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L'Oreal's tax abatement deal approved at annual Streetsboro meeting

by mike lesko | Reporter Published: March 26, 2014 12:00 AM

Streetsboro -- L'Oreal's tax abatement agreement went through without a hitch this year.

The company's tax abatement agreement, which is in the ninth year of its 10-year term and includes a 100 percent abatement on tangible personal property taxes and real property taxes, was unanimously approved at the city's annual Tax Incentive Review Council meeting March 13. The agreement needs to be reviewed each year.

L'Oreal committed in 2004 to provide 256 full-time jobs throughout its 10-year agreement, but reported 166 full-time jobs as of its most recent filing in December 2013. However, it met its other two criterion from in its 2004 enterprise zone agreement, thus qualifying for its tax incentive deal with the city to receive an annual approval, according to Mayor Glenn Broska.

Lisa Hrach, L'Oreal controller and senior manager, could not be reached for comment.

Law Director David Maistros said L'Oreal's tax incentive agreement required the company to meet one of three benchmarks to remain in compliance, and it has met two of them. L'Oreal has $85.9 million in personal property investments, exceeding the company's $38.7 million goal in 2004. L'Oreal also has $9.3 million in total payroll, exceeding the company's $8.8 million goal in 2004.

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Committee member Stan Jankowski questioned whether the employee number was high enough.

"This company was sent back to Council before [in 2012 to determine whether there were enough employees], and the law department was asked [by Council] to review the enterprise zone agreement," Jankowski said.

Broska said the law department determined that L'Oreal had met its commitments, despite the employee numbers.

In 2012, City Council member John Ruediger said he believed the employee shortage meant L'Oreal was out of compliance with its enterprise zone agreement.

But Maistros said there was nothing in the agreement requiring the company to maintain 256 full-time jobs after 2007.

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At the March 13 meeting, Mayor Glenn Broska agreed, saying, "L'Oreal made the Streetsboro plant a model of safety and efficiency. Even though their employee numbers are down, they are compensating employees much better [thus the higher payroll]. L'Oreal has complied with everything the city has asked of them regarding donations to the community. The city hadn't really asked for any specific thing, just assistance [at Streetsboro's parks]. L'Oreal paid 30-40 people to work at Thomas Heritage Park to help construct the new dog park and to help clean up City Park. L'Oreal also donated three pallets of products to the Streetsboro Senior Center after a trade show."

Broska said he recently visited L'Oreal, 10345 Philipp Parkway, and said although L'Oreal's tax abatement deal expires in December 2015, he said the company is "here for the long haul -- way after the enterprise zone agreement expires."

The mayor said L'Oreal had "an option a while ago to close the Streetsboro plant, the Toronto plant or the Louisville, Ky., plant, and they decided to keep the Streetsboro plant as their international distribution center."

The TIRC also unanimously approved annual tax abatement deals with six other companies -- American Heritage Billiards/Cinquest Enterprises; Aurora Plastics; Best Buy Streetsboro and Best Buy Warehousing Logistics; Delta Systems/BF Properties; Joseph Industries; and Viking Forge.

The TIRC includes Streetsboro residents Dick Demich, Bill Lishing, Jankowski and Nick Funari; Broska; Finance Director Jenny Esarey; School Board Vice President Brian Violi; Portage County Auditor Janet Esposito; Portage Development Board President Brad Ehrhart; and PDB Economic Development Specialist Diana Fierle.

School Board President Andrew Lesak, who's also a member, was unable to attend.

Email: mlesko@recordpub.com

Phone: 330-541-9439

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