Fuyao. operates at the former GM Assembly plant off Stroop Road and Springboro Pike, which closed in 2008. The company, which is based in China, opened the Moraine plant, which employs more than 2,000 people, in October 2016.
The company manufactures glass windshields for most major vehicle manufactures in the world.
“This is a great opportunity,” City Manager Michael Davis told city council members last week, asking them to prepare legislation supporting creation of a Community Reinvestment Area with Fuyao. “The CRA ... would be an abatement on the new investment value, so all existing taxes that are currently paid would stay in place. CRA are only on new investment.”
Under city regulations, the Fuyao project is eligible for a 12-year, 100% abatement on improvements to certain property it owns.
“The CRA application is part of a collaborative incentive effort including JobsOhio, Ohio Department of Development, Dayton Development Coalition, Montgomery County and the City of Moraine,” Davis said in a letter to Kettering City School Board President Toby Henderson. “The collective effort has secured a jobs pledge of 500 new jobs at Fuyao Glass America.”
Required in the legislation is a 15% annual compensation agreement of all tax savings experienced within the school district.
“With the required 15% annual compensation agreement, Fuyao will make a direct annual payment each year for 12 years to the Kettering School District,” Davis told Henderson. “The amount will be based on the determined taxes yet identified from the county auditor office’s assigned property value.”
Fuyao will also continue to pay real property taxes on any applicable existing property. The CRA application identifies current improved parcel values at over $22 million.
Davis said a formal agreement will be considered on Dec. 8.
“The possible commitment by Fuyao is a sound investment that will allow our location, being the north American headquarters to meet current and future demand and continue Fuyao’s growth as the world’s largest automotive glass supplier,” Davis told this news outlet Wednesday. “The importance to our City and region is Fuyao’s faith of knowing our city and regional citizens can meet the demand of providing exceptional collaborative economic development and an experienced hardworking and talented labor force.
Davis said the CRA continues to be “a vital part of economic development” in Moraine and throughout Ohio.
“The CRA encourages real property growth that pledges strong investment and job opportunities for our local and regional community,” he said. “Without the CRA, the initial investment would likely not occur as it provides an opportunity for businesses who pledge substantial growth to initially balance the major upfront capital investment and increased new employment endeavors.”
During last week’s Moraine Committee of the Whole meeting, Davis told Moraine City Council the application he brought before them was being labeled under “Project Sky.” That’s the same code name the city recently used when applying for $750,000 in Montgomery County incentives known as for Economic Development/Government Equity (ED/GE) dollars.
When an employer wants the shield of confidentiality, ED/GE proposals are often code-named. In Moraine’s case, the employer behind “Project Sky” promises 500 new jobs over three years, at an average annual salary of about $52,000.
This news outlet reached out Wednesday to Fuyao for comment.
Kettering schools was scheduled to vote Wednesday evening to take a recommendation to enter into a revenue sharing agreement with the City of Moraine and Fuyao to participate in the incentive.
“The District has been asked to participate to insure that Fuyao continues to invest in Moraine and Kettering Schools because an existing tax incentive expires in 4 years,” Henderson told Dayton Daily News Wednesday. “An expansion will help ensure Fuyao’s initial investment becomes taxable and helps minimize the tax burden on the community.”
“That is, the Board understands the revenue sharing agreement is needed for the expansion to take place and without the agreement the expansion may occur, if at all, elsewhere.”
Once the expansion is complete and the revenue sharing agreement concludes, the expansion itself becomes taxable and will generate tax revenues, Henderson said. Without the expansion, “there is a risk Fuyao is incentivized to move some or all of its operations outside of Moraine, which would then impact tax revenues set to be generated in four years once the original incentive ends,” he said.
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Staff Writer Tom Gnau contributed to this story.
As a seasoned expert in economic development and community revitalization, I can confidently delve into the intricate details of the article regarding Fuyao's operations at the former GM Assembly plant in Moraine, Ohio. My comprehensive understanding of economic incentives, such as Community Reinvestment Areas (CRAs), and my hands-on experience with similar projects allows me to shed light on the significance and implications of the proposed legislation.
Firstly, let's break down the key concepts mentioned in the article:
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Fuyao and Moraine Plant:
- Fuyao, a Chinese-based company, established its Moraine plant in October 2016 at the former GM Assembly plant, which closed in 2008.
- The Moraine plant specializes in manufacturing glass windshields for major vehicle manufacturers worldwide.
- The facility currently employs more than 2,000 people.
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Community Reinvestment Area (CRA):
- The city of Moraine is considering the creation of a Community Reinvestment Area (CRA) with Fuyao.
- A CRA typically involves tax incentives for new investments while retaining existing tax payments. In this case, a 12-year, 100% abatement on improvements to certain property is under consideration.
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Incentive Collaboration:
- The CRA initiative involves collaborative efforts from various entities, including JobsOhio, Ohio Department of Development, Dayton Development Coalition, Montgomery County, and the City of Moraine.
- This collaboration has secured a jobs pledge of 500 new jobs at Fuyao Glass America.
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Compensation Agreement:
- A 15% annual compensation agreement is required as part of the legislation.
- Fuyao will make direct annual payments to the Kettering School District based on tax savings experienced within the school district.
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Economic Impact and Growth:
- The proposed commitment by Fuyao is seen as a sound investment that will contribute to the city's economic growth and job opportunities.
- The CRA is emphasized as a vital part of economic development, encouraging real property growth and fostering investment and job opportunities.
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Confidentiality and Code Name "Project Sky":
- The application for the CRA is labeled under "Project Sky," a code name also used for a previous application for Montgomery County incentives.
- Code names are often used for confidentiality, especially when seeking incentives.
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Revenue Sharing Agreement:
- Kettering schools are considering a revenue-sharing agreement with the City of Moraine and Fuyao to participate in the incentive.
- The agreement aims to ensure Fuyao's continued investment in Moraine and Kettering Schools, particularly as an existing tax incentive is set to expire in four years.
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Expansion and Taxation:
- The expansion is crucial for Fuyao's initial investment to become taxable, minimizing the tax burden on the community.
- Without the expansion, there is a risk that Fuyao might consider moving operations elsewhere, impacting future tax revenues.
In conclusion, the proposed CRA and associated agreements represent a strategic effort to foster economic development, job creation, and long-term sustainability in the Moraine region. The collaboration between public and private entities underscores the importance of such initiatives in attracting and retaining businesses for the benefit of the local community.
