MANSFIELD — Mansfield City Council on Tuesday approved a tax incentive package for Adena Corp. that will lead to a $5 million investment and creation of at least 15 new jobs.
Unanimous votes for a property tax break and a job creation tax credit agreement came despite a letter of objection from Mansfield City Schools Supt. Stan Jefferson claiming the district will lose real estate tax revenue from the deal.
The deal will lead to the construction of an 18,000-square-foot building at Adena’s 1310 W. Fourth St. site at an estimated cost of $3 million. In addition, the company will invest $2 million in new equipment and hire 15 new full-time employees over the next three years.
There are are three companies involved in the deal, all led by Randy Payne — Adena Corp., Rylanda Real Estate Development, LLC, and North Central Fabricators CIM, LLC.
In exchange, the company will receive:
— a 50-percent, 15-year property tax abatement as part of a community reinvestment area. The CRA program is a widely used, direct incentive tax exemption program benefiting property owners who renovate existing structures or construct new buildings.
— a 50-percent, six-year job creation tax credit agreement that will see at least an additional $705,000 in annual payroll within three years.
Tim Bowersock, the city’s long-time economic development director, told lawmakers the purpose of the project is to give Adena a greater ability to make larger steel components for the building industry for themselves, as well as outside customers.
He said it would allow the company to bid on bigger projects.
“This equipment can be used for steel on much larger projects that an affiliated company, Adena Corp., can now bid and award the work to NCF CIM,” the request said.
According to the request, NCF CIM has no space left in its existing building to allow for expansion.
“The company would like to work on larger structural steel projects, but is currently limited on yard and fabricating space. Construction of a new 18,000-square-foot building attached to the current facility will allow for new overhead cranes, layout master, beam master and angle line,” according to the paperwork.
“This tax incentive will help to offset the expense of constructing the building and capital used to purchase the equipment. The tax incentive will help to keep operating expenses down while the company works with Adena Corp. to acquire new business,” according to the request.
Bowersock said the company’s goal is to have the new building completed by the end of 2024.
“(However,) they’re starting a couple of months later than they originally had planned.”
He said Jefferson’s letter, which he received Tuesday, claiming the school district would lose revenue under the deal is not a new one, though it’s seldom made these days.
“This argument is we’re taking money of out of their pockets. It’s one I actually haven’t had thrown at me for about 20 years now.
“The counter is … I am not in their position … (but) if we do not use this kind of incentive, which we do fairly judiciously, some of these projects aren’t going to happen or it’ll happen on a much smaller scale,” Bowersock said.
He said the company considered putting the new building at its operations in Florida.
“Their preference was here, but to do it here, they need some (incentives) and these two pieces of legislation are to provide that,” Bowersock said.
MCS officials have claimed the district is in a tough financial situation. The district’s school board voted Tuesday to move forward with putting a new emergency levy on the November ballot, a combined property and income tax levy.
The proposed five-year levy would generate approximately $7.8 million in new operating money for the school district. Approximately $3 million would come from property tax; the remaining $4.8 million would come from income tax.
In his letter, Jefferson said, “Over the term of the 15-year CRA, the district will lose approximately $395,700 in real estate tax revenue from this abatement.”
Bowersock disagreed and said the incentive package does not affect the school district’s existing tax base.
“We’re not taking anything away from them,” he said.
Bowersock noted that Adena Corp. works well with area school districts in helping train students for the construction trades industry.
At-large Councilman David Falquette pointed out if the project doesn’t take place, none of the jobs and additional revenues will be received.
“This is money they are not already receiving. This is new money,” he said.
At-large Councilwoman Stephanie Zader agreed.
“I think 50 percent of something is better than 100 percent of nothing,” she said.
“We’ve been talking about economic development being needed in this city since I moved here. I think it’s important to support businesses that want to invest (here),” she said.
“Adena has invested an immense amount of money and time in our community. I think it would be a slap in the face to them if we did not help them expand,” Zader said.
“What we’ve continually seen as a city is companies invest in other communities because we haven’t been able to provide them what they’ve needed,” she said.
