Despite Cabletron’s closure and Ironton Iron’s impending shutdown, a tax incentive program specific to those areas will remain a tool for luring industry to the city.

Thursday, January 27, 2000

Despite Cabletron’s closure and Ironton Iron’s impending shutdown, a tax incentive program specific to those areas will remain a tool for luring industry to the city.

"Enterprise zones are related to only industrial expansion and development and allow the county to come in and negotiate tax abatements," said Ralph Kline of the Ironton Lawrence County Community Action Organization, who writes grants for local governments.

Those abatements offer up to a 50 percent reduction in local property taxes in exchange for industrial improvements and job creation.

"The zones are there unless the county de-designates them or the state ends the enterprise zone program," Kline said.

Two zones have existed in Lawrence County since the late 1980s and early 1990s – one in the Hanging Rock area and one for most Ironton areas zoned industrial.

A third, in Perry Township around the former South Point Ethanol plant, was designated last year. In addition, that site has been designated a federal Empowerment Zone, which offers more tax incentives.

Cabletron and Ironton Iron had tax abatement agreements with the state and local authorities. A third application is pending in the South Point zone, according to Ohio Department of Development records.

The department lists all enterprise zones in a Resource Ohio book and on a web site – both available to interested industries.

Tax breaks in enterprise zones like the one covering the Cabletron and Ironton Iron area are not 100 percent, Kline said.

Only industrial property – not commercial or residential – will qualify for a 50 percent reduction of new property taxes on only new improvements in the qualified area, Kline said.

For example, if an industry buys a piece of property carrying a $20,000 base tax per year, then constructs improvements that increase that tax to $40,000, it will only pay half of that additional tax amount.

It’s total tax liability would be $30,000 – the $20,000 base tax plus half of the $20,000 extra.

There are certain other zone benefits the industry can negotiate with the state, but access to incentives starts at the county level, and is not automatic, Kline said.

If an industry likes what it sees in one of the areas, it must apply and meet certain criteria, then negotiate with the local zone authority, he said.

"In all cases that authority is the county’s, but the county looks upon the recommendations of the city, village or township," he said.

A Tax Abatement Review Committee, which includes school boards and other agencies, has input as well.

The county and other government agencies also can use the tax incentives offered by the zones as a negotiating tool, Kline added.

For example, Cabletron agreed to create a set number of jobs in exchange for tax abatements, according to state records.

The enterprise zone program is only one of many programs – like grants, tax breaks and workforce training dollars – offered by the state in an effort to bring more industry to Ohio’s counties, Kline said.

Also, other areas in Lawrence County can be designated enterprise zones, if local governments apply and the areas meet state qualifications, he said.

In the long run, local officials hope enterprise zones and other state programs cause new and existing industry to take advantage of tax breaks to locate a business or expand one, thereby creating jobs and a better economy, Kline said.