The city of Springboro is planning to borrow $600,000 to assist a local business expansion through a new program unveiled last week by the Warren County Port Authority.
The money is to be part of a package of incentives offered to Victory Wholesale Group on an expansion of warehouse and distribution facilities in Springboro.
Last Wednesday, the port authority board approve issuance of investment notes to be paid off or rolled over next year by the city and securing $600,000 loaned to the city by the Warren County Treasurer’s Office.
Using the Springboro deal as a test, the port authority hopes to begin offering this assistance to other local governments lacking the ready cash to sweeten offers to prospective companies, according to Martin Russell, who heads Warren County’s port authority and economic development office.
“It gives them another option,” Russell said after the port board meeting.
Brothers Trading Co., doing business as Victory Wholesale Group, has proposed a $10 million, 255,000-square foot warehouse expansion of facilities in Springboro.
The company plans to add 50 jobs and move 77 from a facility in Monroe, rather than move the new jobs or all facilities to Monroe.
The $600,000 is a loan from the city to be forgiven if the company hits its job targets.
The company is also being forgiven 15 years of property taxes that would otherwise have gone to the Springboro school district and other local entities.
The company also was given state tax credits worth about $142,000.
The incentives are designed to help cities attract new companies or retain those, like Victory, indicating they will move unless they receive public subsidies.
“There’s a lot of competition for companies and for jobs,” Alvin Eder of Victory said earlier this year.
While Springboro seemed the best option, Eder said the company was also weighing moving out of town.
“It’s all geared on keeping them in Springboro,” City Manager Chris Thompson said.
In June, the port board approved leases and other agreements with Victory, enabling the company to save $350,000 in sales tax on construction materials.
While giving up the tax benefits, Russell said communities and the county wind up better off through income and other taxes resulting from such economic-development deals.
“There are greater tax gains,” Russell said, adding the port collects a 1-percent fee on the lease deals.
At the board meeting, Russell described the financing securing the forgivable loan to Victory as a “trial pilot program” that could be offered to other communities.
“A lot of communities would not be able to compete with communities that could offer this up,” he said at the meeting.
At the end of the year, Springboro can pay off the loan, plus 1-percent interest, or renew it.
Warren County Auditor Jim Aumann’s office was consulted and agreed to the 1-percent loan after private borrowers stopped at 3 percent and were disinterested in the short loan period, according to Russell and Andrew Brossart of William Blair, which is handling the financing.
Springboro could have secured the loan itself. Thompson acknowledged it agreed to serve as the first company to assist the port authority.
“They would like to get this program going,” Thompson said. “It certainly doesn’t hurt us.”