The Morning Journal (Lorain, OH)
Council approves Bendix package
The new Bendix Commercial Vehicle Systems will get a financial incentive to move its North American headquarters from Elyria to Avon.
On March 22, Avon City Council voted 6-0 to approve a 14-year, 90 percent tax abatement agreement for Bendix.
The company has begun construction of new offices and a research center on 60 acres on Chester Road north of Interstate 90.
The company has committed to creating or retaining 550 jobs as it invests $55 million in the new 205,000-square-foot building, according to the agreement.
For the term of the agreement, the city will pay Avon Local Schools 50 percent of the municipal income taxes collected from Bendix’ employees. That payment will be up to 87 percent of the total amount of property taxes the school district would have gotten without the abatement.
The incentive plan already has approval of the Avon Local Schools Board of Education. Board members Heather Mahoney, Art Goforth, Dennis Kramer, John Weigman and Tara Tatman voted for it on March 16.
“Bendix is a huge add for us in our district, both for the city and for the schools,” said Avon Schools Superintendent Mike Laub. “And the city has always done a great job of working with the schools to share revenue and to split taxes in a way that benefits them and benefits us and that’s what the agreement basically does.”
The city and Avon Schools needed to come to an agreement that allows them to share revenues appropriately, Laub said.
The school board had some closed-door executive sessions to hammer out details and structure an agreement that benefits the city and school district, Laub said.
“And what we came up with truly benefits the city and benefits the schools and quite honestly we’re excited to welcome Bendix to Avon,” Laub said.
He thanked Mayor Bryan Jensen and Avon City Council members for always considering the school district when new businesses come to town. This is another example of that, Laub said.
He acknowledged the math is complicated on the deal.
People could argue the agreement language makes it appear the district will take “less” money by not setting a fixed amount of revenue. But Bendix has an incentive to move to Avon and if the company does well — and city and school leaders expect that — the agreement could provide more money to the city and Avon Schools, Laub said.
“Basically we’re betting on Bendix doing really well,” Laub said. “The city will win, we’ll win and again, Bendix being in Avon is outstanding.”
In future years, the money would supplement the district general fund, Laub said.
Under Ohio school funding laws, school districts have limited abilities to generate revenues, Laub said.
One way is to ask voters to approve a school levy, Laub said.
Another way is to offer business incentives that generate revenue.
“And as a taxpayer myself in this community, we need to take all the money that we can to generate revenue to run our school district and try to stay off the ballot and stay in good fiscal standing, which we’ve done a really good job of doing,” Laub said. “This will be to help continue to fund our general fund to stretch our levy cycle out as far as we can.”
In February 2020, the Avon City Council Economic Development Committee voted to recommend the incentive plan to council.
At the time, Avon City Finance Director Bill Logan said the abatement works out to about $1.11 million annually over 14 years. He reported on the agreement to council, with Council President Brian Fischer and members Tammy Holtzmeier, Dennis McBride, Craig Witherspoon, Tony Moore and Scott Radcliffe adding little discussion.
The agreement is estimated to generate a city payment of $525,000 to $650,000 a year from the city, Logan said on March 22.
Laub said the district officials were no longer talking about a fixed dollar amount, because the dollar amount is based on growth.
“The great news is, it is a healthy amount of money that will certainly help us continue to do great things for kids in Avon without having to ask for that money from our taxpayers,” Laub said. “This will help, for sure.”