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The Toledo-Lucas County Port Authority has approved its share of the multimillion dollar taxpayer-funded incentive package to keep Fortune 500 company Owens Corning and its 1,250 workers from fleeing Toledo.
The port board Thursday approved up to $8 million in bonds for improvements to the firm’s waterfront downtown building and a long-term lease extension. That will be added to the pot of money that is also funded by the city of Toledo. Toledo City Council’s economic development committee reviewed the city’s share of the incentive package Thursday. The Bell administration estimated the value of the city’s share at $7 million.
“Owens Corning is a cornerstone of northwest Ohio,” said Paul Toth, port authority president and chief executive. “The $8 million would be a 15-year bond. It would be for refinancing some existing debt as well as providing up to $5 million in improvements for the facility and the site.”
The money will be issued through the Northwest Ohio Bond Fund and funded by the company’s lease payments on its building to the port, which owns the structure, Mr. Toth said.
“We got authorization for up to $8 million,” he said. “There is an existing bond that will expire in 2015 and it will be paid off, but there is a balloon payment in 2015 of $1.5 million, which Owens Corning will have to make. What we are doing with this bond is we are paying those existing bonds off so it’s about $2.5 million of those existing bonds, which is the current balance and all the existing interest.”
The proposal before Toledo City Council would extend a tax-increment financing structure for an additional eight years. The current financing structure with the city expires in 2016. The amended tax-increment financing structure will expire in 2024, if approved as negotiated between the Bell administration and the company.
The extension includes provisions for Owens Corning, a building materials manufacturer, to make annual payments of $363,355 in lieu of taxes to Toledo Public Schools for an eight-year total of $2.9 million, according to a report from city attorney Eileen Granata. Additionally, TPS will receive $69,356 in tax revenue from the land. Bell administration officials previously said the school system would get about $450,000 annually.
Port board member Pete Culp said that figure seemed too low.
“I think it is good to keep them here and [tax-increment financing] is a fantastic tool, but you have to limit the years, not extend them,” Mr. Culp said. “Why didn't they give $1 million to the [Toledo] Board of Education?”
Also under the city's portion of the deal, Owens Corning will get the land where its headquarters sits, contingent upon the company remaining at the site until 2030. Under the original incentive package for the building — which kept OC from moving out of Toledo two decades ago when it left its former site at the Fiberglas Tower — it would get that land in 2075. The city also must repave Owens Corning Parkway, the public street in front of the building, in 2015 with funding help from the state. Deputy Mayor Steve Herwat said that would cost $670,000.
The company has agreed to add 50 jobs downtown within three years.
In 1994, Owens Corning received a $90 million package in exchange for staying in Toledo. About two-thirds of that deal took the form of a loan. The Toledo-Lucas County Port Authority, which arranged original financing for the 400,000-square-foot, $100 million waterfront building, agreed in 2003 to forgo about $18 million in lease payments and fees. In all, Owens Corning saved about $65 million under that agreement in 2003.
The port authority Thursday also voted to borrow another $2.5 million to build — on speculation — a warehouse at the former Jeep assembly plant facility reincarnated as Overland Industrial Park. That loan will come from JobsOhio, a semi-public state agency funded in part with $100 million a year in bond proceeds from state liquor sales profits. Last month, the port approved $3 million in bonds toward the project. The vacant 110-acre former Jeep property in central Toledo near the I-475 and I-75 split was taken over by the port authority and is being cleaned and redeveloped.
“The action today was the final action to allow us to start vertical construction for a class-A industrial spec building, which we are sorely in need of in northwest Ohio,” Mr. Toth said. “We see bigger markets like Columbus and Indianapolis that have large developers that come in and build these and attract jobs and manufacturers and distribution to their communities and we feel we are behind the eight ball.”
Mr. Toth said there is a good possibility that a user will contract for the 100,000-square-foot structure soon and it will be completed to suit the end user. Construction is to begin in the spring.