ELYRIA — City Council will be asked to approve a special job-creation incentive that would reduce the income tax burden for companies that relocate to Elyria and bring good paying jobs with them.
Mayor Holly Brinda said the program is aimed at new businesses looking to employ new employees, and she would like to get it in place as soon as possible. She said she is in negotiations with two developers who may consider using it to help them locate businesses in the city.
She did not provide details about the businesses, but she said the incentive program would be aimed at companies that project to have a minimum payroll of $150,000 and that would pay employees no less than $11.55 per hour.
She will present the details of the program Monday to Council.
“This is not new,” she said Wednesday. “They have similar programs in Akron, Columbus and Cincinnati, and to be competitive Elyria needs one, too.”
The program makes it possible for the city to offer eligible companies a cash rebate based on a percentage of income taxes they pay to the city. The city would issue the rebates on or near June 30 of each year based on the companies previous year’s performance and it will not exceed 50 percent or 70 percent, which depends on where the business locates within the city and the type of industry.
Brinda said the higher rebate rate is an incentive to business expanding or locating in the downtown business district.
Tamela Grubb, executive director of Main Street Elyria, said businesses are always looking for incentives.
“In conversations with new business owners and people looking for space, it is generally the first or second question they ask,” she said. “They want to know ‘What is available to the small businesses owner and what is the incentive?’ ”
Grubb said the main goal of the organization is to bring new businesses to the downtown area.
“We truly need to generate new businesses as well as maintain our businesses,” she said. “The main goal is to fill up the spaces downtown and we are trying to market to that group that could potentially go into those empty spaces.”
Right now, spaces are available in the downtown area between 500 square feet on the low end to 10,000 square feet.
City Auditor Ted Pileski said this program could benefit the city although a sizable portion of the revenue will be go back to the employer.
“If it’s new employees, we are still getting the new revenue,” he said. “The incentive will only be temporary. After that the percentage will drop off, and then all of the tax revenue will come to us. So this will be new revenue to use whether its 30 percent in the beginning or 100 percent later on.”
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