Tax incentives OK’d for Cleveland plant expansion

Published 12:09 am Tuesday, November 17, 2015

Rowan County commissioners Vice Chairman Jim Greene put it simply when voting to approve a tax incentive agreement with the county’s second largest private employer.

“It seems like a no-brainer,” Greene said during Monday’s county commissioners meeting.

Commissioners on Monday approved a five-year tax incentive agreement with Daimler North America’s Cleveland plant. The company is planning a nearly $38 million expansion, and the five-year agreement is projected to provide about $940,000 in tax incentives to help ease the cost of expansion. The Cleveland plant — whose main product is Freightliner trucks — would first pay taxes and later receive rebates on taxes after meeting certain benchmarks.

Monday’s approved agreement extends one dating back to 2009. The Cleveland plant didn’t receive tax rebates as part as part of the previous deal, according to Rowan Works Economic Development Director Robert Van Geons. Daimler made the required improvements, but older, depreciating equipment meant the company couldn’t meet tax value standards, Van Geons said.

With Daimler representatives in attendance, Monday’s deal received praise from every county official who spoke.

Daimler’s expansion in Cleveland would be for a new vehicle logistics center. The company isn’t projected to directly create any more permanent jobs as a result of the expansion. However, Daimler agreed to increase it’s minimum job retention requirement from 695 to 1,500. The company’s total employment routinely fluctuates, but is about 2,800.

The incentive agreement approved Monday lasts until 2023. It’s projected Rowan County would receive $63,000 per year during the five-year period. Rowan would return $189,000 in tax revenue to Daimler.

Commissioner Craig Pierce made a motion to approve the incentives. It was seconded by Commissioner Judy Klusman. It passed without opposition.

County commissioners rhetorically quizzed Van Geons about economic facts related to the Cleveland plant to show the beneficial effect of the expansion and the company’s presence in Rowan County. Responding to questions, Van Geons said he hasn’t seen a company that is more positively beneficial to Rowan County than Daimler’s plant.

“Theres no project I’ve modeled in my years here that positively impacts the community more so than this one,” Van Geons said.

For every job created by Daimler in Cleveland, Van Geons said there’s 0.98 jobs created in the community.

“For us here it’s almost one to one,” he said.

In a short statement before his vote, County Commissioners Chairman Greg Edds focused on the fact that the additional investment by Daimler creates tax revenue without any burden on government services.

“If you take the amount of money they’re preparing to pump into our economy locally, $37.95 million, it would take 304 middle class homes to pay the same taxes as what they’re going to,” Edds said. “When we build 304 homes, those usually come with people and children. And, those aren’t bad things because I like people and have children, but those people and children require further services — schools, roads police.”

Edds said the tax revenue gained by Rowan as part of the Daimler expansion could be used to help invest in various services provided by the county, such as schools.

Contact reporter Josh Bergeron at 704-797-4246.

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