STOW — The city is retaining one of its largest employers and rolling out the welcome mat for another.
City Council voted Thursday to approve two agreements which Council President Mike Rasor said will mean "hundreds of new jobs.”
Council endorsed a business retention grant agreement with the Morgan Adhesives Company LLC, known commonly as Mactac, which employs 101 full-time and eight part-time employees in offices at 4560 Darrow Road. Council also gave the go-ahead to an income tax sharing grant agreement with the Reserve Management Group LLC, an array of businesses involved in fields ranging from recycling and scrap metal processing to equipment sales and property management.
RMG will locate 350 employees with an initial annual payroll of $13 million to Mactac’s former manufacturing facility adjacent to the offices, according to Ken Trenner, the city’s economic development coordinator.
“Both of these projects will obviously have a very positive fiscal impact on the city of Stow,” Trenner said, adding, “Combined, both businesses have committed to payroll that will generate estimated annual income tax revenue of $325,000 to $385,000 for the city.”
Reserve Management Group intends to move its Cleveland corporate office as well as its Northeast Ohio operations from Twinsburg and Solon sites to Stow, Trenner reported. While Mactac has retained its global headquarters on Darrow Road, it stopped manufacturing there in 2014. In a Nov. 13 memo to City Council members, Trenner said RMG must make “extensive improvements” to the manufacturing portion of the 540,000-square-foot facility to employ it for manufacturing purposes again; he estimated RMG’s investment in the project will exceed $20 million.
Trenner reported RMG anticipates having “450 people working full time in Stow by their third year of operation, with an estimated annual payroll of $17 million.” The income tax sharing grant which Council approved will provide RMG with 25 percent of its payroll tax withholding on an annual basis to invest in infrastructure upgrades; the grant has a 10-year term and is based on RMG’s projected third-year payroll of $17 million.
Mactac officials, meanwhile, have been exploring options in terms of relocating the headquarters out of Stow, the economic development coordinator reported. While company officials have expressed a desire to remain in the city, Trenner said the condition of the more than 50-year-old building has been the catalyst for the search for a new home. However, through the Business Retention Grant Program, Trenner said, the city has secured a commitment from Mactac to remain in Stow by agreeing to assist the company with funding renovations to its headquarters so Mactac may achieve its goal of making the structure more representative of a global company. Mactac’s new parent company, the Japan-based Lintec Corp., also plans to locate its U.S. headquarters to the Stow site. Mactac and Lintec will utilize the offices at the corner of Darrow Road and Commerce Drive, while RMG uses the manufacturing portion. The grant which Council authorized provides 25 percent of Mactac’s annual payroll tax back to Mactac to use for building improvements. The grant has a five-year term.
“Mactac’s $8,673,327 annual payroll generates $173,467 in payroll withholding tax for the city of Stow,” according to Trenner. “By committing to maintain their $8,673,327 annual payroll, Mactac is eligible for an annual Business Retention Grant payment of $43,367, resulting in a net payroll tax benefit if $130,000 to the city of Stow.”
“I think we all know in this community the legacy of that plant,” Mayor Sara Kline said, “And having it filled is not only an economic benefit but truly a psychological boon to this community and I could not be happier.”
“This is an answered prayer,” Rasor stated.
“I don’t know how familiar or how much history they gave you about the Mactac facility,” Rasor told RMG officials, “but it’s something people ask about a lot. It’s a prominent place in town and there’s a lot of community pride in having a thriving business there.”
Ward 3 Councilmember Brian Lowdermilk, who is employed by Mactac, abstained from voting on the agreements.
Twitter: @ EllinWalsh_RPC