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WARREN -- City council authorized execution of an agreement between the Trumbull County Board of Commissioners and Dawn Incorporated for tax incentives by way of a tax abatement program at its meeting Wednesday.
According to the ordinance, the city is authorizing the commissioners to grant the company a 10-year, 75% exemption for real property taxes.
"It's the property tax collected by Trumbull County," Community Development Director Michael Keys said. "Basically, all we're saying here is we have no problem with the county pursuing an abatement with this company. This is not city taxes."
The board of commissioners encouraged the development of the property, which is within the designated "enterprise zone."
The project will involve a total investment from Dawn Incorporated of between $900,000 and $1.3 million.
The project agreement says Dawn Incorporated shall purchase the approximately 8,500 square feet of warehouse at 2961 Sferra Ave. to renovate and retrofit with gas and electrical upgrades. The company already owns the adjacent property, 2861 Sferra Ave., and looks to install a new parking lot to connect the two facilities.
Keys said the construction company founded by Dawn Ochman built the first Sferra Avenue building in 2017 and underwent a separate tax incentive process.
"She's at the point now where she's running out of room," Keys said. "So what she's doing is she's buying the empty warehouse space that's just to the north of her on Sferra (Avenue)."
Keys said the empty warehouse Ochman is buying used to be a Frito-Lay warehouse.
According to the agreement, Dawn Incorporated shall create four new permanent full-time job opportunities and one permanent part-time job opportunity within 24 months of the commencement of construction of the facility.
Keys said the new jobs would be administrative and clerical positions.
The agreement said the increase in employees will result in over $1 million of additional annual payroll.
Jimmy Taylor, vice president of the Western Reserve Building Trades based in Youngstown, cautioned council to consider the incentives it was authorizing.
"As you go through the news and different tax abatements that companies are allowed, definitely everybody, I think, needs to be mindful of the incentives that they're giving to these companies," Taylor said.
Keys acknowledged the concerns of Taylor, but said the tax abatements and enterprise zone agreement can act as tools to help incentivize companies to come to and stay in Warren and Trumbull County.
"What we find is that other communities are not going to stop doing it, so we're almost in competition with other communities," Keys said. "If we say, 'we are not going to grant you these tax incentives, we feel you don't need them.' Next thing you know, they're in Mahoning County or Ashtabula."
Keys said the enterprise zone agreement will be reviewed by state officials. He said the state has the authority to deny the tax incentives.
"When (Ochman) buys that property, she has to pay the existing taxes, those don't go away," Keys said. "When she does her improvements, the county will come out and assess it and they'll say, 'now this property is more valuable,' and they will raise the taxes on that property. What we're abating is the raise, just that portion of it, 75%."
The ordinance was adopted unanimously.