CUYAHOGA FALLS — One city’s gain will be another municipality’s loss.
A tool company is planning to make a $22.4 million investment that will move 84 employees, equipment and inventory from two buildings on Main Street in Munroe Falls to a pair of structures on Marc Drive in Cuyahoga Falls sometime this year.
Kyocera SGS Precision Tools is a leading manufacturer of solid round carbide cutting tools such as end mills, drills and reamers, according to the company’s web site. The firm was purchased by Kyoto, Japan-based Kyocera Corp. in 2016.
Company officials approached Cuyahoga Falls leaders in early 2018 about relocating the employees, equipment and inventory from Munroe Falls to Cuyahoga Falls, according to Diana Colavecchio, community development director for Cuyahoga Falls. She noted that negotiations then began to establish a tax break deal. In conjunction with the planned relocation, Kyocera SGS is asking Cuyahoga Falls City Council to approve a 10-year, 75-percent enterprise zone property tax abatement agreement. Council is set to vote on the deal on Jan. 13.
Tom Haag, president and CEO of Kyocera SGS, said his company manufactures items in the Cuyahoga Falls buildings and transports them to Munroe Falls, where the products are prepared and shipped. Having all of the products in Cuyahoga Falls will help the firm reduce its logistics costs "immensely," said Haag.
"We envision, long-term, some pretty substantial growth," said Haag, who added the company is "kind of land locked [in Munroe Falls]."
He noted the relocation will mean the company’s operations will be "centrally located."
The company has manufacturing sites in Munroe Falls at 55 S. Main St. and 103 S. Main St. that are 32,000 and 20,000 square feet, respectively. The 78 full-time and six part-time employees who work in those two buildings will be relocated to structures at 220 Marc Drive and 238 Marc Drive in Cuyahoga Falls this year, according to Haag. Those employees encompass nearly $5.7 million in annual payroll. In addition, about $11.3 million in machinery and equipment will be moved to the Marc Drive sites.
The company is planning to spend $2.97 million to remodel the inside and outside of the 220 and 238 Marc Drive buildings to match the design of a third building at 150 Marc Drive. The interior of 220 Marc Drive will be redesigned to house the company’s PVD coating operation and the building at 238 Marc Drive will be a warehouse that holds $8.1 million in finished goods. A vast majority of the 84 employees from Munroe Falls will be relocated to either 220 or 238 Marc Drive, said Haag. The others will go to 180 Marc Drive, a 75,000 square foot building that the company built in 2015.
Colavecchio said Kyocera SGS is not planning to physically expand any of the Marc Drive buildings. There are currently 125 employees at the Marc Drive properties and Colavecchio said the company intends to retain all of those workers, too. Kyocera SGS recently acquired a 22,000 square foot building at 120 Marc Drive, which Haag said means his firm now owns five buildings on 23 acres on Marc Drive.
Cuyahoga Falls Mayor Don Walters called Kyocera SGS a "great, great company" that does "a lot for the community."
While noting he would ideally like to have the move happen this summer, Haag noted it’s possible it may not occur until closer to the end of the year. Once the relocation happens, Haag said the buildings at 55 S. Main St. and 103 S. Main St. will be completely vacant. He noted there are no immediate plans for those buildings’ future use. Options include using the buildings for other company divisions, or leasing or selling them. The company built the structure at 55 S. Main St. in 1987 and moved into the building at 103 S. Main St. around the year 2000.
Impact on Munroe Falls
Kyocera SGS is the second-largest employer in Munroe Falls, trailing only the school district, according to Ann DiCola, the community and economic development coordinator for Munroe Falls.
"It would be our goal to fill that vacant space … It’s unfortunate that they are leaving," said DiCola.
The company has a third building in Munroe Falls — a 12,000 square foot research and development, human resources and information technology building with about 15 employees at 54 S. Main St. — that will remain in its current location, Haag said. The company has been in this building since about 1970, but Haag noted the firm had doubled the size of the structure during the last few years.
Property tax money for schools
Kyocera SGS’ Marc Drive buildings are in the Woodridge Local School District. State law only requires the city to notify the district about the proposed tax break; the Board of Education does not have to approve the abatement. Woodridge currently receives a total of $537,872 in annual property taxes from 220 Marc Drive and 238 Marc Drive. The planned renovation of the buildings, as well as the relocated inventory and equipment, will increase the value of the properties, according to Colavecchio. This means the school district will receive more annual property tax money ($609,069) from the these two Marc Drive buildings during the 10-year abatement period. Once the abatement ends, the district will receive $822,674 in yearly property tax funds from the two structures.
Kyocera SGS has also committed to providing one or more paid internships and a $1,000 scholarship to the school district for each year of the abatement.
Council member Tim Gorbach (At Large) thanked Kyocera SGS for its "commitment" to the schools and the city.
"Having businesses like yours here, we get excited about the jobs, we get excited about the money and sometimes we get too wrapped up in that," said Gorbach. "It’s important to have companies such as yours with your type of leadership and your passion for the city …We appreciate the partnership."
Colavecchio said the county will provide $50,000 to Kyocera SGS to re-train the relocated employees on operating the newer equipment.
"It’s very much a company that cares about our community as a whole," added Bryan Herschel, executive assistant for the Summit County Executive’s Office.
Reporter Phil Keren can be reached at 330-541-9421, email@example.com, or on Twitter at @keren_phil.