Hudson Council could eliminate tax incentive for one company; others remain same

by Laura Freeman | Reporter Published:

Hudson -- The city's Tax Incentive Review Council has recommended continuing three Community Reinvestment Area Agreements and five of the six Job Creation Grant Agreements.

City Council is scheduled to vote on the resolutions Dec. 4.

Community Reinvestment Area Agreements

In a Community Reinvestment Area Agreement, the city grants a tax exemption of new real property improvements.

The agreements recommended to continue include:

• A 2010 agreement with Face-Off LLC dba Meyer Distributing, 6333 Hudson Crossing Parkway, awarded a 100 percent abatement for 15 years for the construction of a 62,000-square-foot headquarters and distribution center for $5 million and the creation of 140 full-time jobs in 3 years with a payroll of $6.7 million.

Face-Off LLC has invested $6.36 million and has 123 full-time employees with a payroll of $8.1 million at the end of 2012. They are on target to reach 140 full-time employees for 2013.

• A 2003 agreement with T.J.E. Real Estate Ltd., 5460 Hudson Industrial Parkway, awarded a 100 percent property tax abatement for 12 years for expanding an existing facility with an investment of $2.8 million, retaining 58 full-time employee with a payroll of $2.69 million and adding 24 new full-time positions and $885,000 to the payroll in three years.

The company invested the $2.8 million and has 102 full-time employees at the end of 2012. Currently the number of employees is 86 and the current payroll iS $6.5 million, according to Dee Edwards, CFO of the company. He told the council the numbers have been down because of cutbacks.

• A 2003 agreement with Hudson Park, LLC dba Universal Screen Arts, 5581 Hudson Industrial Parkway, was for a 15-year, 100 percent abatement for constructing a 77,000-square-foot building for $2.7 million and relocating 104 full-time employees with a payroll of nearly $4 million. It also committed to hiring 16 full-time employees in three years with a payroll of $330,271.

Total employment at the end of 2012 was 116 and a payroll of $6 million. Matt Bender, CFO for Universal Screen Arts, told the council some of the Hudson staff was moved to another location, but payroll increased.

The Tax Incentive Review Council reviews incentives annually to terminate or make adjustments to the agreements.

Job Creation Grant Agreements

Under the Job Creation Grant Agreements, the company's employees pay city income tax, but then the city provides the company with a grant from a percentage of the tax to use for start-up costs, training and other expenses.

The council recommended terminating the agreement with Brew 1 Coffee Co. because President Craig Waters said the company could not raise the capital needed to sustain the operations and closed.

Economic Development Director Chuck Wiedie said Nov. 26 Brew 1 Coffee Co. filed an application for the Job Creation Grant Agreement in June 2012, but they never applied or received any money.

The Job Creation Grant Agreements recommended for Council included:

• A 2010 agreement with Beauty Systems Group LLC, 5700 Darrow Road, for 35 percent of the income tax paid by new employees for five years. In return, Beauty Systems was required to create 42 full-time positions with a payroll of $1.66 million in two years. Beauty Systems has 30 full-time positions and payroll of $1.63 million at the end of 2012. They have met their commitment to payroll but are short 12 positions. Frank Fulco, vice president of the company recommended the number of positions should be adjusted to 32 but the company still meets payroll numbers.

• A 2008 agreement with Norandex Distribution Inc., 300 Executive Parkway, was for 50 percent of income tax paid by employees for eight years in exchange for creating 75 full-time positions with a $5.1 million payroll by December 2011. At the end of 2012, Norandex had 81 full-time positions with a payroll of $6 million.

• A 2010 agreement with Face-Off LLC dba Meyer Distributing was for 50 percent of the income tax paid by new employees for eight years. The company was required to create 140 full-time jobs and a $6.7 million payroll. As of December 2012 Face-Off LLC has 123 full-time employees with a $8 million payroll.

• A 2010 agreement with Lexi-Comp Inc., 1100 Terex Road, was for 50 percent of the income tax paid by new employees for five years if the company retains 113 full-time employees with a $8.68 payroll and the creation of 30 new full-time positions with a payroll of $1.5 million within two years. Lexi-Comp Inc. has 147 full-time employees with a payroll of $12 million at the end of 2012. Michael Metz, vice president of finance, told the council the company is looking to lease an additional 6,000 square feet and increase the number of employees to support its growing international business.

• A 2009 agreement with Little Tikes for 50 percent of the income tax for six years requires it to retain 366 full-time employees with a payroll of $15.2 million and create 66 full-time positions with $1.65 million payroll by June 2012. Little Tikes has 406 full-time employees with a payroll of $14 million. Greg Shirk, controller, told the council the numbers were down because the company was converting temporary workers to full-time and expected the number of full-time employees to increase with the company's investment in injection molding machines.

The Tax Incentive Review Council includes city officials, representatives from the Hudson City School District, Hudson Area Chamber of Commerce, the Hudson Economic Development Corp. and the Summit County Fiscal Office.

The council met in October and its recommendations to Council Nov. 26 included comments from representatives from the companies receiving tax incentives.

Email: lfreeman@recordpub.com

Phone: 330-541-9434

Facebook: Laura Freeman, Record Publishing

Twitter: @LauraFreeman_RP

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