The-News-Leader.com - Mayor sees 'poaching' in firm's move

Hudson denies claim, says city came to them first

by Bill Hammerstrom

Hudson Hub-Times Editor

Hudson -- City officials say they do not solicit businesses from neighboring communities, but their lack of involvement in a county tax-sharing program has Macedonia's mayor considering soliciting companies in Hudson.

Beauty Systems Group recently decided to move its headquarters and 40 employees from Macedonia to Hudson, where it will occupy 10,000 square feet of the 50,000-square-foot office building at 5700 Darrow Road.

When he heard about the Beauty Systems move, Macedonia Mayor Don Kuchta said, "There was no doubt in my mind that they had poached that company, especially since they had not passed anti-poaching legislation.

Quote:

There was no doubt in my mind that they had poached that company

Don Kuchta, Macedonia Mayor

Hudson officials are angered by accusations of poaching, City Manager Anthony Bales said. They say Beauty Systems came to them looking for a new location, not the other way around.

"We have never been to another community soliciting businesses and we never will," said Hudson Communications Manager Jody Roberts.

The loss of Beauty Systems is "a big deal" for Macedonia, which has lost almost 2,000 jobs in recent years, Kuchta said.

He believes Hudson could have helped Macedonia with the loss if it has chosen to participate in the Summit County Jobs Preservation Agreement, where Summit County municipalities agree to share income tax revenue when a company moves from one city to another within the county.

Macedonia is one of 14 participating Summit County communities, including Akron and Cuyahoga Falls, while Hudson is among 10 that don't, including Stow.

Hudson does not participate because the program doesn't address the back-filling of jobs, Roberts said.

For example, even if Macedonia is able to immediately replace the loss of Beauty System's 40 jobs, Hudson would still have to share the income tax collected from Beauty Systems for the duration of the agreement if it was involved in the Summit County program, according to Roberts.

Hudson's lack of involvement in the county program has Kuchta considering telling Hudson companies about the benefits of moving to Macedonia, he said. He said he would like to let Hudson firms know that Macedonia's 53.2-mill tax rate for businesses is lower than Hudson's 78.7 mills.

Quote:

We have never been to another community soliciting businesses and we never will

Jody Roberts, Hudson Communications Manager

Hudson officials are "disappointed that that would be the direction he would take," Roberts said, stressing that Hudson has not gone out and solicited companies in other cities.

Hudson officials say they support regionalization efforts but have a specific problem with the county tax-sharing proposal.

The city would consider signing the Jobs Preservation Agreement if the county addresses the back-filling issue, according to Bales.

The county will likely discuss the back-filling issue later this year when it renews the annual agreement with participating municipalities, according to Connie Krauss, the county's director of community and economic development.

Kuchta said he questions Hudson's intentions, as on one front it is pushing for regionalization in dispatching services, but on the other hand won't sign the county tax-sharing arrangement.

"Maybe what's going to happen is I'm going to ask them for half the money anyway," he said.

Hudson is willing to discuss tax sharing options with Kuchta, according to Roberts. Hudson City Council would have to approve any agreement, she said.

City defends economic development process

Hudson denies that it "poached" Beauty Systems.

A Realtor representing the firm first notified the city that the company had downsized and was looking for a new home, Hudson Economic Development Director Chuck Wiedie said.

A Beauty Systems representative had not returned a phone message by press time.

Wiedie met with company officials, who at the time were considering locations in Hudson and other communities, including Stow and Twinsburg, according to Wiedie.

They asked about possible incentives, and Wiedie explained the possibility of a job creation grant, but he told them to first discuss options with Macedonia officials, Wiedie said.

Kuchta said that when Beauty Systems representatives called to let him know they were moving to Hudson, they had already made up their mind to leave.

"The conversation went like, 'We just want to let you know that we're leaving. We enjoyed the time that we were here, but we're going,'" Kuchta said.

When Beauty Systems came back to Hudson, it had not made a "final definitive decision" to move in, according to Wiedie. He then outlined the job creation grant program, he said.

However, the company didn't move to Hudson for the tax incentives alone, Bales contends.

The incentives offered by Hudson are similar to incentives offered by other communities, he said.

"You can get the incentives anywhere," Bales said.

Beauty Systems is eligible for incentives in Hudson because it is adding employees there.

There was no incentive Macedonia could offer if the company is not adding employees, as that is the eligibility criteria for all approved economic incentive programs, Kuchta said.

"There's really nothing I can do for someone who is leaving," he said.

"If someone is coming to town, they're eligible for enterprise zone agreements, they're eligible for the MOP," Kuchta added, referring to the Macedonia Occupancy Program, through which the city offers grants to companies that add employees when they expand or move to town.

Hudson officials agree that the state's incentive system is favorable for new companies.

"It is difficult to come up with creative incentives" to entice a company stay, Bales said.

Editor's note: News Leader Editor Eric Marotta contributed to this story.

E-mail:
bhammerstrom@recordpub.com

Phone: 330-686-3944