A longtime Arnold piping company will expand and offer space to bring new business to the city after City Council members voted unanimously Sept. 18 to approve issuing a Chapter 100 bond abatement to Acid Piping Technology. The company will use the funding to help construct a multi-tenant industrial building on Arnold Tenbrook Road.
The deal will allow the city to secure the Chapter 100 bonds and provide APT, which has operated in Arnold since 1991, up to $15 million to construct the 106,000-square-foot building at 2880 Arnold Tenbrook Road.
The Chapter 100 taxable industrial revenue bonds will fund the development and allow APT to pay just 5 percent of property tax to non-emergency entities, such as the city and Fox C-6 School District, for the first five years of the 10-year deal and then 25 percent of the property tax for the five years after that. At the end of the deal, APT would pay the entire property tax cost.
As part of the deal, APT also is exempt from paying sales or use taxes on some construction materials.
“We are very happy,” said Alex Knoll, who owns the company with his brother, Fritz Knoll. “Arnold has proven to be business friendly. That is always a good thing. We are looking forward to bringing some really good tenants to the area.”
The company had requested only paying 50 percent of the property tax to emergency responders, such as the Rock Community Fire Protection District and the Rock Township Ambulance District, for the 10 years. However, the two entities opted out of the tax abatement agreement, which means APT will have to pay them 100 percent of the property taxes, Arnold City Attorney Bob Sweeney told the council.
In August 2018, Senate Bill 870 was passed and allows ambulance districts and fire protection districts and counties operating a 911 center providing emergency or dispatch services to receive a reimbursement of between 50 and 100 percent of property tax revenues the district or county would have received in the absence of a property tax abatement or exemption provided for under Chapter 100 bonds.
Arnold Mayor Bill Moritz said he is happy the Chapter 100 bond agreement passed.
“It is good,” he said. “I like to see something done on that property. It has been years and nothing has been there. I am happy to see them go forward. They came to us and said if they couldn’t get the Chapter 100 incentive, they probably wouldn’t be able to build such a nice big building.”
APT purchased the approximately 16-acre property in 2013. The site is next to the company’s current building at 2890 Arnold Tenbrook Road.
The new building is expected to cost approximately $10 million to build, according to APT and consulting firm Steadfast City Economic Community Partners.
Bill Lehmann, interim Arnold city administrator and the city’s finance director, said while the building cost is expected to be about $10 million, the developer anticipates spending approximately $3 million on buildout and improvement costs and an additional $2 million may be needed to cover unforeseen costs.
Alex Knoll said he doubts APT will need to use all $15 million available through the bonds.
He said the foundation for the new building has been completed and walls were expected to start being erected on Monday. He said the building could be completed by the end of the year.
“We are going full bore now,” he said. “It is 100 mph now.”
Lehmann said it is important for the city to work with companies requesting tax abatements.
“These types of projects provide jobs,” he said. “New employees will spend money locally while they are here, which adds sales tax dollars. Potential new tenants can also add sales tax dollars if they are selling products.
“As new projects are implemented, it creates exposure for other potential new projects. In addition, the increase in property value provides an increase in property tax revenue.”
The building
The building will have up to six spaces for tenants, ranging from 12,861 to 19,694 square feet, according to a presentation Steadfast City showed the council during a July work session.
Alex Knoll said APT will use approximately 15,000 square feet of the new building as a warehouse. APT is the last stop for pipe cast in Ohio and Virginia before it is shipped to about 800 companies around the world.
The company will rent the remaining five spaces, Knoll said.
The new businesses will likely use the spaces for offices and storage, and the new businesses may create 35 to 105 new jobs in the city, according to Steadfast City’s presentation to the council.
“We are speaking with a few (potential tenants) right now, one of which will likely take most of the space,” Knoll said. “There will likely be less than six businesses.”
According to Steadfast City’s presentation, the Chapter 100 bonds will allow APT to retain its current 21 full-time employees and add five positions with average salaries of about $70,000.
As of Sept. 19, APT had already hired four new employees, Knoll said.
“We really don’t have room for them, but if you get the opportunity to hire good people, you hire them,” he said.
Incentives
Council members voted 7-0 on July 17 to allow APT to purchase some construction materials without paying state and local sales or use taxes before the Chapter 100 bonds were approved.
That decision allowed the company to purchase items like sandpaper, fuel to run equipment, drill bits and other materials that are consumed during construction. APT still had to pay sales or use taxes on items like hand tools, water coolers and bulldozers, according to council documents.
Steadfast City projected that after the land is developed, Fox C-6 will collect $158,514 in property tax over the 10 years the abatement is in place. The firm also projected that without the land being developed, the school district would have collected $10,718 in property tax over that same time, meaning Fox C-6 will collect $147,796 more with the tax abatement in place.
Arnold will collect $6,285 more in property tax revenue from the site over the next 10 years. The city will collect $6,741 in property tax revenue after the building is completed, instead of $456 if the land were not developed, according to Steadfast City.
Knoll said the company may have built a smaller warehouse for its own use without the tax abatement.
“The Chapter 100 helped cement developing the entire parcel instead of just doing a much smaller, less expensive building,” he said. “It took away some of the risk of developing a big area as opposed to just building a smaller building.”