Tuesday, April 19, 2016

Failed Tax Abatements Had No Impact on Business Development in North Canton

Prepared Comments Made to
April 18, 2016  

The number of tax abatements to businesses that have been approved by North Canton City Council over the years but that ultimately were found to be unworkable, resulting in NO abatement of taxes, yet led to relocation or expansion in North Canton, should be cause for concern.  

Members of City Council should be asking themselves, “Were these abatements really necessary?” 

The oft-repeated argument in support of the abatement of taxes each and every time a request is made is that the business would relocate or expand elsewhere if the abatement were not provided.  

A memorable quote made by Mona Lisa Vito in the movie, My Cousin Vinny, seems appropriate here when she says, “Well, that plans moot.” Arguing that a business will relocate or expand elsewhere if a tax abatement is not given is unfounded. In other words, “That argument is moot!” 

Specific abatements, authorized by City Council, that proved unworkable and yet the businesses relocated or expanded in North Canton are the following:  

In 2006, legislation was before City Council for an abatement of taxes for Dr. Suglio. Despite the fact that I made Council aware of issues regarding this abatement, Council nonetheless approved the abatement only to pass additional legislation a month later rescinding the abatement. Dr. Suglio continued his investment on Main Street without an abatement of property taxes and later opened up his Gourmet Coffee Shop.  

Link to the January 9, 2006 remarks to City Council regarding the Suglio abatement is below:  


In 2007, there were discussions to approve an abatement of taxes for the construction of a Sherwin-Williams Paint Store on Applegrove. When I asked why a $28 billion a year company needed a tax abatement, this abatement was quashed before legislation came up for a vote. As we all know, there is a Sherwin-Williams Paint Store on Applegrove today, and amazingly, it did not require the loss of scarce tax dollars needed by the North Canton City Schools, the North Canton City Library, the Stark County Park District, or the City of North Canton. 

Link to the May 14, 2007 remarks to City Council regarding the Sherwin-Williams tax abatement is below: 


In 2009, following approval of a liquor option by voters, the Fred W. Albrecht Grocery Company announced that they were embarking on an expansion of the store’s Liquor Department as well as a remodel of the entire Acme Fresh Market Store on North Main Street.  

Link to the April 13, 2009 remarks to City Council regarding the Acme abatement is below:  


Amazingly, AFTER the announced expansion, North Canton’s Director of Economic Development, Eric Bowles, contacted Acme Fresh Market and offered a tax abatement.  


And more astonishingly, this Council body approved the abatement with passage of Ordinance No. 33-09.  

Again, I ask, WHY? 

The Acme Fresh Market Store had been an anchor store for twenty-years in North Canton and their announcement to expand and remodel indicated their intention to remain in the City.  

This was not a prudent decision on the part of Mr. Bowles at that time. The recommendation from Mr. Bowles that Council should now expand the City’s CRA Program is equally ill-advised.  

In my recent conversations with the Stark County Auditor’s office, I have learned that the Fred W. Albrecht Grocery Company never actually received any abatement of property taxes as the store improvements never raised the appraised valuation of the property, yet the business has remained in North Canton. 

In 2011, City Council gave an Industrial and Commercial Occupancy grant to Ben Suarez for what was called Project Omega under Ordinance 53-11. The Suarez Corporation never met any of the requirements to qualify for any rebate of taxes.  

Link to the May 23, 2011 remarks to City Council regarding the grant to The Suarez Corp. 


In 2012, City Council approved an Industrial and Commercial Retention Grant for Crowl, Montgomery & Clark with the passage of Ordinance No. 68-12. This is a digital marketing firm that had operated out of office space on North Main Street for two decades and decided to relocate its offices to an old Victorian house on South Main Street.  

I am not sure how a digital marketing company fits the requirements of an Industrial and Commercial Grant and that may be why the business never executed a grant agreement. Crowl, Montgomery & Clark ultimately never received any tax dollars, yet they remained in North Canton. 

There is no one who could say that North Canton City Council doesn’t try hard to give away tax dollars needed by the North Canton City Schools, the Library, the Stark County Park District, or just the City of North Canton. The past history of the failed abatements seems to underscore that the abatements were not critical to the businesses as they are a part of our community despite NOT receiving the abatement. 

A summary of the Ohio Community Reinvestment Area Program states, “Ohio’s CRA Program was created to promote the revitalization of areas where investment has been discouraged….” 

