Ravenna City Council considers TIF to finance infrastructure for LG Chem
Ravenna has proposed tax increment financing to reimburse itself for improvements the city paid for in order to make LG Chem's project happen.
Economic Development Director Dennis West presented the TIF to City Council's Community and Economic Development committee Monday. The proposed TIF would divert property tax dollars from the project, except for those earmarked for schools, to the city in order to offset the cost of the road built to serve the factories and water and sewer lines extended to the property.
Portage County has used tax increment financing previously for infrastructure related to the Maplecrest development in Brimfield. Mogadore considered a similar program to bring a housing development to the village. However, this would be the first time Ravenna has used at TIF.
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LG Chem, which is building in the Chestnut Commerce Center behind the former GE plant, previously obtained a 15-year tax abatement to fund two buildings on the site: a 148,400-square-foot "ABS compounding" building, and a 60,350-square-foot "ABS Technical Center."
The business plans to invest more than $107 million and hire at least 72 employees, with a total payroll of $4.7 million. The company now plans to open in February of 2024.
The TIF would begin in year 16, after the tax abatement ends, and continue for another 15 years. It's not clear how much funding the TIF would bring in because the property hasn't been appraised yet.
More: LG Chem breaks ground on two new Ravenna factories expected to employ at least 100
"You can't run two tax abatements together," West explained. "The city had to put roadway, sewer and water into this existing project. If we agree to a tax increment financing on the back end, it would run in years 16 through 30."
The funding from the TIF would be placed into a fund, and any money beyond the cost of the improvements would go into the city's general fund, West said.
West hopes to have the program in place by early December before the property is assessed.
However, the city would need to hold a public hearing before approving the ordinance, which could slow the approval process.
Councilman Rob Kairis said the program is beneficial because LG Chem pays the same taxes it would have paid otherwise, and the schools will not lose out on any funding. West said the Ravenna school district and Maplewood Career Center will receive a letter stating that the TIF is taking place and that their funding will remain unaffected.
In related news, the committee got an update on the move to extend power to the new factories. City Engineer Bob Finney said the project is "back to the drawing board."
The city plans to replace a water tank in the area, and Finney said the city was concerned that poles are too close to the construction zone. So, the project is being redesigned to relocate the poles.
A neighboring property owner is willing to provide an easement to make the project happen, Finney said.
Representatives of LG Chem, who were at the meeting, told the city that the delay won't affect the company because its opening date has been pushed back to February.
Reporter Diane Smith can be reached at 330-298-1139 or dsmith@recordpub.com.
This article originally appeared on Record-Courier: Ravenna considers TIF to finance infrastructure for LG Chem
