Don Joseph to expand in Kent Tax abatement set for auto dealer

Email To A Friend
Printer Friendly
Comments

---

By Matt Fredmonsky
Record-Courier staff writer
The retention and future $12.6 million expansion of Don Joseph Toyota Scion on Kent's Auto Mile, though viewed positively by many community leaders, has not come without a cost to the city of Kent and the Kent City School District.
The Kent Board of Education and Kent City Council have approved community reinvestment area agreements with Jeff Joseph, who owns the West Main Street car dealership.
The city deal involves a 12-year, 75 percent tax abatement on the expansion work. And, in May 2007, the city contributed $25,000 to Joseph by means of a grant to aid in the purchase of adjacent property necessary for the expansion.
The city's plans administrator, Mike Weddle, said the deals made to keep the dealership from relocating to Streetsboro, as it had been planning, will pay off in the long run.
"The abatement was a key factor in maintaining Don Joseph's presence in the city of Kent as opposed to having them relocate," he said. "By maintaining their presence we maintain a million-plus dollars of annual income from Don Joseph's operation."
The dealership receives an automatic 50 percent tax abatement on the real property improvements made for the expansion through gaining approval for the community reinvestment area tax incentives. Joseph negotiated with the school board for the additional 25 percent.
Deborah Krutz, Kent City Schools treasurer, said the district stands to lose about $22,000 annually for the period of the abatement.
"Obviously the school district does eventually gain new taxes from this improvement and venture on the west side of Kent, so we certainly wanted to be a good partner," Krutz said. "They're going to stay here in Kent and that's great news for the community."
The district also struck a compensation agreement with the car dealer to provide for $5,000 annual payments to the school system during the abatement period. The money is not earmarked and will support the district's educational program. Joseph also will make a $500 annual payment to the city during the abatement.
According to the dealership's application for the community reinvestment area tax incentives, which was signed by Jeff Joseph, the business' expansion comes as a mandate from Toyota's corporate offices requiring dealers to comply with a standard dealership image.
Don Joseph's expansion will include a new, 18,000 square foot service and parts center. A total $400,000 will be spent on new machinery and furniture, and $7.5 million of new inventory will be added. The project is expected to create 15 new full-time jobs and four new part-time permanent jobs to add to the dealership's existing annual payroll of $1 million with currently 52 full and four part-time employees.
John Flynn, the Kent school board member who asked for approval of the additional 25 percent abatement, said the eventual revenue the dealership will generate is worth the price of the 12-year abatement.
"We never like tax abatement, but in this community at times it's a necessity," Flynn said. "It's important to the community to see (Joseph's) business expand."