Possible Orange Township JEDD tax gives company second thoughts
A month after receiving zoning approval to set up a light industrial facility in Orange Township, Eve Energy North America is continuing to conduct a cost analysis to determine if the plan should be completed.
Company officials said the analysis is in response to being notified by the township that the facility, which would be in a new building at 7910 N. Central Drive, might be included in a joint economic-development district (JEDD), which would subject the business and its employees to an income tax.
A JEDD is a special-purpose territorial district created by contract between municipalities and townships, usually to levy an income tax to help fund public-infrastructure costs, the Ohio State University Extension has said. Townships do not have the authority to impose income taxes on their own.
Orange has one JEDD, the Delaware County Finance Authority website reported in March 2020, and it's set up for the Evans Farm development in partnership with Delaware County and DCFA.
Township trustee Ben Grumbles told ThisWeek the township expects in the coming months to complete another JEDD, predominantly focused on the U.S. Route 23 corridor. Any entity that seeks to utilize the overlay zoning for the Route 23 corridor also could opt into the JEDD, he said.
In contrast to the Evans Farm JEDD, Grumbles said, the new JEDD would partner with a different municipality, which he did not identify.
"Once completed, we will begin marketing the JEDD to existing businesses in hopes of adding them to the district," he said.
Township development and zoning director Robin Duffee told ThisWeek, "It is within the powers of a JEDD board to add properties to the JEDD upon a majority vote of all real property owners and businesses in the district and the area to be added to the district."
Township trustees approved the Eve Energy rezoning Dec. 7, when Eve Energy project manager Luke Gallant said that two weeks earlier, the company received a two-sentence notice from the township that its site might be included in a JEDD.
"(Eve Energy received) no other information that … we can grow together and there's benefits we could receive in return or anything. We don't know anything about that. So that would all be very welcome for us to review, as well as what benefits from the JEDD could come back to support us," Gallant said.
"Otherwise, it's kind of a deal breaker for us, that we're just paying an additional 2.5 percent (in income tax) that was unexpected. … I mean, there's plenty of other places, to be honest, around that we could move (to)."
During the Dec. 7 meeting, Grumbles described in detail how a JEDD is a valuable resource for a very large township like Orange, which otherwise is challenged in producing revenue needed for road work and other infrastructure costs.
Before the meeting closed, Gallant said Eve Energy would conduct the cost analysis.
Eve Energy general manager John Wu on Jan. 3 told ThisWeek the cost analysis is continuing. He said Eve Energy bought the property in May and its offices are in an existing building at the site.
"We think we should be 'grandfathered in' (exempted since they are working at the site before the JEDD is created). That's what we're looking for. We are a small company. We try to find some incentive for growing our company. The reason we came to (Orange Township) is because we are looking for some incentive. … That's the whole point," Wu said.
Gallant told trustees Eve Energy planned to build a new building – covering 31,200 square feet, with 22 parking spaces – for its production facility.
He said the company would use the site for a laser-welding production line, welding lithium batteries manufactured elsewhere into packs for use as energy storage. The company website, evebatteryusa.com, lists several applications where such battery packs are used.
"We're just welding the batteries into packs and then shipping them out. … There's a lot of demand for that these days in the U.S.," Gallant said.
He said the company planned to hire between 60 and 90 new employees, with expected salaries about 10% above the market average at $50,000-$60,000 for laborers and at $80,000-$100,000 for engineers.
During the Dec. 7 meeting, Grumbles said the JEDD concept was created by the Ohio Legislature, recognizing that townships with large populations face funding challenges.
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One element of a JEDD, he said, is that a portion of the money earned in the township stays in the township to help with public-infrastructure costs.
The township wants to remain financially viable in a way that doesn't continue to increase the tax burden on residents, he said.
"I don't think you're going to have to worry about the JEDD for a while. For you, personally," Grumbles told Gallant.
"Nobody here's going to force anything on your business in a way that's hostile. … We don't want to start a business relationship that way. … I think the focus up front for at least a couple of years is going to be new development and entities that opt in. … I think there'll be quite a few, understanding the importance of it and they want to stay in the township."
The Dec. 7 meeting video is at youtube.com/watch?v=ceFKmwW_KRY.
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This article originally appeared on ThisWeek: Possible Orange Township JEDD tax gives company second thoughts
