Did something change on the GE deal?

When the school board passed the 30-year tax abatement on the GE Power building under pressure from the “economic development” folks who claimed GE wouldn’t come to Dayton without the tax break, the deal for the building and tax abatement was to an LLC. The tax break was for 30 years- yet, now in today’s paper, the building is owned by UD, and GE only has a 15-year lease.

Employees are moving into the new $51 million GE Aviation electrical power research and design center near the University of Dayton main campus.

The presence of employees in the building at 111 River Park Drive is a milestone in this young joint venture between the company and the university. The intent is to use the building to attract more business to GE Aviation and more students to the university…

Owned by the university, the building — called the Dayton Electric Power Research Lab — “gives us the ability to compete at a higher level in electric power on aviation platforms,” Vic Bonneau, president of GE Electric Power Integrated Systems. said.

GE has a 15-year lease on the building with an option to extend the lease, said Derek Bus-boom, project manager during construction.

via GE moves into $51M aviation research site.

Now it seems that the citizens of Dayton just subsidized a building for a private university, at a huge cost to our schools, which are struggling to pay rising health care costs, rising textbook and technology costs, and serve a student body, most of which can’t afford the luxury of an airplane ticket.

General Electric is still one of the most notorious tax evaders in the United States, and UD doesn’t pay property taxes the same way churches avoid them- 5709.07 Exemption of schools, churches, and colleges.

If the GE lease is only 15 years, shouldn’t the tax abatement only be 15 years and renewable? This is not an educational building anymore than the Dragons’ field is a place that hires Dayton Public School students (one of the promises made in the final deal by then Mayor Richard Clay Dixon, to let the taxpayers pay for a facility owned by the team).

It’s time to re-evaluate what this GE facility should be eligible for in terms of tax breaks, and closely monitor employment and wages paid to see if they match the agreement.

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7 Responses

  1. truddick August 9, 2013 / 8:58 am
    The only way to eliminate this sort of tax unfairness would be a national constitutional amendment forbidding any government from granting individual entities any tax advantages.  Probably too large a project, given our current political climate.

    Brilliant or Bozo? Thumb up 4 Thumb down 0

  2. Jamie August 9, 2013 / 2:12 pm
    Wealthy private universities are people too, my friend.

    Brilliant or Bozo? Thumb up 1 Thumb down 0

  3. Gary Leitzell August 10, 2013 / 12:00 am
    Look at this from a different perspective. Prior to GE you had vacant land owned by a non profit paying no taxes. This land could have been vacant for 20 years. Now you have a $52 million facility that created construction jobs and possibly up to 200 more after completion where people are paying income taxes and GE has offered to assist the school district with with some educational perks. Which is better? Vacant lot contributing nothing or a productive lot that will contribute to the schools in lieu of taxes and create jobs that support the local economy?
    Sometimes something is better than nothing. I don’t like tax incentives but the truth is that this project forced our staff to look at new market tax credits. Something they never considered before. These credits were around for years and other municipalities were using them. Now we are empowered to add these to our arsenal when looking at prospective opportunities. If you don’t like this, blame me. I was the guy who asked the president of UD back in April 2010 to consider soliciting GE to look at UDRI as a possible location. I was thinking of them renting space at the old NCR headquarters but it morphed into something greater. Little known fact buy very true.

    Brilliant or Bozo? Thumb up 2 Thumb down 3

  4. David Esrati August 10, 2013 / 10:27 am

    No Gary- look at if from this point- we’ve been surviving on taxation without representation for too long. Other employees, including mine pay income taxes- and we pay property taxes. Either the taxes are too high- or GE can go find somewhere else. Reality is- if UD is really that integral to the project- they were coming here anyway.

    I’m sick and tired of the city running a restaurant that gives away the filet mignons to those who can afford it- while serving overpriced horsemeat to the every day customers who actually live in the city. Our schools deserve the revenue. End of story.
    This “contribution in lieu of taxes” BS is BS.

    Who is our government working for?

    It’s time to stop giving away the store.

    Brilliant or Bozo? Thumb up 5 Thumb down 1

  5. bobby August 10, 2013 / 6:20 pm
    It was my understanding that UD and Cityide Development were going to be partners on the building, with Citywide doing the heavy lifting by providing financing, thus the presentation of an LLC to the school board. Once the deal was in place, UD no longer wanted to partner and kicked Citywide to the curb…….. Mayor?

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  6. David Esrati August 10, 2013 / 10:35 pm

    It’s time to do a comprehensive audit of CityWide. Tech Town is mostly empty- and tenants aren’t paying rent- how much should the taxpayers subsidize this slush fund?

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  7. truddick August 11, 2013 / 11:52 am
    Mayor Leitzell, I am not going to blame you for doing your job according to standard practices.  EVERY government hands out sweet tax breaks to those who don’t need them.  GE, disputes these numbers, but it seems that in the federal level, they paid zero corporate taxes and in fact received $3.2 billion in incentives.  So their tax rate is estimated as NEGATIVE 25%.  Makes Mitt Romney’s 14% rate seem relatively fair next to the 20-some percent you and I and Esrati are paying.

    It’s true.  Dayton will not compete for business investment without continuing to offer these sweetheart deals.  It’s how it’s done, nowadays.  But let’s not let the status quo excuse itself; it’s fundamentally unfair.  If I wanted to start a new business to compete with GE, would I get to pay no taxes–much less negative taxes?  I doubt it–and that ain’t capitalism.

    That’s why I say we need a national constitutional amendment forbidding them.  It’s not going to be a fair market until the playing field applies the same rules to everyone.
     
    And I add, we’d need a providential stroke of luck convincing Mike Turner and John Boehner and Rob Portman to sponsor that amendment: (I’d cite a few Democrats as well but the closest ones are from Colubmbus and Toledo).  The current game lines their pockets (er, campaign pockets) too well.

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