Creation of CRAs in the City is not needed and declaring that any area of North Canton discourages investment is wholly untrue. Banks are still lending to creditworthy applicants who want to build or refurbish structures throughout the City of North Canton. 

In the future, voters will find it difficult to approve levies, school or not, knowing that City Council is handing out tax dollars to millionaires, corporations, and businesses that need no encouragement to stay and grow in North Canton. 

Thank you,
Chuck Osborne
City of North Canton

Tuesday, April 12, 2016

North Canton CRA Tax Abatements Raise Serious Practical and Moral Questions for Taxpayers and Our Local School District

Prepared Comments Made to
April 11, 2016 

It is pretty well accepted in case law that the courts will rarely meddle in the legislative actions and decisions made by elected bodies of city governments as there is the presumption that representative governments are acting on behalf of their constituency. 

In 2005, while in the midst of a major renovation to our home, my wife and I became aware of legislation working its way through City Council modifying or expanding an existing program called a Community Reinvestment Area (CRA). The program provided an abatement of taxes on the increased valuation of the property resulting from improvements to existing housing stock in the City. 

Mindful that $150,000 in improvements to our home was a substantial investment and that we were indeed making improvements to the City’s existing housing stock, my wife and I enrolled in City’s CRA program. The program, first implemented in 1999, was a legislative action of our elected representatives.  

Who were we to question the legislative actions of North Canton City Council? 

Does anyone on City Council believe the program has served our Community in a positive manner over the seventeen years the CRA program has existed in North Canton? 

And now this Council wants to expand the CRA and make it a City-wide program.  

I do not believe this program is serving the City and has not since its inception. 

 Was my home blighted and deserving of a tax abatement for after all, that was the purpose of the program? 

NO, it was NOT blighted.  

Did my wife and I need a financial incentive to improve our property eleven years ago? Again, the answer is NO! 

There are seven other participants currently receiving tax abatements in the City’s CRA program and I can say without hesitation that they also did not need a financial incentive for the investments they made in their properties.  

Six of the properties receiving tax abatements are corporations.  

Five of the eight properties receiving tax abatement are for new construction. 

Two of the property owners receiving tax abatements are well-known individuals who are multi-millionaires in our community.  

North Canton’s CRA program is nothing but a tax giveaway pure and simple. The taxes that you are abating are revenue desperately needed by the North Canton City School District. 

On Sunday, April 3, 2016, the Repository ran a front page story titled “REBUILDING THE VIKINGS’ COFFERS.” This story is a prelude to what is looming for the North Canton City Schools. 

The abatement of property taxes for improvements, at most, should be limited to existing housing structures as was the original purpose of the program.  

And with only two homeowners in seventeen years utilizing the program to improve existing housing, with neither owner needing an incentive to do so, it is quite obvious that the entire program is an utter failure.  

In the spread sheet that I have passed around, I have tallied up the costs of the abatement to the City and the School District. For 2015, there has been a loss of nearly $100,000 in tax collections; two- thirds of that total would have gone to the schools.  

A tally of the forgone taxes over the full term of each of the eight abatements totals $1,346,345. This loss will rise as property valuations increase over the years. 

The CRA is nothing more than a tax dodge that has predominately benefited corporate interests and millionaires, all to the detriment of the North Canton City School District. 

Lastly, I want to call to your attention the abatement of taxes for the construction of a 40-unit apartment complex, called North Ridge Place, LTD at 1303 N. Main St. 

This abatement is immoral and possibly illegal. It is also unfair to the taxpayers of North Canton. It is highly detrimental to the North Canton City Schools, and backlash on this abatement could very well lead to the defeat of the next school levy. 

I have looked for a record of any Council action on this abatement and have found none.  

Mayor Held, the terms for this particular CRA abatement have resulted in forgone property taxes in 2015 of $59,129. Over the fifteen-year term of this abatement, the City and the North Canton City School District will have forgone over ONE MILLION DOLLARS in revenue on this one abatement alone.  

If your Director of Permits & Inspection, Mr. Bowles, made the unilateral decision to approve this abatement, and it appears he did, you should ask for his resignation. 

This loss of public funds on this abatement is unconscionable and can only result from malfeasance, misfeasance or nonfeasance on the part of Mr. Bowles. 

Further, I ask that this Council reexamine many of the CRA abatements currently outstanding and terminate all the tax abatements that do not result in rehabilitation of existing housing structures in the City. 

Thank you,
Chuck Osborne
City of North Canton