YOUNGSTOWN – For the first time ever, the city is offering to rebate its 2.75% income tax to a business for moving here.
City Council will vote July 27 on a “job creation grant agreement” with Steelite International, which is moving its headquarters, comprising 60-70 employees, to the Taft Technology Center in downtown Youngstown from New Castle, in Pennsylvania.
A majority of the city council said they supported the deal. The Board of Control is expected to finalize the deal.
Under the agreement, all income taxes collected from Steelite employees in 2023 would be 100% refunded to the company by March 30, 2024.
For 2024, the city would refund 75% of the income tax by March 30, 2025, with the refund reduced to 50% in the third and fourth years of the agreement, then to 25% in the fifth year. After that, there would be no refund.
The company’s payroll for employees is estimated at $5 million, so the reimbursement for the first year would be $137,500. The reimbursement increases to $103,125 in the second year, to $68,750 in the third and fourth years and to $34,375 in the fifth year, according to the agreement.
If the employees of the company earned more money, the reimbursements would be greater. The agreement states that if the payroll is less than 80% of $5 million — or $4 million — the city “may decline the grant for the corresponding year.”
John Miles, chairman and CEO of Steelite, said the employees do not have income tax in New Castle, so they would take a 2.75% pay cut with the move to Youngstown.
The company will give its employees coming to Youngstown a 2.75% raise as soon as the move is complete, which is expected in October, to offset city income tax, Miles said.
“The city helps the first year absorb 100% and we’ll absorb the rest” as the percentage goes down, he said. “It’s a tough job market. You can’t say you’re displacing people, cutting wages, and having to drive further” to get to work. Most Steelite employees affected by the move live in and around New Castle, he said.
City finance director Kyle Miasek said he and T. Sharon Woodberry, before he left as the city’s director of economic development, did some research to see what other cities were offering businesses in plus tax breaks – because Steelite didn’t want any – to encourage them to move or expand. This was determined to be the best option, he said.
“We see this as a positive step forward in attracting business to the city,” Miasek said. “We don’t have any of that tax revenue, so we don’t lose anything. Then, from the second year, we will start receiving tax revenue. This will help increase the city’s income tax base.
The city can use this tool for other businesses, Miasek said.
“We could potentially do that with other companies,” he said. “It depends on the offers. This is not a cookie cutter pattern. It is a reliable entity. We’re not going to give that to anyone. Each economic agreement is unique.
Steelite manufactures china, glassware, buffet equipment, lighting and other products for the hospitality industry including hotels, restaurants, stadiums, convention centers and cruise ships. cruise.
Steelite has its largest showroom and experience center at the Commerce Building, 201 E. Commerce St. in downtown Youngstown. He has been there since 2017.
“We look forward to contributing more to downtown and the city,” Miles said.
Steelite is also awaiting an infrastructure grant from JobsOhio, Miles said, but “I don’t see any impediments to the move.” It’s safe to say it’s a hit.
It is estimated that improvements to the Taft Technology Center will cost between $2 million and $3 million.
The company plans to maintain a presence in New Castle, where operations, distribution and light manufacturing are located. Steelite has over 100 production plants worldwide.