Omnova Solutions Inc. of Fairlawn is poised to get a state tax credit related to its planned new headquarters and corporate expansion in Beachwood.
Fairlawn Mayor Bill Roth, whose city had offered more than several million dollars in financial incentives in an attempt to keep the global headquarters of the surfaces and laminate maker, was disappointed to hear of the estimated $381,000 state tax credit.
The tax credit — approved Monday by the Ohio Tax Credit Authority — would be awarded to Omnova should it add 70 new jobs in Beachwood, creating $4.725 million in new annual payroll.
“For the state to give money to enable a corporation to move from one city in Ohio to another is pretty disappointing ... I can understand state monies being utilized to get jobs into the state to get job expansion,” Roth said.
Roth said that in “all the discussions we had [with Omnova officials] there was never a veiled threat or anything that they were looking to relocate out of the state of Ohio.”
The mayor said Fairlawn’s proposed incentive package “was a very strong, good faith offer” and included city tax credits for job expansion.
Roth said Omnova, whose roots go back to 1915 and former parent General Tire & Rubber Co. in Akron, said earlier this month it planned to relocate its headquarters to Beachwood, moving about 110 full-time jobs from its leased facility at Ghent and Smith roads, across from Summit Mall in Fairlawn.
The company said previously that it expects growth could result in an increase of 70 workers at the Beachwood headquarters over the next five years.
The company has said it expects to break ground in Beachwood this year and to move in by late 2014.
Laura Jones, a spokeswoman for JobsOhio, Ohio Gov. John Kasich’s privatized economic development program, said in an email Monday that Omnova officials told JobsOhio representatives that the company was considering three out-of-state locations. They were the Washington, D.C.; Minneapolis, and Raleigh/Durham, N.C., areas.
“They discussed with us, among other things, labor studies they’d conducted in all four locations [including Beachwood]. We took all of that very seriously.”
Omnova spokeswoman Sandi Noah said, “We did evaluate numerous options both in and out of Ohio.”
The Ohio Tax Credit Authority on Monday granted Omnova a 50 percent, five-year Job Creation Tax Credit, with an estimated value of $381,000. The value of the credit is based on state income tax withheld by the company and the company creating the 70 jobs and the additional $4.75 million in annual payroll.
The agreement with the state requires the company to maintain operations “at the project location” for at least eight years.
The state’s “proposed scope of work” for the Omnova project says the company expects to retain $18.5 million in existing payroll at the site.
The Plain Dealer newspaper reported that Beachwood City Council approved a $629,000 job-creation incentive grant for the company. Omnova also will get a $500,000 relocation grant from the city, among other incentives, the newspaper reported.
The company is borrowing $3 million from JobsOhio for land-acquisition costs, according to the newspaper.
Omnova has said it is retaining its technology center and factory in Akron, as well as its Mogadore manufacturing facility.
Including the 110 employees at corporate headquarters, Omnova’s Akron-area workforce totals 365.
Omnova’s sales for the 12 months ending May 31, 2013, total $1.1 billion. Its worldwide workforce totals about 2,300.
Katie Byard can be reached at 330-996-3781 or email@example.com.