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Published: 3/31/2005

2 cities to share taxes from coke plant

BY CHRISTOPHER D. KIRKPATRICK
BLADE STAFF WRITER

Toledo and Oregon last night agreed to share equally tax dollars generated by a planned $350 million coke plant that was at the center of a boundary dispute.

The agreement, which also calls for setting up a final border to be approved by the respective city councils, would last 40 years with an option for another 40 years. The time limit had been a sticking point for Oregon, which wanted the deal to last forever.

Oregon Mayor Marge Brown said she relented for the sake of area workers. "That's the No. 1 thing. It's going to help those who don't have jobs - the construction trade. It's for the people," she said.

Mayor Jack Ford said both sides gave in a little.

"It's a big step toward regional cooperation," he said. "Both sides are going to have an influx of dollars into budgets."

Federal tax credits also were at stake in the boundary dispute. As a Toledo project, the U.S. Coking Group would be eligible for an estimated $30 million-plus from the federal government.

Despite the agreement, the project still must clear environmental permitting hurdles related to how much mercury the factory would be allowed to discharge.

The contentiousness between Toledo and Oregon began three weeks ago when Toledo laid claim to the 51 1/2-acre factory site, saying Duck Creek, Oregon's traditional border with Toledo, was moved artificially by engineers over the years, improperly chopping off 500 feet of Toledo land.

Oregon officials have been wooing U.S. Coking for the last three years. They believed the project, which would provide 200 jobs, was theirs.

The actual amount of revenue to be shared by the two municipalities through what is called a joint economic development zone is in the millions of dollars.

The border dispute has taken twists with emotions heated recently over the revelation that several outside agencies knew in 2003 that the Toledo-Oregon border could be in question and could result in a shift of the project to Toledo.

The outside agencies, including the Toledo-Lucas County Port Authority, which owns the land, neglected to inform Toledo or Oregon, the respective mayors have said.

The border has been in dispute as far back as 1964, but was revived in late 2003 due to a port authority-ordered study of the area.

It concluded that the 51 1/2 acres, also known as the "Bug Bowl" because of its former use as a parking area for new Volkswagen Beetles unloaded from ships, might belong to the city of Toledo.

"We are now being told that all these people were working on this, and they didn't even tell the two entities that would be affected," Ms. Brown said.

Mr. Ford, in an interview yesterday before the agreement was reached, said: "I don't know why that [engineering report] was kept secret. But usually when things are kept secret, there's some interest being protected.

"I have met monthly with port authority leadership, and I thought they would have said, 'Oh, by the way, the Bug Bowl is in Toledo,' but they never said a word.... The public interest is always best handled when all the cards are on the table," Mr. Ford added.

When the port authority-ordered study was completed, four people - Lucas County Auditor Larry Kaczala; U.S. Coking Group representative Jeff Links; G. Ray Medlin, a private citizen who nine months earlier resigned from the port authority board, and Ed Schulte, senior vice president of development for the Regional Growth Partnership - met at Mr. Medlin's house to discuss the matter, according to a port authority document.

Brian Schwartz, spokesman for the port authority, said the engineering report was not kept a secret and that Mr. Kaczala's office was informed. Mr. Kaczala said he believed Toledo knew about the boundary issue.

The project site, at one point, was fully inside Oregon, and so the border dispute was moot, Mr. Schwartz said. But it was moved to the Bug Bowl.

"We turned [the engineering report] over to the [county] auditor. It wasn't like some dirty secret we found out about and we said, 'Let's hold this back.' It was a historical dispute," he said.

Jerry German, deputy director of the county auditor's real estate division, said his office believed the port authority would inform Toledo and Oregon. His office drew up a "pending border" change in May.

"All I can say is, personally, we did not have any contact with the city [of Toledo] or the city of Oregon. We talked to the port authority, which we thought was the lead agency on the project," he said

Contact Christopher D. Kirkpatrick

at: ckirkpatrick@theblade.com

or 419-724-6077.



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