By Vinde Wells
An agreement with a Polo manufacturer that is expanding was approved Monday night by the city council despite opposition from two aldermen.
Aldermen Randy Schoon and Cheryl Galor voted no to entering into a Tax Increment Financing (TIF) District redevelopment agreement with PNC, Inc.
The measure passed 4-2, however, with yes votes from aldermen Troy Boothe, David Ackeberg, Louise Hall, and Matt Mekeel.
PNC officials are planning a 100 by 100 foot expansion of their building on East Oregon Street.
The estimated cost of the new building is $1 million, and the expansion is expected to bring 25-30 new jobs to the community.
The firm, which makes custom electromagnet solenoid coils and wiring harnesses for the automotive and hydraulic industry, has two locations in Polo. The other building is on East Mason Street in the downtown.
The proposed agreement with PNC calls for 60 percent of the real estate taxes, an estimated $200,000, generated from the expansion to go back to PNC for its redevelopment for the remainder of the TIF district, which is 17 years.
The remaining 40 percent would remain with the city in the TIF Fund.
After the 17 years, the city will receive its full share of taxes on the expansion.
Schoon was vocal in his opposition to the agreement July 21 when the council discussed it for the first time, and he still had not warmed to the pact on Monday.
“This is not about PNC,” he said at Monday’s meetings.
He criticized the process of reaching the agreement, calling discussions between Mayor Doug Knapp, city clerk Susie Corbitt, and PNC officials “closed door” negotiations.
Schoon said he believes the entire city council should have been included in the discussions and been sworn to secrecy about the details.
He also said the council has not been fair in how it has handled TIF requests.
“We trip over ourselves to help one,” he said while a request from Dave Ferris was rejected.
Corbitt said Ferris, who owns an auto body business, was requesting a loan larger than the amount in the TIF Fund.
Schoon said the council did loan money to Roger Wakeknight for a used car business and shouldn’t have.
Mayor Doug Knapp agreed.
“We learned from that and we won’t do it again,” he said. “We’re not in a position to give anyone any money. We’re in a position to give real estate tax breaks and sales tax breaks.”
Corbitt said the city loaned Wakeknight $32,000 from the General Fund several years ago without any agreement about how long the business must remain open.
It subsequently closed, and the property is now owned by Haldane Auto & Custom.
The money is being repaid to the General Fund from the TIF Fund as it builds adequate revenues and will be repaid completely next year, Corbitt said.
Knapp said that the sales tax generated for the city by Wakeknight’s business more than covered the money loaned to him.
“A lot of this makes no sense to me at all,” Schoon said. “I don’t see where we’re getting anything out of this.”
Polo Economic Development Committee Chairman Mike Faivre said helping PNC with its expansion helps Polo financially in the long run.
“You have a blank piece of property that’s not bringing in anything,” Faivre said. “You give up something up front, but that money comes back over the years.”
He said several local contractors will be working on PNC’s project. Besides that he said the expansion will bring new jobs in addition to the 150 to 175 people the firm already employs.
“I believe they’re the number one employer in Polo,” he said. “It’s good to help new businesses, but you also need to take care of the businesses you have.”
Local businessman Richard Butler also urged the council to approve the agreement with PNC.
He said without the city’s assistance, PNC officials could decide to expand in another community.
“It [the 40 percent of the real estate tax increase] is better than 100 percent of nothing,” Butler said.
He pointed out that PNC helped the city fund its recent water project.
Hall asked for the matter to be tabled until a representative from PNC attends a council meeting to answer questions.
Schoon and Galor agreed.
“I think we should do it, but I want some questions answered,” Schoon said.
“I don’t understand how that building can generate that much money,” Galor said.
Corbitt explained that the amount of real estate taxes is estimated based on the projected value of the new building.
Schoon also complained that the city council is giving PNC a break while water bills have increased and the city continues to charge fees for building permits.
“When does the common man get a break?” he said “You people just don’t get the point.”