BLOG: Downtown investment -- a good thing, except in election years

Tom Jackson
Oct 28, 2010

 

City of Sandusky officials are eager to get people to invest in downtown Sandusky, as I reported in Wednesday's paper. So if someone develops a condo project downtown, investing millions of dollars and giving a boost to an area largely known for empty buildings, that's good, right?   Not always. Not when there's a partisan election going on.   In a letter to the editor printed in Sunday's paper, a retired union official named Leeon Caudill criticized Jeff Krabill, a Republican House candidate, for obtaining a tax break for  his LakeView condo project. In his letter, Caudill pointed out that Krabill voted to renew the Sandusky school superintendent's contract in July 2004, then resigned from the board. The board then approved a tax abatement for LakeView, Krabill's condo development.   What matters here is whether Krabill got a special tax break that other people wouldn't have received.   I phoned Gregory Sherman, the city's economic development consultant, who told me that the five year, 50 percent tax abatements are "not exactly particularly generous" and no different from what anyone else would have obtained.   Krabill arguably could have stayed on the board and abstained on the tax abatement vote. In fact, he actually resigned. What else was he supposed to do to avoid the appearance of a conflict of interest?   The city routinely grants tax abatements (and offers loans, and offers other incentives) to people who will help revitalize downtown. A tax increment financing deal helped bring in Kalahari Resort. Most people accept that aging cities such as Sandusky have little choice but to put something on the table when competing against other communities that offer incentives.   Footnote: The Murray law firm received a 100 percent, 15-year tax abatement for its building by the lake. State Rep. Dennis Murray, a partner in the firm, is Krabill's Democratic opponent.   I called state Rep. Dennis Murray, D-Sandusky, to ask if he had any comment on Caudill's letter. Murray said he knew nothing about the letter until it appeared in the paper. "I know nothing about those underlying events and I have no comment on it," Murray said.

Comments

Pete

I have a problem with Tax Expenditures (Rebates, Incentives, etc). It seems that it has almost been reduced to a bidding war as to which state or city is going to pay more for a project.  Take Georgia and the Kia plant:

Georgia gave Kia $410 million in incentives, including $76 million in job tax credits, $61 million to buy and upgrade the site, $20 million for job training, and $130 million from West Point and Troup County in property tax abatements.

How much should the average citizen finance a factory? Right now I doubt Ohio or any other Rust Belt State could afford to give away this kind of money. I know that some of the $410M is money that the state would have never recieved had they not located there, but the $61M to buy the property and the $20M to train people is a little over the top. But hat is how it goes now adays!

From the same article for people who like to bash me for saying that Ohio needs to change it's labor laws:

Before Georgia landed the plant, Kia considered Meridian, Miss., and Chattanooga, Tenn., also in states with right-to-work laws that weaken unions. Michigan and other states without those laws were not in that mix.

We do need to revamp this state, from the ground up. Gotta do sumptin! What we are doing now is NOT working at all!

Pete

I'm sure a chunk of the $20M training was Fed money. The rest is hard to tell. The abatement most likely aren't any Fed money unless they have to make up a shortfall for "something"

I think this state has one of the best infrastructures to support heavy manufacturing in the country. But most of what was great factories in this state sits empty, contaminated, and unusable. Take the old crayon plant. Direct rail access. Just a short drive to the Turnpike. Water is close by too but not set-up for shipping goods except coal anymore.

Boeing is building that plant in South Carolina. In my mind I look at Mansfield for that factory. Lahm has the second or third longest runway in Ohio (9,000 feet). Rail is pretty close. Easy access to I-71 and I-30.

There is a reason they locate down south. We have to emulate it as much as we can or die trying. We cannot get much worse

brutus smith

 pete, I  agree with you that something needs to be done, because these bidding wars don't get it. How much of that in a round about way was funneled in from the Fed? Taxpayers should not have to subsidize Corporations.