Fairfield amends tax break deal for company growing slower than anticipated

A local business says changes in its industry have forced it to lower its tax break with the city.

Western States Machine Company, a supplier of centrifuges — which separate solids from liquids — that are popular in both the sugar and non-sugar industries, cited declining sugar futures and the commodity’s rising retail price as reasons why it must amend its Community Reinvestment Area agreement with Fairfield.

"When Western States moved to Fairfield, at that time it anticipated adding 91 jobs during the subsequent three-year period," said Fairfield City Manager Mark Wendling. "They have been unable to meet their goals and objectives."

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The Butler County Tax Incentive Review Council recommended revising the agreement by removing one year and 10 percent. The new agreement will be a 7-year, 65 percent tax incentive based on the actual number of jobs brought to the city of Fairfield.

Wendling said the company “anticipates steady growth” in 2019 with several new clients and entering into new industries. Western States President & CEO Bob Sinnard could not be reached for comment.

Fairfield Economic Development Manager Alex Kraemer said based on his conversations with the company there are other opportunities in new industries and markets, like the medical marijuana sector, for the company to pursue.

“Overall, they’re excited about (the opportunities),” Kraemer said. “Yeah, they’re not where they’d thought they’d be but there are some good opportunities for them.”

He said company officials are looking to hire.

The company was to bring its total employees to 91, but they began not meeting thresholds of the CRA in 2017. The Butler County Tax Incentive Review Council, which reviews the city’s tax incentive agreements per state statute, issued a warning letter last year and took action this year.

Kraemer said the company’s employee base is in the mid-50s.

Western States, which was founded in Utah in 1917, moved to Hamilton in 1925 but moved to Fairfield as it was growing. The company began its move to 625 Commerce Center Drive in late 2013. It built a new $65 million, near-80,000-square-foot facility on Commerce Center Drive.

Prices for sugar hit a 10-year low mark this summer, but futures in the commodity have been on the rise as 2018 winds down. Fairfield Chamber of Commerce President and CEO Kert Radel notes Western States is growing, just not at the pace it anticipated. He expects a rebound, just as company officials told the city of Fairfield.

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“They’ve shown growth since they’ve been here in Fairfield and it’s just at a particular bump in the road at this point, but it’s been all positive in them moving here over to Fairfield,” he said. “What goes down will come up again, it’s just this particular market’s been hit, and in time it will change.”

In his decade leading the Fairfield chamber, he said he’s seen companies lose employees and six months later need to hire more than they had to let go. While Western States Machine has not grown as much as it anticipated in its time in Fairfield, Radel said the company would be OK.

“It’s a great company that we have here in Fairfield,” he said. “We’re happy that they’re here, and I’m sure there will be future growth down the road.”

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