STOW -- There is reason to hope that a property tax incentive given to the developer of a growing business park by the Route 8 and Seasons Road interchange will pay off with more jobs.
City Council unanimously approved on March 23 a 15-year community reinvestment area agreement with developer Seasons Business Center Three, LCC in connection with a nearly 37,000-square-foot office/warehouse flex building on the interchange's southeast side.
Council approved a site plan for the building in February. It is to be constructed south of two other flex buildings, both just under 115,000 square feet in size, that have been constructed on the site in the last couple of years.
"We have a great need to go forward with building three," said Mike Merle, president and CEO of Ray Fogg Building Methods, the project's builder and a partner in the development, during Council's March 23 finance committee meeting. "There's tremendous market demand for that product. The location is exceptional."
Stow Economic Development Coordinator Ken Trenner said, also during the March 23 finance committee meeting, that the agreement will provide Seasons Business Center Three with a net $117,000 annual savings on the new property taxes for the approximately $8.7 million investment that the building represents. This is after the developer pays $55,000 annually to compensate the school district for new taxes that would be due to it. Trenner said taking that payment into account, the developer's savings would be 68 percent of new taxes that it would have paid without that agreement.
The agreement does not affect current property taxes.
Trenner said that in exchange, the developer pledges that there will be at least 60 employees working in the building with annual payroll of at least $2 million after the agreement's third year, similar to CRA's for the first two buildings.
Merle said he believes the first two buildings are already meeting their CRA requirements or close to it. The second building, he said, would be filled with tenants as soon as work was completed to accommodate space for DHL, the shipping firm, and it was expected that the other completed building would soon have its remaining 27,000 square feet filled.
Merle said the CRAs are "absolutely critical" for attracting occupants to the buildings, which have interiors finished according to the needs of the tenants.
"We have competition for every single tenant we put in that space and competition, unfortunately in Northeast Ohio, is pretty much from community to community, it's pretty much based on what communities are willing to do in terms of tax abatements. The city of Stow keeps us very competitive with the surrounding communities and we appreciate that very much."
Trenner said that last year, the city's tax incentive negotiating committee developed a new scoring system to determine the length of time for a CRA that a development is qualified for.
"This project did score high enough to qualify for a 15-year agreement," said Trenner.
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