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Agreement would discourage communities from stealing businesses from their neighbors
By Rick Armon
Beacon Journal staff writer
Published on Sunday, Oct 12, 2008
When Norandex Building Materials Distribution decided to relocate from Macedonia to Hudson this year, the move highlighted the ugly side of local economic development: company poaching.
Hudson was accused of victimizing its neighbor by luring the company away with a sweeter financial deal.
Now Summit County is pushing an unusual tax revenue-sharing agreement to discourage municipalities from trying to steal neighboring businesses and to lessen the financial impact on a community if a company does move.
The county is asking its 31 cities, villages and townships to approve the voluntary agreement.
The pact — which holds no sway over a company's desire or decision to move — is considered the first of its kind in Ohio.
Akron, Barberton, Boston Heights, Cuyahoga Falls, Fairlawn, Hudson, Macedonia, Mogadore, Reminderville, Richfield, Stow, Tallmadge and Twinsburg are among the communities that have expressed support. The Summit County Mayors Association also has endorsed the plan.
''We're going to do whatever we can to encourage economic development growth in Summit County,'' Macedonia Mayor Donald Kuchta said. ''It all boils down to the thought that Summit County is going to take the lead in how to do economic development the right way.''
Under the agreement, the revenue sharing would be triggered in two cases:
• If a company that relocates has a $3.5 million payroll (the figure will be adjusted for
inflation in future years) or constitutes 5 percent or more of the income tax in the community losing the company.
• If a community offers financial assistance to the company to induce it to relocate.
The community losing the company could receive up to 50 percent of the tax revenue in the first year. The amount would decline to nothing over three or five years, depending on the circumstances of the move.
The two communities also would be able to negotiate their own deal.
Participation is voluntary, but there are incentives to sign on. Communities will receive bonus points on some applications for state and federal funding. And communities that poach will have points knocked off their applications.
County Executive Russ Pry pushed for the agreement after the Macedonia-Hudson flap. He said it's important that communities aren't working against each other.
Of course, the tax-sharing agreement is worthless if a company moves outside the county. And there's no penalty for Summit County communities poaching businesses outside the county border.
''We're not saying it's perfect, but it's a step in the right direction,'' county Councilwoman Ilene Shapiro said.
State officials are watching how the agreement plays out and whether it could be replicated in other regions.
''We think it's a good policy,'' Department of Development spokesman Robert Grevey said.
The agreement also comes at the same time that community leaders are trying to sell regional land-use planning and revenue sharing among 16 counties in Northeast Ohio.
The Fund for Our Economic Future and Advance Northeast Ohio will hold a public forum on government collaboration at 9 a.m. Oct. 21 at the University of Akron's Martin University Center.
Hudson Mayor William Currin, Richfield Mayor Michael Lyons and Pepper Pike Mayor Bruce Akers will make a presentation at 9:45 a.m.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.
When Norandex Building Materials Distribution decided to relocate from Macedonia to Hudson this year, the move highlighted the ugly side of local economic development: company poaching.
Get the full article here.
Comments
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akron, oh
Posted 06:24 AM, 10/12/2008
Does that mean we get to send other commnunities our ho's and well, you get the picture?
akron, OH
Posted 07:58 AM, 10/12/2008
i'd like to see them bring our jobs back from our neighbors chine,mexaco,an japan
Akron, OH
Posted 08:40 AM, 10/12/2008
Businesses move for tax incentives. Take away the incentives and they will move to where they will get them. In otherwords, Pry's plan will drive more businesses out of the county. Very Nice.
WADSWORTH, OH
Posted 09:30 AM, 10/12/2008
SCANDEL IN WAITING.....
akron, oh
Posted 12:54 PM, 10/12/2008
Daniel - try learning to spell.
Wheaton, IL
Posted 02:40 PM, 10/12/2008
Beta,
You are an ignorant fool. These tax-sharing agreements ALWAYS emphasize as a first point the communities of the region working TOGETHER to offer businesses a good deal for staying in the region. This will only help to keep business in the region, lure businesses currently outside the region, and make sure our local communities aren't giving away every shred of tax revenue in order to win a bidding war.
Why don't you take a break from your incessant vomiting of ignorance and actually READ and THINK about what's going on in your community.
Posted 09:13 PM, 10/12/2008
Beta is absolutely correct. These are the same people who have developed us right out of the Rubber capital of the world. Why should one city give up it's tax revenue for another? Should Hudson help finance a deal to bring a company in and then have to share the money with, say the city of barberton who will never be able to attract business? This sounds more like a socialistic idea to help Russ Pry try to look like some great ideaman. If Russ wants to do something productive find a way to fund the county offices like child support where they are gonna lay off around 50 to 70 UNION employees and merge that office with The department of human resources. A little something they are trying to hush hush before elections. The Democrats have run the county straight into the ground
Posted 07:53 AM, 10/13/2008
This is the first step in sharing Revenue boadly..so Akron can regain a share of the lost revenue fromm business who have fled Akron to the surrounding areas....Super Sweethart Tax deals have caused business to remain-Goodyear and Firestone....but they do not stimulate enough tax revenue from people who head out of town each night. Wasted revenue..such as the Inventors Hall of Fame...and the laughable plan to "lease the wastewate treatment plant" to assure the 25% who graduate from Akron ( adjusted to account for the huge drop out rate) to educate kids so they can get out of town.
THe Akron City Limits should read "condemned"
