Ohio Tax Credit

“The Ohio Tax Credit Authority is a five-member independent board consisting of taxation and economic development professionals from throughout the state. The Authority is charged with reviewing and approving applications for tax credit assistance. In addition, the Authority and its compliment of staff provided by the Ohio Development Services Agency (DSA) have oversight responsibilities that include annual monitoring and reporting the progress of approved tax credit projects.” (Ohio DSA website) Christiane Schmenk is chairperson by virtue of being Director, DSA. Two members are appointments made by Governor Kasich — Emmett Kelly of Frost Brown Todd LLC, Cols. and Rodney Crider, President Wayne Economic Development Council, Wooster. Jamie N. Beier Grant, Director Ottawa County Improvement Corporation, Oak Harbor was appointed by House Speaker William Batchelder and David Smith, Director, Economic Development, Duke Energy, Mason was appointed by State Senator Tom Niehaus. This week The Newark Advocate (and others) reported that the Ohio Tax Credit Authority approved tax credits for SpeedFC which leases space from ProLogics on US 40 in Etna township. Prologics offers to build to suit for its tenants with a 15 year 100% Real Estate Tax Abatement. Licking County Real Estate tax collected is spread out to pay for schools, fire protection, county service, road maintenance, senior citizens, library, mental health, children services, township, parks, etc. WCLT reported the authorized tax credit to be 50% for 8 years in exchange for the creation of 250 new jobs. ProLogics has agreed to custom build and lease a new 770,000 square foot facility for SpeedFC. It is unclear whether this is in addition to what SpeedFC has been leasing to date. SpeedFC located in Columbus in 2006. What the terms of their startup were (with regard to tax abatements/job creation credits) is unclear. They are a private corporation founded by Jeff Zisk, chairman, and three other members of the board. The Newark Advocate has Dan Evers (Licking County Chamber of Commerce economic development director) of Grow Licking County Community Investment Corporation claiming that the current annual payroll of $5.5 million will eventually increase to $11.5 million. Employee payroll taxes are unaffected by the Ohio Tax Credit Authority decision. The W-2 form that workers receive at the start of every year shows the total of Federal taxes withheld (income, Social Security, etc.), State (the part SpeedFC got a 50% credit for over the next 8 years), and Local (regardless of where the worker resides). In addition to this, the worker may need to pay the income tax in the “Local” municipality in which they actually reside. A school income tax may also be withheld if the worker’s school district is funded by this in addition to the Real Estate property tax (for which SpeedFC pays none). Bottom line is that the worker, through their payroll and Real Estate tax will be paying for the municipality, roads, county services and schools in the area in which their employer, SpeedFC generates its earnings that ultimately go out of state. Dan Evers gives credit for this coup to the concerted efforts of the chamber, Etna township officials, Licking County Commissioners, Columbus 2020, ProLogics and Southgate Corporation. “Columbus 2020 is a bold, new, regional public-private partnership that will leverage Central Ohio´s research and academic institutions, diverse industries to position the State Capital to become the fastest growing economy in the country and one of the nation´s leaders in economic development.” (Cols. 2020 website). ProLogics is a subsidiary corporation of AMB Property Corp. ProLogics is a world-wide land developer of primarily industrial property with ownership or control of over 554 million square feet in 21 countries. Hamid Moghadam, one of three co-founders of AMB is CEO of ProLogics, a publicly traded company. Southgate Corporation, a private company founded by John O’Neill, now headed by Robert O’Neill, originally acquired the property on US 40 in Etna township for development. Grow Licking County Community Investment Corporation is a public/private enterprise headed by the Licking County Chamber of Commerce. Tom Cummiskey, Park National Bank, is chairman of the Licking County Chamber Board. Etna Township trustees include John J. Carlisle, Randy Foor and Jeff Johnson. Licking County Commissioners are Tim Bubb, Doug Smith and Duane Flowers. Of all the people involved in this tax credit decision, only the last six represent (through being elected) some of those whose payrolls will be taxed. It should be noted that Etna township does not include the city of Newark, and that the only benefit Newark would receive from this arrangement is any taxes on residents employed directly or indirectly because of SpeedFC. “SPEED FC is a privately-owned, leading provider of end-to-end e-commerce services headquartered in Dallas, Texas” (SpeedFC website)


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