With a $3.6 million relocation grant for Babcock & Wilcox Enterprises and two land deals, Akron is getting ready to welcome 700 more jobs and 66 new homes.
The city and City Council on Monday also advanced a proposal to give a minority-owned barber college what could amount to $30,000 in grants to help students afford tuition.
The city, when sharing the good news of keeping Babcock & Wilcox from moving out of Ohio, had not previously disclosed any help for the company to move within Summit County. Hundreds of jobs in Barberton and Copley could have moved closer to the company’s headquarters in Charlotte, N.C., instead of the headquarters moving to Akron.
“We did not go seeking [these jobs and income taxes] from Barberton,” Deputy Planning Director Adele Roth told Akron council Monday. “Mayor Horrigan, who initially met with the company and tried to work this out, said, ‘Isn't there something you could do to stay in Barberton? We don’t want to see our neighbor hurt.’”
Akron agreed to let Barberton down easy as millions of dollars in income taxes would follow the jobs. Roth shared more details of the tax-sharing and a $3.6 million relocation grant.
In the next seven years, Akron plans to collect $10.9 million in payroll and profit taxes from Babcock & Wilcox. In the first five years, with a little bit less each year until all of it stays in Akron, the city will send a total of $2 million to Barberton.
At roughly $500,000 annually for the full seven years, Akron is offering a $3.6 million tax break to cover moving costs. “After seven years, we keep 100 percent of” the $1.562 million in estimated annual tax collections, Roth said.
The average salary of the 700 jobs, many of them in engineering, is $93,000, Roth said. “The majority of people employed in Barberton are going to stay employed,” she said, noting that an extra 20-minute commute shouldn't chase off workers.
Council praised the city's foresight — years ago it cut the developers of East End a tax incremental financing deal to lower the cost of a project that's brought new housing, a gym, a hotel, shops and other modern amenities Babcock & Wilcox will use to recruit talent.
The company signed the 15-year lease in East End to save money and signal to investors that the power industry company is not going anywhere. The company, which hasn't seen its stock above $1 since Nov. 5, could get bumped from the New York Stock Exchange.
Council is ready to approve land sales that would raise 12 single-family homes already sold in North Hill and 54 units in the dormant Hickory Street lot in Cascade Valley.
About a year ago, developer Tony Crasi met Madhu Parajuli, a member of the Bhutanese Community Association and one of the thousands of Nepali refugees settled by the International Institute of Akron. Over lunch, Parajuli spoke of a community for his people with safe homes and good schools. “Not once did he ask what’s in it for him. All he wanted to do was help,” said Crasi.
A land swap with Akron Public Schools this year gave the city the old Harris Elementary lot, which Crasi is buying for $88,000 to develop 12 new homes. Parajuli has found an interested family for each, including his parents.
Most of them work in local factories, he said. Some haven’t been in America barely long enough to establish credit. But Parajuli, who became Crasi’s partner on the project, has served as the sales agent, language interpreter and mediator working with a Huntington loan officer to set up mortgages.
When winter breaks, Crasi will start building 1,500-square-foot homes with detached garages in the style of existing homes. Units are capped at $180,000, a price made manageable by the city’s 15-year property tax break on new construction.
Like most on council, Russ Neal praised the project, but offered caution. “It’s a curse that comes with a blessing,” he said, asking everyone at City Hall to monitor whether the development “pushes up property values” for current residents, suggesting that they too might deserve a tax abatement.
Two miles west, Ryan Homes has agreed to pay $400,000 to build 27 town homes and 27 ranch homes from 1,400 to 1,900 square feet, all around $180,000 at the old Hickory Street allotment.
The city has tried since 2002 to generate interest in the scenic lots by building new roads, installing lighting, sidewalks, utilities and an entrance to the nearby Towpath Trail.
Ryan homes will divide some of the lots and add two stubby roads dead-ending toward Memorial Parkway. There are no buyers, yet.
Heeding a concern from Councilman Rich Swirsky, City Planner Jason Segedy said a road study after the construction would determine how to keep traffic moving safely through the valley.
Segedy also said the property is being sold at a loss. “We need to sell it for a price that makes the homes feasible, otherwise the price would be zero and we would not recoup any of that [public infrastructure] cost,” he said.
With prior approval from council, the administration has offered the barber college a $15,000 forgivable loan to help students with their $10,500 tuition. Councilwoman Tara Samples pulled legislation that council was to consider Monday, because of the city administration's action.
“That’s what Beyond Expectations Barber College is all about,” founder Eric Garrett said of giving students, many with criminal records, a second chance. Chief of Staff James Hardy said Garrett’s graduates have set up shops in several neighborhood business districts targeted for revival. Filling empty storefronts helps.
As long as the businesses maintain a good reputation, students make the grade and the tuition assistance goes to those who need it, the city would forgive Garrett for not paying back $15,000 this year or again in 2019.
Reach Doug Livingston at 330-996-3792 or email@example.com.