City will prorate Oakley's tax credit

4/9/2008

Jeep parts supplier Oakley Industries Sub Assembly Division Inc., whose Northwood facility opened in 2006 with the promise of creating and maintaining local jobs in exchange for a tax abatement, hasn't completely lived up to its end of the bargain, Northwood officials say.

As a result, city officials decided to keep some of the local taxpayers' money.

"That keeps the city whole, and that is what the company has agreed to have as a payroll," City Administrator Pat Bacon said.

Oakley Industries took advantage in 2005 of Northwood's job creation and retention program, which was started to provide an incentive for businesses to locate in the city.

"They moved in and said they would maintain 55 full-time permanent employees each year for four years at a minimum gross payroll of $1.83 million," Ms. Bacon said.

"For committing to that, the city would give them 50 percent of the 1.5 percent income tax back on that payroll for those jobs to do with what they pleased," she said.

Although the company did maintain 55 jobs, their payroll was approximately $1.5 million, about $330,000 less than the grant criteria.

City Council discussed the issue during a recent Committee of the Whole meeting and decided to prorate the company's tax credit.

"The grant payment would be decreased proportionally," Ms. Bacon said. "We base the grant on what they provide us."

Although Oakley Industries officials did not return calls for comment, Ms. Bacon said they are aware of the situation.

"I called the representative from Oakley and told him the situation and he thought that was fair," she said. [Their tax credit check] will be mailed out this month."

Oakley Industries sells parts to Jeep, and Northwood officials theorize the Chrysler's labor issues in Toledo affected Oakley Industries payroll as well.

"Even during the Jeep layoffs, the Oakley company has still maintained the jobs they said they were going to maintain when they came to Northwood," Councilman Connie Hughes said.

Ms. Hughes said she doesn't think the city's action will discourage business from investing in Northwood.

"I wouldn't think so," she said. "This should encourage them because we're trying to work with [Oakley Industries]."