State agency granted AMG 30-year abatement on $300M facility in 2019

Editor's note: This story previously misstated bonds issued to AMG were interest-free. Officials also had a public hearing option.

ZANESVILLE — AMG Vanadium sought a route to nearly eliminate property taxes on most of its $300 million Washington Township property in 2019, according to county officials who were left out of the state-run process.

AMG Vanadium, a solid waste recycling company that opened a location in Eastpointe Business Park last summer, received a 100%, 30-year tax abatement from a state bond-issuing agency — the Ohio Air Quality Development Authority (OAQDA) — aimed at promoting environmentally friendly private industry.

That agreement applied to a vast majority of its property, in exception to two portions on the west and northern ends. It also facilitated getting the company bonds to build the facility.

But AMG went even further, Tri-Valley Superintendent Mark Neal said. At the local level, the company last summer requested a property reassessment on three parcels of land, citing brownfield evidence.

One of those parcels covers an area that OAQDA did not make tax exempt, a map provided by the state agency and auditor's records show. The Board of Revisions approved a valuation reduction of $22,500 an acre to $3,500 an acre on all three parcels.

Tri-Valley is appealing that to the state Board of Tax Appeals in July. It brought school property tax revenue to a bare minimum, Neal said.

"The burden will ultimately fall on the rest of the taxpayers," Neal said.

But what's more frustrating to both Tri-Valley and other local officials is a a state agency's decision to offer a tax abatement on most of the AMG property three years ago, one that local officials did not have an opportunity to approve.

AMG sought tax incentives, reduced land value

OAQDA authority supersedes the county's, the agency confirmed. County elected officials did not have an opportunity approve it legislatively, unlike a locally offered tax abatement from a port authority entity, though there was a public hearing..

Local officials have long-promoted AMG's choice to locate within the county. It is creating 100 jobs in a $300 million total investment.

Still, county officials had no say in the state agency's move to offer tax incentives. And according to Auditor Debra Nye, they didn't know the extent of the deal until her office issued its first tax lien more than a year later.

"We did our due diligence," she said. "We didn't leave any stone unturned."

OAQDA is a state agency that promotes environmentally friendly industry. It is primarily a bond-issuing agency, but offers property tax exemptions as a secondary function. As a company that provides solid waste disposal, AMG qualified for OAQDA's program. It's comprised of a seven-person board, five of whom are appointed by the governor and approved by a majority state senate vote.

OAQDA sends county auditors certificates notifying them of the changes. Nye received a letter from OAQDA in July 2019 outlining what would happen. Officials said they were blindsided later when they learned land would not be taxable.

Typically, land is still taxable in the county, even if buildings are not.

"That wasn't the case here," Nye said.

There is no record of OAQDA authorizing such a deal in Muskingum County, Nye said.

The agency's authority supersedes the powers of the county. OAQDA agreements hinge an Ohio Revised Code statute that gives the agency authority to issue those tax exemptions on a local level, without requiring local government approval, the agency confirmed.

The Ohio Attorney General declined to review the case, Nye said.

Muskingum County officials tried to offer a similar deal through the Zanesville-Muskingum County Port Authority, one that could actually be approved by elected officials at the local level — county commissioners, township trustees and the impacted school district's board of education. AMG never accepted that deal, Port Authority Director Matt Abbott said.

Commissioner Mollie Crooks said it was all done without the county's knowledge, but she still sees AMG's presence as a benefit to the community.

“I think sometimes we have to look at the bigger picture of what’s possible," she said of the job creation. "We hope they can be a good community partner. I would hope to see that same partnership developed here in other ways, supporting schools, supporting nonprofits, supporting just in general in the community."

OAQDA stands by its board's decision. It maintains that getting companies to locate in Ohio is good for education.

"I think we can both have strong schools and a strong economy, and the Zanesville community will be better off for it," OAQDA Executive Director Christina O'Keeffe said.

Tri-Valley revenue loss

County officials don't have any say in such state-issued agreements, in spite of those agreements being directly related to local tax revenue. In fact, local bodies did not have an opportunity to approve the decision through formal legislation because Ohio Revised Code gives OAQDA authority that doesn't include local decision making.

The county did offer AMG an enterprise zone agreement, which proposed to give it a 10-year, 100% real property abatement. That would have to be approved by the board of commissioners, the school district in which it the property is located, and township trustees.

The offer included an addendum: payment in lieu of taxes. Instead of paying tax revenue directly to the school, the company is encouraged to negotiate with the impacted local district to make up for revenue loss. For example, Halliburton agreed to build a new locker room for Tri-Valley in lieu of taxes.

Tri-Valley is appealing the Muskingum County Board of Revisions approval of a reduction in property tax revenue for three parcels of land.

The BOR stands by its decision to reassess those properties lower than they were before, said Nye, who is one of three members, along with Commissioner Mollie Crooks and Treasurer Todd Hixon.

Neal said the district isn't ruling out putting a tax levy on the ballot to make up the extra dollars lost. The district has not had one since the 1980s.

AMG Vanadium issued the following statement to the Times Recorder:

"As we searched globally for a location for our second AMG Vanadium facility, we kept coming back to Ohio and specifically southeastern Ohio, a region we’ve called home for 70 years. We are thrilled to have the opportunity to continue our investment in the region through our new $300M Zanesville Plant that is bringing 100 new well-paying jobs to the area and thousands of construction jobs.

"The support we have received from civic and governmental leaders at the local, state, and federal levels has been phenomenal. Ohio Air Quality Development Authority has been an integral part of that support, as they created access to bond markets to secure capital for our project. Additionally, the local community provided access to the land at EastPointe that was previously undeveloped and tax exempt. Our investment will indeed result in a positive impact on the community and school district through taxation on the land parcels that are not exempt and through the multitude of ancillary benefits that 100 new jobs bring to a community."

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This article originally appeared on Zanesville Times Recorder: State agency granted AMG 30-year abatement on $300M facility