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TPS approves tax incentives for Chrysler

TPS-JEEP-TAXES

Chrysler Group LLC announced last week that it plans to invest at least $365 million to expand and improve its Toledo Assembly complex, where it makes the Jeep Liberty and Dodge Nitro.

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The Toledo Board of Education Tuesday night passed a tax abatement, the first part of an incentive package to entice a Chrysler expansion that could bring more than 1,100 jobs to the city.

The board voted 4-0 in favor of a 15-year, 50 percent tax abatement worth $45,000 annually; board member Jack Ford left the meeting early and did not vote.

The abatement is for a proposed $8 million expansion of Chrysler’s Toledo Assembly complex announced by plant officials last week.

Along with the expansion, Chrysler plans to invest at least $365 million in improvements at the complex, and to add a second shift with 1,105 jobs to the plant that currently builds the Jeep Liberty and Dodge Nitro.

“We are excited to have Chrysler make this investment,” board president Bob Vasquez said.

But while the board ultimately passed the abatement, it was not before several members expressed discontent with elements of the proposal and how it was presented to the board. Board members Larry Sykes and Lisa Sobecki both said that the school board and district appeared to be the last entities approached about the Chrysler deal, and that their approval of an abatement seemed “taken for granted.”

“Toledo Public Schools seems like the stepkids,” Ms. Sobecki said.

Mr. Sykes said that Chrysler once had many more employees in Toledo than it does now and will have with the proposed expansion, and that it disturbed him that Chrysler is asking the district, Toledo, and Ohio for incentives after a bailout by the federal government. He asked why the school district was being asked to pay a large corporation to bring back jobs that were previously taken from the community.

Chrysler has been negotiating with local and state officials for months on an incentive package for the expansion. The city has offered millions in tax credits and other incentives, while TPS and the Washington Local school district — where 40 percent of the proposed plant would lie — were asked to approve tax exemptions on the building expansion.

Analysts believe the investment could be the first of a number of expansions that could result in additional shifts, and an increase in production by the plant from four to seven different vehicles produced by the automaker.

Chrysler representatives have said their plans to expand in Toledo are not finalized, and city officials have emphasized that Toledo is competing against other cities for Chrysler’s investment.

The abatement approved by the Toledo school district is relatively small compared to Chrysler’s investment, because school districts only receive property taxes based on the real property value — or the $8 million building expansion — as Ohio districts no longer receive tangible personal property-tax revenue. The school district would still receive additional revenue if Chrysler expanded its plant, just less than it would without an abatement.

Despite the concerns expressed by board members, they approved their part of the package.

“I dated my wife two years before I married her,” Mr. Sykes said. “I just believe in knowing it’s the right thing.”

The Washington Local school board is scheduled to vote on their proposed tax abatement Wednesday at 6 p.m.

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com or 419-724-6086.

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