Tue Mar 16 2010
by Mike Lesko
Associate Editor
Stow --When a community lures a business from another town in Summit County, it hurts the entire county. So say county officials, who are trying to draw up an agreement with communities that would penalize those towns that "poach" companies from another.
"That is a means to regionalism," Connie Kraus, director of the county's department of community and economic development, told Stow Council Feb. 23.
Kraus said she hopes to have a program in place throughout the county by June.
"We want a spirit of cooperation," she said. "So we are encouraging communities to sign on."
Kraus said the following communities have passed legislation agreeing to the plan: Barberton, Macedonia, Mogadore, Munroe Falls, Reminderville, Silver Lake and Twinsburg.
Stow has not yet passed legislation.
Kraus said the agreement has two main parts.
"The first is to share payroll tax revenues for specified time periods when large employers, for any reason, relocate between communities," she said.
"The second is that communities will not 'poach' businesses from each other, and if a community does so, then it must share tax revenues with the departing community for specified time periods regardless of the size of the business," she said.
Kraus said communities are encouraged to join by an offer of increased state and federal grant fund money.
The penalty for failing to adhere to the agreement is forfeiting grant money.
Kraus said the impetus for the program was when Norandex, a manufacturing and distributor of exterior building materials, moved its office headquarters from Macedonia to Hudson in 2008.
"We're trying to reduce the number of companies moving from one community to another within Summit County," Kraus said.
"If a business moves from Hudson to Stow or from Stow to Hudson, for example, it doesn't benefit the county or regionalism," Kraus explained.
"Some villages in the county would be devastated by the loss of one company," she said. "We're more interested in attracting and expanding businesses."
Kraus said under the agreement communities that are "actively poaching" could get less state funding for infrastructure and other projects.
She said such communities would get a 5 percent reduction in "points" on their funding applications for Ohio Public Works projects.
The funding is doled out through the District 8 Integrating Committee.
The penalty would be in effect for two years, she said.
If a complaint is filed by a community that has lost a business, Kraus said the District 8 integrating committee would review the situation.
Then it would go to the county's department of community and economic development, and attorneys would be appointed to arbitrate the dispute.
Kraus said the county included in the agreement a clause that communities need to give a 180-day notice to opt out of the agreement.
Kraus said there is no comparable program elsewhere in the state, but she said officials in Portage and Stark counties are interested in pursuing one.
In Summit County, Kraus said Sagamore Hills cannot be part of the group because, as a township, it is not part of a Joint Economic Development District agreement, which gives townships the ability to impose income taxes.
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