YOUNGSTOWN, Ohio (WKBN) – Government leaders have many tools to entice new companies to move to town.
One of those tools is a tax abatement, which is a 10-year reduction on new buildings or business investments.
Tax abatements can mean big savings for companies moving to Youngstown. They get a 75 percent discount on new property taxes. That is a big savings in return for big projects.
Youngstown Economic Development Director Sharon Woodberry keeps an eye on companies who are given the tax breaks to make sure they are living up to their end of the bargain.
“It’s just savings that the company will receive and it goes back into the operations of the company so they can continue to invest,” said Woodberry. “We’ve had companies that have excelled. They started very small, startup mom and pop shops, with just a handful of employees. And from that, they have grown, expanded numerous times.”
To view a summary of agreements for the City of Youngstown Enterprise Zone, click here.
EXAL is one company that got its start with the tax break program. City records show the company spent more than $125 million improving their company. They created 300 new jobs, almost double what they promised, and they are paying workers more than $22 million in wages.
“When you are putting out a lot of cash with these investments, any cash benefit you can get from taxes certainly helps stimulate our ability to make those investments,” said Mike Hoffman, chief executive officer for Exal Corp. “It has helped stimulate our ability to make those investments, and it has helped with our ability to ramp up a bit quicker and it has helped our hiring practices.”
Hoffman said the abatements were just part of the recipe for Exal’s success. He said the location of the business in the Valley played a big role.
“This location brought us a tremendous amount of skills. We have a tremendously talented workforce that has helped us grow,” said Hoffman.
While Exal came through, not every business can keep their promise. Companies move out, are sold, close, or just can’t meet their job goals. That means the tax abatements can be revoked.
Not long ago, General Motors was in danger of breaking their agreement, but government leaders did not want to make the wrong call.
“We most certainly don’t want to be the people who pulled something away from them and be, ‘you were the guys who got rid of GM for us, thank you,’” said Trumbull County Economic Coordinator Mark Zigmont.
All sizes of companies, from international mills to small family print shops, can get the tax breaks. Records show more than 6,000 people in the Mahoning Valley now work at companies that were granted tax abatements.