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Tax abatement helps bring company to Chardon
(by Joseph Koziol Jr. - November 12, 2008)
Tax abatement helps bring company to Chardon
By JOSEPH KOZIOL JR.
Chardon City Council's finance committee agreed last week to offer a company moving from Mentor to Chardon the maximum amount of property-tax abatement. The committee voted unanimously to provide GBGI Inc. and GBSA Inc. with a 100 percent, 12-year abatement for a new building at 125 Parker Court.
Randal Sharpe, assistant to the city manager, estimated that the abatements would cost the city approximately $35,000 a year in lost property taxes. The Chardon School District, which shares in property taxes, has voiced no opposition to the company's plans, he said.
The company will provide benefits, including 28 new jobs in the city, he said. The company invested $1.7 million in improvements with its new building, Mr. Sharpe said.
Company President Peter T. Casamento said it would be relocating 23 workers from its Mentor operations and add five new positions at the Chardon plant.
Mr. Sharpe said the company comes with a $743,000 payroll, which will add about $14,841 in income taxes to the city's rolls. He said the city also will collect on inventory taxes.
Mr. Casamento said the company now leases three locations for storage of materials in Mentor and would relocate those inventories to Chardon.
He said GBGI produces products for agriculture, while GBSA deals in electronic motors used in appliances.
"We continue to grow our business despite the economy," Mr. Casamento said.
In a letter to city officials, Mr. Casamento explained his company's reasoning for moving to Chardon.
EGC, a sister company, moved to Chardon from Mentor about 10 years ago. It is located at 140 Parker Court, across the street from the new building. It manufactures products for the fluid sealing industry, the industrial and commercial heating markets and the wind-energy market.
"The two sister companies of EGC (GBGI and GBSA) have traditionally shared many of our resources, including quality, inventory and production management on occasion," Mr. Casamento said. "Much of the executive decision-making originates from 140 Park Court, as does the bookkeeping and accounting functions. It should be noted that EGC is also a supplier to GBGI for some machining operations on the products that GBGI finishes and sells to the agricultural industry," he said.
"GBGI and GBSA are presently located in Mentor. There is a significant amount of travel that takes place back and forth to Chardon every day. This travel involves both personnel and supplies. Fuel prices were definitely a factor in the decision to move them closer to the parent company. The resource sharing, decision-making and overall daily operations will be much more efficient with the operation across the street, as opposed to 25 minutes away."
Mr. Casamento said he anticipates to grow with the more centralized location for all its companies. "The new facility for GBGI will give them additional space to improve their manufacturing flow and set up new manufacturing cells, thereby increasing production capacity. This will enable them to pursue new business, which today is beyond their capacity," he said.
He said the company has grown 35 percent to 40 percent over the last three years.
Mr. Casamento said he anticipates beginning operations in the new plant by Dec. 6.
Councilman Philip King said the company's commitment to the Chardon community is "great." He said companies tend to seek abatements before locating in a community, but this company will add to its Chardon operations to become more competitive.
Mr. Sharpe said the city established its community reinvestment area in 1977 to aid in attracting new businesses. They primarily are located in the industrial areas to the north and west and around Chardon Square. In 1983, council established limits for abatements, he said.
Investments in existing buildings were provided abatements of up to three years in one- and two-family dwellings and eight years for commercial and industrial buildings. For new construction, two-year maximum limits were established for residential and 12-year limits for commercial and industrial.
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