Tax Incentives Renewed for Mahoning County Companies

YOUNGSTOWN, Ohio – Tax incentives for 14 companies will continue after approval Thursday by the Mahoning County Tax Incentive Review Council.

Council members, including county, township, municipal and school district representatives, meet annually to review tax incentives granted to companies.

The council approved four tax increment financing projects affecting seven companies. Under a TIF, a percentage of a company’s new real estate taxes are diverted into a separate fund that is used to finance construction of public infrastructure.

Through Hollywood Gaming at Mahoning Valley Race Course in Austintown, more than $4 million in road, sewer and signal projects were completed in the township in 2023. Future projects include road resurfacing.

In Jackson Township, the TIF generated more than $133,000 from PurFoods, Truck World, FedEx and the Ohio Utilities Protection Service that paid for roads to be resurfaced, with more work planned.

Through the Inn at Poland Way in Poland Village, more than $297,000 has been used for sanitary sewers, road resurfacing and improvements.

The Aqua Ohio Inc. project in Struthers will fund future projects including the CASTLO rail bridge painting and road resurfacing, building demolition, signal upgrades and sanitary and water line extensions.

The council approved Community Reinvestment Act agreements for four companies: Hilltrux Tank Lines, Liberty Steel and Republic Steel Metals in Jackson Township and Southern Park Mall in Boardman.

CRA agreements allow companies investing in designated areas tax breaks on new real property for 15 years. Unlike an enterprise zone agreement, a CRA does not require pledging a specified number of jobs or investment.

The council also approved continuing the Ohio Enterprise Zone agreements for Advance Recycling Systems in Coitsville Township and Nordson Xaloy Inc. and Trumbull Manufacturing, both in Austintown.

Advance Recycling Systems, which was granted a 60% tax abatement for 10 years, beginning in 2014, exceeded its projected investment and job creation projection.

Nordson Xaloy exceeded its projected investment but hasn’t yet met its job creation projection. The company’s 10-year, 60% abatement started in 2018.

Trumbull Manufacturing’s 10-year, 60% abatement started in 2019. It has met its projected investment and has nearly met its projected job creation.

Mahoning County Auditor Ralph Meacham, who is chairman of the Tax Incentive Review Council, told members about a challenge his office faces with the transfer of limited liability companies from one owner to another when property is involved. It’s an issue for county auditor’s offices across Ohio.

When the owner of a limited liability company owns a group of apartment buildings, for example, and sells the LLC to a new owner, on the conveyance form, they indicate there was no money transferred for the real estate.

“Which is a fiction,” Meacham said. “By doing that, when they go through their conveyance form they don’t disclose to us what that purchase price was.”

The county then doesn’t know what the fair market value of that property is.

“Why does that make a difference?” Meacham asks. “Well, we have 20 apartments in Austintown [for example] that have sold. We’d sure like to know what this one sold for compared to the others so we can fairly market those on our revaluation period.”

Mahoning County doesn’t have the volume of commercial and industrial properties that it does in residential.

“We don’t feel like we have all the information required to do fair market value on these other properties without that being disclosed,” the auditor said.

There’s also a problem because of a lack of a transmittal fee. 

“If you went out and bought a house, you’ll see that there’s X amount per $1,000 for transmittal fee,” he said.

That’s paid unless it’s an exempt transfer, such as if a parent sold it to a child. A family transfer could be exempt from that fee.

“But if it’s nonexempt like everyone else, you pay the transfer fee,” Meacham said. “Same with these LLCs. They say, ‘We didn’t transfer any real estate. We just bought the LLC.’”

Meacham has seen one case in a residential property too.

County auditors in the state have been appealing to the state Legislature to change the law to prohibit such transactions as Ohio is one of three states that permits it, he said.

Pictured at top: Hollywood Gaming at Mahoning Valley Race Course in Austintown.

Copyright 2024 The Business Journal, Youngstown, Ohio.