More jobs coming to West Chester, but no income tax

Work on Trade Center nearly complete.

The West Chester Trade Center is about to be complete with the construction of two new buildings valued at $54 million that will bring in about $1.1 million in new property taxes and about 200 new jobs.

The Butler County Port Authority board this week approved a deal which will save developer NorthPoint an estimated $1.24 million in sales tax on building materials for Buildings 10 and 11 and help with $40 million in bonds. Matt Gaston with NorthPoint estimated the total capital investment in the business center at Union Centre Boulevard and Ohio 747 will be $54 million.

“This is purely speculative at this point, there are no tenants at the moment, but based on the activity we think there is still great demand and we look forward to expanding the industrial inventory in the market,” Gaston said. “Right now there are about 1,100 jobs located in the first seven buildings and expecting that to increase by about 200 more jobs with buildings 8 and 9 and we expect a similar increase with these two buildings.”

Under Ohio law, port authorities can own, finance, construct and lease real estate including land, buildings and equipment. A port authority that buys or owns property for an expanding business, construction materials and other construction costs are tax-exempt. Also, ports can issue taxable and tax-exempt bonds, offering borrowers longer-term, fixed-rate financing than the terms of a commercial loan.

The Port will receive a $186,477 fee for its services. The once cash-strapped agency has built up a nest egg of nearly $3.4 million.

The Port Authority helped NorthPoint a year ago with a sales tax exemption and bond sale for buildings 8 and 9, a $36 million investment. Those are under construction now and nearly 85% leased “we’re almost fully leased before construction is completed.”

He was asked what the average income is at the Trade Center but he said an estimate would be skewed because employees at General Electric earn on average $100,000-plus annually.

Explore$28 million deal helping major West Chester Trade Center expansion

Townships generally do not collect income tax unless they have established a joint economic development district (JEDD) with a municipality. West Chester Twp. has a JEDD on the GE Aviation site at Cincinnati Dayton Road and Union Centre Boulevard that collected $1.6 million last year and $2 million in 2020, but there isn’t one for the Trade Center.

“We at the county don’t put JEDDs on so for the township it might have been a missed opportunity for this,” Butler County Development Director David Fehr said. “That was their call.”

West Chester Twp. Trustee Mark Welch said they haven’t pursued JEDDs more often because they believe not having an income tax incentivizes developers to come to the township.

“We like to think the fact that we don’t have an earnings tax is a benefit to us, it’s kind of our secret weapon,” Welch said. “We have just had the philosophy that to encourage new business growth that a JEDD might stymie that.”

Welch said he believes that is why the township has done so well attracting new businesses. He said they are however considering putting a JEDD in place for the $265 million mixed-use Dillin Corp. development east of Interstate 75. He said in his discussions with developer Larry Dillin he is amenable to it.

“He said for the big guys it doesn’t make any difference but the kind of projects we put in they are so desirable that people say well I’m willing to pay a JEDD to be in this great mixed multi-use, upscale area,” Welch said. “He said he didn’t see anything wrong with it.”

The preliminary plans call for retail, restaurants, entertainment, a hotel, corporate offices, 870 multi-family residential and a public park and trail system on 99 acres that run along the east fork of the Mill Creek. The trustees already approved forming a $19.2 million TIF to help pay for infrastructure. At this point Finance Director Ken Keim said a JEDD might not be needed.

“It’s possible, if things get to be really big and they need more infrastructure to enable the really big idea then that is a tool that we’ve looked at,” Keim said. “But the project as it stands now does not go that far, so we would not need the JEDD, there’s always this could happen.”

Liberty Twp. has a JEDD around Liberty Center that collected $2.4 million in revenues for the township last year. People who work at Liberty Center and live in cities were already paying income tax to those entities but because of the JEDD the tax comes to the township.

“The best example is let’s say 80% of all employees at Liberty Center already lived in a city, a JEDD would make perfect sense for us because only 20% of the people would be effected, but we’d be getting 100% of the revenues,” Trustee Tom Farrell said.

He said they are also exploring establishing a JEDD for the proposed Millikin Road interchange at Interstate 75, but “raising taxes is not an option we like to use.”

“A lot goes into the thought process, what are your other options for financing, it is a tax like any other tax so it can’t be taken lightly,” Farrell said. “You have analyze it, you have to look at all the data, you to have to decide what’s best not only for the residents and the workers in that area but the township, you have to look at all those factors.”

He said a good example of when to institute a JEDD would be if 80% of all employees at Liberty Center already lived in a city and paid income tax to that entity would then pay Liberty only 20% who live in the township would be effected because of a new income tax.

About the Author