding year.”

John Miles, Steelite’s president and CEO, said the employees don’t have an income tax in New Castle so they would end up having to take a 2.75 percent pay cut with the relocation to Youngstown.

The company will give its employees coming to Youngstown a 2.75 percent raise as soon as the move is done, which is expected in October, to offset the city’s income tax, Miles said.

“The city is helping in year one to absorb 100 percent and we’ll absorb the rest” as the percentage decreases, he said. “It’s a tough labor market. You can’t say you’re moving people, cutting wages and they have to drive further” to work. Most Steelite employees impacted by the relocation live in and near New Castle, he said.

City Finance Director Kyle Miasek said he and T. Sharon Woodberry, before her departure as the city’s economic development director, researched to see what other cities offered to businesses besides tax abatements — as Steelite didn’t want one — to entice them to relocate or expand. This was determined to be the best option, he said.

“We see this as a positive step forward to attract the business to the city,” Miasek said. “We don’t have any of this income tax revenue so we’re not losing anything. Then beginning in year two, we’ll start getting tax revenue. This will help grow the city’s income tax base.”

The city may use this tool for other companies, Miasek said.

“We could potentially do it with other businesses,” he said. “It depends on the deals. It’s not a cookie cutter template. This is a reliable entity. We’re not going to give this to just anybody. Each economic deal is unique.”

Steelite makes china, glassware, buffet equipment, lighting and other products for the hospitality industry including hotels, restaurants, stadiums, convention centers and cruise ships.

Steelite has its largest showroom and experience center at the Commerce Building, 201 E. Commerce St. in downtown Youngstown. It’s been there since 2017.

“We look forward to making more of a contribution to downtown and the city,” Miles said.

Steelite also is awaiting an infrastructure grant from JobsOhio, Miles said, but “I don’t see any impediment to the move. It’s safe to say it’s a go.”

The improvements to the Taft Technology Center are estimated to cost $2 million to $3 million.

The company plans to maintain a presence in New Castle, where operations, distribution and light manufacturing are located. Steelite has more than 100 production factories around the world.

dskolnick@vindy.com