Warning that neighboring cities are luring employers out of downtown Toledo, the city's head of economic development urged city council to act quickly on a program to award grants to companies that retain or create jobs downtown.
Steven Seaton, director of development, told council's economic development committee that the so-called cash-for-jobs program is used by other cities, including Maumee, and Toledo needs the same incentive. The program would pay companies the equivalent of one-third of the amount of the payroll taxes paid by its employees, up to a maximum of $75,000 a year for 10 years.
Mr. Seaton said one downtown employer is weighing a move to Arrowhead Park in Maumee, and passage of the Downtown Employment Incentive Program may keep it downtown. He would not identify the employer. “We have an alarming vacancy rate in the downtown. I have been repeatedly challenged to match the incentives some other cities are offering,” Mr. Seaton said. “We need to put in our arsenal the same tools that other municipalities are using, quite frankly, to raid downtown.
“It's undeniable that we've had a drain of corporations that have left our city and gone to places like Arrowhead Park,” Mr. Seaton said.
The city has a 28 percent vacancy rate in downtown office buildings.
Councilman Wade Kapszukiewicz, who chairs the committee and is the sponsor of the ordinance, promised to try to bring it up for a vote Aug. 14 at council's next regularly scheduled meeting.
The incentives would be available to nonretail companies that locate downtown with at least five employees. The grants would range from $750 a year for a company with a $100,000 payroll up to $75,000 a year for a $10 million payroll. The grants would last from two years for a company with five new employees to 10 years for a company with 76 or more employees.
Several council members requested more details about how the plan would work, especially criteria for awarding grants to existing companies claiming to retain jobs.
Council President Peter Ujvagi said he supports the concept but objected to the administration's request to be able to award the grants without council approval.
Mr. Seaton suggested as a compromise that the mayor's office be allowed to award grants to companies relocating from outside the city while awards to companies already in the city would be subject to council approval.
Councilman Gene Zmuda said the program was an admission that the city's payroll income tax of 2.25 percent is a barrier to companies' locating in the city. He requested a detailed analysis of the downtown's problems in attracting new employment.
Mr. Zmuda asked whether rewarding an employer to move from, for example, the Westgate area to downtown was good policy.
Mr. Seaton said the vacated Westgate space would be more easily filled and the result would be two employers in the city instead of one.
The plan was proposed in June by Mayor Jack Ford and Mr. Kapszukiewicz.
Arrowhead, opened in the 1980s, has 18,000 to 20,000 workers compared to 12,000 to 15,000 in downtown Toledo.
Maumee helped attract some of those workers with a cash-incentive program that gives a company up to $20,000 a year for a maximum of 10 years, depending on the number of employees added and the size of its payroll.