“It’s an investment in improving the property value so you are exempting the taxes for a period of time with anticipation that when that period expires you have a piece of property that’s worth a lot more than it was in the past,” said Montgomery County Auditor Karl Keith. “In the meantime, it’s a job creation tool. It’s creating new jobs. It’s added payroll. It’s added income tax to the city, which is very important to them.”
Keith chairs the Tax Incentive Review Council that approved the continuation of all agreements except those expiring.
The council reviewed incentives created by the city’s Enterprise Zones (EZ), Tax Increment Financing Districts (TIFs), and Community Reinvestment Areas (CRAs).
The city’s Enterprise Zone program offers tax savings to businesses who create jobs through investment in buildings, equipment or machinery. More than 560 jobs have been created through this program, and 801 jobs have been retained, with an investment of more than $91.8 million from businesses.
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The TIF program incentivized the same type of activity, with more than $200 million of private sector investment in these districts supporting more than 1,300 jobs. This program redirects taxes generated from property improvements to finance infrastructure enhancements in that area.
The CRA program incentivizes property improvements in targeted neighborhoods by exempting from taxation the value of those improvements. As of last year, improvements made to residential properties in the CRA program have increased the total property value of those properties by more than $85 million.
Last year, 289 residential property owners in Dayton benefited from the CRA program. All of the properties were found in compliance and none were tax delinquent, said Ford Weber, Dayton’s economic development director.
Examples of the programs include:
• Dayton’s Twin Towers neighborhood has experienced more than $6.1 million of reinvestment after being put into the CRA program.
• Norwood Medical, a manufacturer that creates surgical devices, added 361 jobs and invested more than $15.6 million in its facility since being granted an Enterprise Zone in 2010.
• GE Aviation EPISCenter at the University of Dayton was constructed after a TIF district was created. The $51 million facility is home to 193 jobs.
Dayton City Commissioner Chris Shaw said the oversight the board provides ensures the programs work as designed.
“It sounds like these are going pretty well and that’s important. It says to me these incentives work and spring development,” he said. “But we are monitoring it and making sure that everyone is doing what they are supposed to do, and they are.”
The largest investment amount on the books subject to tax exemption in a CRA program is $26 million for NP Dayton Chewy, for the company’s distribution center near the Dayton International Airport, according to a Dayton report.
Between 1983 and December, there have been 258 companies incentivized by an enterprise zone program. Just five remain in the program. When the remaining companies first made agreements with Dayton, they had 801 total jobs; by then end of last year, the number of jobs at those reached 1,369.
The reason all five businesses in enterprise zone agreements were found substantially – but not fully – compliant, is because they failed to meet a Dayton resident employment target of 50%. KBK Eight Properties, hired the highest percentage of workers from Dayton — 39%; just 6% of Emerson Climate Technologies employees lived in Dayton of a pledged 50%.
“Unless you’re in the service industry, it’s going to be very hard to get that. But everybody does try,” said Mary Faulkner, a Dayton senior economic development specialist. ““It’s not a requirement, it’s a request – a recommendation.”
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