By LOU WILIN
McLane Co., which will open a $38 million grocery distribution center in northern Findlay in 2016, will avoid more than $750,000 in sales taxes by temporarily ceding ownership of the construction site to the Blanchard Valley Port Authority.
Government bodies like the port authority do not pay sales tax. So sales tax will not be levied on construction materials for McLane’s $38 million, 337,831-square-foot distribution center south of Hancock County 212 and across from Lowe’s Distribution Center.
The McLane distribution center, to supply convenience stores, mass merchants, drugstores and restaurants, will eventually employ 425 people and will pay an average wage of $57,000 per year plus benefits.
If McLane was the property owner during construction, it would pay more than $750,000 in sales taxes, said Jerry Arkebauer, consultant to the port authority.
McLane will pay for construction of the building. Then it will lease it for at least five years before buying it for $5,000 under a deal approved Tuesday by the port authority board.
McLane plans to transfer ownership of the construction site to the port authority as soon as this week and pay the port authority $100,000 for its role in the tax avoidance, Arkebauer said.
Construction is to begin soon on the building. Attempts to reach McLane for further details on Tuesday were unsuccessful.
The tax-saving arrangement is similar to one approved by the port authority in March for construction of $80 million in buildings downtown by Marathon Petroleum. That deal will save Marathon more than $2 million in sales taxes.
McLane is getting additional tax breaks and aid. The state has approved a $4.5 million package for McLane: a $3.6 million job creation tax credit and a $250,000 job training grant, and for Findlay, a $637,345 grant for a street to access the distribution center. The street will extend south from Hancock County 212, directly opposite the driveway for Lowe’s Distribution Center.
McLane will cover the remaining $112,655 of street construction expense, said Tim Mayle, assistant economic development director for the Findlay-Hancock County Alliance.
The company will pay its share for street construction from about $3 million in property tax savings it will receive over eight years from Findlay’s Community Reinvestment Area, Mayle said. The company also will pay for extension of water and sewer service to the new Tall Timbers West industrial park with its tax savings.
McLane’s tab for those public improvements, along with its contribution for the new street, will total $500,000. Those improvements will benefit other future tenants of the industrial park, which is located south of Hancock County 212, east of Hancock County 18 and north of Bigelow Avenue. McLane will occupy 88 acres. An additional 225 acres remain for industrial park development.
In addition, McLane will give $100,000 to enhance workforce development programs at Millstream Career Center.
The distribution center will be highly automated, with engineers and technical workers operating $80 million worth of machinery and equipment, said Tony Iriti, economic development director for the Findlay-Hancock County Alliance.
Wilin: 419-427-8413 Send an E-mail to Lou Wilin
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