WEST CHESTER, Ohio -- Two West Chester businesses now await approval from the state for a tax break on proposed multi-million dollar expansion projects expected to bring almost 100 new jobs to the region.
Butler County Commissioners approved Thursday Contingent Network Services and long-time West Chester business, Systecon, Inc. for business incentives based on each company's real property investment and job creation plans.
The deal would give Contingent Network Systems a 65 percent tax exemption for an eight-year term on $4.5 million of the Information Technology company's proposed $5.4 million expansion project. The company, which serves large enterprises like P&G, Chick-fil-a and Barnes & Noble, will invest that amount in the construction of a 75,000 foot building on its main campus.
Contingent Network Systems must retain its 120-full-time permanent employees and create 75 new full-time positions over the next three years in order to receive the tax exemption. .
Systecom, Inc., which makes heating, ventilation and air-conditioning units for schools, hospitals and clients like Wal-Mart and General Motors, would receive a 55 percent tax exemption for a seven-year term on $2.1 million of a $2.7 million investment into a 55,000 square foot expansion at its current headquarters.
The company must create 18 new jobs in the next three years, which would increase its employment numbers to 81.
Both companies must also compensate the Lakota School District for the additional real property investment from their expansions, and would continue to pay full property taxes on their current facilities.
"We want to make sure that we don't damage the schools in anyway so the companies write a check back to the school district to compensate for the loss of their income," said David Fehr, director of development for Butler County.
The business incentives are offered as part of the Ohio Enterprise Zone Program, a state economic tool that provides real and personal property tax exceptions to businesses making investments in Ohio. The program is utilized by municipal and county governments across the state to keep businesses in the area and to boost local employment.
"Both companies have stated that other areas are trying to entice them to move. [Businesses] are pretty flexible these days. They could do business in Ohio, Texas or Florida," said Fehr. "It's a lot easier to keep one that's already here than to try to attract another business to the county."
Butler County currently has 13 active Ohio Enterprise Zone agreements with local businesses and that number could likely boost to 15, pending the Commissioners approval Thursday and then final approval from the state.
Fehr said the agreements have contributed to the county's now-declining unemployment rate, which dipped to 6.6 percent in August of this year, according to the Ohio Department of Job and Family Services.
"Hopefully it's driving that number down," he said. "We're not out of the woods yet, but we're moving."
Barbara Wilson, director of integrated multi-media and marketing in West Chester Township, said the expansion of businesses like Contingent Network Services would bring more jobs to the township than what the company directly employs.
"If a specific type of company brings in a certain number of jobs, that company not only supports those jobs directly but indirectly supports additional jobs by doing business in the local economy," said Wilson.
In Contingent's case, Wilson said the company indirectly supports 93 jobs in the township. That number comes from a formula that is intended to indicate a business' overall impact on job creation.
In recent years, Butler County has been home to several large-scale expansion projects and new developments. Commissioners approved a master agreement in July for a $325 million mixed-use development in Liberty Township, and businesses like West Chester Hospital, GE Aviation and Amylin Pharmaceuticals have re-located to the area.
If the state approves the two incentive plans, Fehr said the tax exemptions would start after construction on each expansion project is complete.