Economic Development

City Incentive Council Delays Action on Abatements

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YOUNGSTOWN, Ohio – The city’s Tax Incentive Review Council want to meet more often to monitor local companies’ progress in meeting the hiring goals outlined in their tax abatement agreements and to discuss ways to help them meet those goals.

Much of the discussion Thursday at the annual meeting of the council centered on whether companies were doing enough to meet the goals outlined in their incentive agreements and whether sufficient resources are devoted to boosting the hiring of city residents, women and minorities.

During the meeting, the board declined to act on whether to recommend any of the tax abatement agreements in effect and instead scheduled a meeting for Oct. 17 to give them more time to review the 2016 annual report on companies.

The report was sent Monday to members because of an internal office delay, said T. Sharon Woodberry, city director of community planning and economic development. “We try to get them out sooner than that,” she said.

Under active agreements through last year, companies retained and created 956 jobs compared with the 1,128 for the year ended 2015, Woodberry reported. Total investment was $129.8 million, exceeding the $108.4 million committed under the agreements.

“We did see some reductions in terms of employment” between the most recent report and that of the year before, she acknowledged.

Youngstown followed up on a few companies’ efforts in job creation because they fell 25% below their commitments – Coronado Steel Co., City Printing Co., Rudick Forensic Engineering Inc. and Struthers Metal Service Inc.

Struthers Metal Service cited the decline in the steel industry in Ohio and nationwide, which caused it to not replace workers leaving for retirement, school or other jobs. “We have taken measures to get more exposure to our company and the services we provide” by advertising and reaching out to areas of the country the company does not serve, John Scheckelhoff, president and owner, said in a letter responding to the city’s inquiry.

Over the past decade, market trends have shifted from print media to digital, said Joseph Valentini, owner of City Printing, which received a tax abatement to help it move to Oak Hill Avenue. Many of City Printing’s customers are now balancing print and digital, which he predicted would have a “positive impact” on its bottom line.

As in past years, members of the committee were vocal in their concerns about hiring city residents, minorities and women. Of new hires in 2016, just 12% were city residents, 7% were minorities and 8% were women, according to the annual report.

Companies “need to be held to a higher standard,” 1st Ward Councilman Julius Oliver said. He also questioned whether the city is putting sufficient resources toward efforts in monitoring how well companies are meeting the hiring goals to which they agreed.

“This report exemplifies why Youngstown is in the state it’s in. We’re not hiring our own people. We’re not hiring women. We’re not hiring minorities,” he stated.

Under the incentive agreements with the city, employers are required to post openings through OhioMeansJobs. The agreements also call on the companies to make their “best effort” to hire city residents, a standard Woodberry admitted the city hasn’t precisely defined.

“This is all very perplexing to me,” Oliver said. “Why are we giving these companies tax breaks and abatements if its not really benefiting the city residents?”

He also urged more cooperation with unions and the city schools to help improve the pipeline of skilled workers for companies.

“The problem is that parents and students don’t seem to see the value of trade schools,” Mahoning County Auditor Ralph Meacham, chairman of the council, said.

In addition to the lack of skills, the drug epidemic is affecting job candidates’ ability to be hired in the city as it has across the country, Woodberry said.

To better monitor and address the situation, members agreed to meet quarterly.

“We need more updates on a regular basis,” Oliver said.

As part of those meetings, companies having trouble meeting their goals will be invited to attend so the council can help them take steps that would put them in compliance.

The council will extend that invitation to the operators of the DoubleTree by Hilton Hotel and the Joseph Company International. Both are expected to open early next year.

The meetings are intended in “the spirit of a roundtable rather than an inquisition,” Meacham said.

Published by The Business Journal, Youngstown, Ohio.