MAHONING COUNTY Council OKs tax break

Consider win-win alternatives to tax abatements, a school board member says.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- City council has authorized its standard tax break to a steel service center proposing to add about 10 workers within three years.
The board of education, however, is asking the city to consider creative alternative arrangements on such projects.
Council approved a 10-year, 75-percent personal property tax abatement Wednesday for Geneva Liberty Steel on Martin Luther King Jr. Boulevard. The board of education had earlier approved that abatement.
The company has restarted the former Geneva Steel Inc., said T. Sharon Woodberry of the city's economic development office. Metals USA, of Houston, bought and then closed Geneva several years ago.
Geneva Liberty recently acquired Metals USA -- and thus Geneva -- from a bankruptcy proceeding, Woodberry said.
About the company
Geneva Liberty has invested $3 million in the restart and has 22 full-time workers. The company, which cuts and finishes steel coil, said it will invest an additional $1.5 million in equipment and $3.8 million in inventory. The company president could not be reached to comment Wednesday.
The company plans to create about 10 new jobs over three years, said Dave Bozanich, city finance director.
Virtually all tax breaks are 10-year, 75-percent abatements, the maximum the city can offer without school board approval.
But school officials are asking the city to negotiate payment in lieu of tax deals instead.
Jacqueline Taylor, school board president, said the district is interested in tax deals such as one involving Corrections Corporation of America.
Last year, a payment in lieu of taxes-- or PILOT -- was part of a lawsuit settlement among the city, schools and company. The deal translated into CCA paying $700,000 to the city and school district instead of paying any property tax for 12 years. The schools got 70 percent of that figure and the city the rest last year.
"I would like to come up with solutions that make tax abatements a win-win for the [school] district and the city," Shelley Murray, school board member, told council Wednesday.
For qualifying future abatements, Murray suggested consideration be given to negotiating PILOTS, in which a company would agree to make tax-deductible payments, and the school district would not put itself or the children's education at financial risk.
Another alternative strategy would be to forgive some taxes in exchange for a company's providing on-the-job training for pupils in the city schools or for the company's donation of its products or services to the school district, said Carolyn Funk, school district treasurer.
Although Council members did not discuss tax abatement rationales among themselves in Wednesday's meeting, committees from council and the school board have met a few times recently to smooth over past tensions over tax breaks.
The two sides talked about the school board agreeing to a 100-percent abatement to help a South Side supermarket survive. The board hasn't yet made that move, however.
But the PILOT request has the potential to open old wounds.
Jeffrey L. Chagnot, city development director, said any PILOT would need to equal a 75-percent tax break for 10 years for the city to remain competitive.
The school district already gets about 80 percent of any property taxes paid. Chagnot wasn't immediately sure how the school district would do better using PILOTs.
rgsmith@vindy.com