An Ohio county is penalizing a custom injection molder for not meeting its end of a tax-abatement bargain. Texler Inc. did not create the 135 full-time jobs necessary to earn a 100 percent tax cut for its Macedonia, Ohio, plant and equipment, including 29 injection presses, and intangible assets. Summit County Council in Akron voted March 4 to reduce the molder's tax cut 25 percent retroactive to Jan. 1, 1995, according to Dale Gibbons, who heads the county's Department of Development. That vote is now legislation.
But Texler's operations manager, Lori Tecco-Pitzer, claims that an area labor shortage is behind her firm's failure to reach the employment goal. Plus, she is quick to point out that Texler's payroll exceeds the $1.57 million it must generate as part of the same economic agreement.
In July 1990, when Texler moved into its new, 65,000-square-foot Macedonia plant, it employed 115 full time, most of whom had relocated with the company from Solon, Ohio, she said in a March 13 telephone interview. By December 1994, employment had dropped to 110.
Late last year Tecco-Pitzer told Macedonia City Council that Texler had trouble recruiting employees, because of ``severe competition for entry-level employees in northern Summit County.''
The council seemed to agree, voting Jan. 11 to give the company one more year to make the mark.
That is why the county's recent vote stunned both Tecco-Pitzer and Macedonia Mayor Joseph Migliorini, they said.
``We would hate to believe that the county would have taken an action without at least talking to us to see what our rationale was,'' Migliorini said.
But Gibbons said the county's vote followed a recommendation last fall from a tax incentive review council, composed of representatives from both Summit
County and Macedonia, that Texler's tax abatement be reduced to 75 percent effective Jan. 1, 1995.
Texler was aware of that group's recommendation, she said. But, she added, the county council was completely blindsided, because it was not aware of the city council's vote ``until it came out in the newspaper'' after the county already had ruled on the issue.
``Our county executive is very concerned about the message that this sends,'' Gibbons said.
Though the county's legislative action looks anti-business, she claims it worked to secure a solution that benefits the company.
``It could have been a lot worse,'' she said. ``There are moves across the state to disband the [abatement] program altogether. The school systems hate the program, generally speaking,'' because they see the tax cuts on tangible property as dollars that should be coming to them.
Land, including Texler's 11 acres, is not included in such tax-abatement packages, she said.
Since 1989, the county's Western Reserve Urban Jobs and Enterprise Zone has lured manufacturers to the area with tax incentives.
Tecco-Pitzer contends her company acted in good faith to fulfill its end of the economic agreement, but that the enterprise zone has worked too well, drying up the labor pool.
Both Migliorini and Gibbons concur that the unemployment rate in the zone is not what it was in 1989.
``I feel that there definitely is a shrinkage of the labor pool in this area,'' Migliorini said.
The competition among industrial and commercial firms is so stiff, he said, that a local Wendy's restaurant is offering starting pay of $7 an hour and a $300 bonus after 90 days on the job.
``We've gone from 8-10 percent [unemployment rate] to less than 4 percent, depending on what area you're in,'' Gibbons said. ``Up in the northern tier, we know there is a tough labor situation there.''
Gibbons said the county needs to re-evaluate the incentives it offers, including how they are awarded.
Despite the county's vote, Migliorini said he considers the matter unresolved and has turned it over to the city's lawyers, who will determine whether the county legally can override Macedonia's decision to wait until Jan. 1, 1996, to trim Texler's tax cut to 75 percent. At year's end, the city could restore the full abatement if the company meets its jobs-creation goal by then.
Last month the company had 128 people on its full-time roster - just seven shy of the needed number. Tecco-Pitzer said the company has been working with local organizations to increase its ranks, including Goodwill Indus-tries. But, she said, Texler must tailor jobs around the special needs of several of those new employees.
Texler molds plastic parts around the clock, seven days a week, for markets that include consumer, electric and medical, she said. It also runs an in-house toolroom.
In 1989, having outgrown its two-plant setup in nearby Solon, Texler went shopping for options, and picked a Macedonia industrial park as the site of a new plant. Migliorini campaigned hard to bring the company to the city, she said.
