Council overrides Finkbeiner vetoWritten by Justin R. Kalmes | | email@example.com
The Toledo City Council voted April 25 to override Mayor Carty Finkbeiner’s veto of a living wage ordinance waiver it passed earlier in the month for a proposed Costco store in West Toledo.
With the 11-0 vote [Councilman Bob McCloskey was absent], the mega-retailer will break ground June 1 on the first phase of construction for the $35 million project in the Westgate Village Shopping Center, said Liz Holland, chief executive officer of the Chicago firm that owns Westgate. She said doors could open in early 2007 on that portion of the endeavor. The second part could open by summer of that year, she said.
The move came after Finkbeiner vetoed April 23 the wage waiver council passed on an 8-2 vote 10 days earlier. Finkbeiner previously said he supported the project, but he felt incentives offered by the city were too generous and unfair to competing businesses.
Several council members told Toledo Free Press they supported the waiver because of the high level of contribution Costco offers employees for health care. While the norm for other companies is to pay between 80 and 85 percent of costs for such benefits, they said, Costco contributes 94.5 percent.
The living wage in Toledo is $10.57 an hour and is equal to 110 percent of the federal poverty level for a family of four. As part of the law, employee benefits would begin after 60 days.
Costco’s entry-level employees make $10 or $10.50 an hour, depending on the job, with benefits beginning after 90 days.
Councilman Phillip Copeland, who was absent from the April 13 meeting at which council granted the wage waiver, said he voted in favor of the veto override because he wanted to bring jobs to Toledo and because of Costco’s wages and benefits.
”I was very concerned about the living wage, but then when I looked at it, it would be hard for me to vote against [the override],” Copeland said.
Council needed nine of its 12 members to vote in favor of an override to kill Finkbeiner’s veto. It was unknown whether it would get that total because Councilman Michael Ashford and Councilwoman Taylor Balderas voted against the wage waiver when it was first passed; they changed their position at the April 25 meeting.
As part of its deal with the city, Westgate requested and was granted a 15-year abatement that allows it to pay 50 percent of the real property taxes on the assessed value of the ”brownfield” site, before remediation, that Costco will sit on. According to a document provided by Andy Ferrara, the city’s real estate manager, Westgate pays $343,179 in total taxes on real property each year. The term would save it $2.57 million over 15 years.
The second part of the agreement would allow Westgate a 100 percent abatement of the real property taxes on the increased assessed value after remediation and redevelopment of the Costco site for 15 years. Under normal enterprise zone abatements, Ferrara said, Westgate would be responsible for paying 45 percent of its real property taxes to the Washington Local School District. But because the project met stipulations of a state statute created as an incentive for brownfield remediation, the city was responsible for reimbursing the school system for tax dollars lost in the abatement. A total payment of $300,000 to be paid over a five-year period was agreed upon by the city and Washington district.
Though Finkbeiner said the project would cost the community more than $7 million of lost taxes during the 15 years of the abatement, Holland contested that figure. She said her firm’s tax incentive amounted closer to $1.5 million for the length of the agreement. Finkbeiner’s statement that Costco would directly benefit from the incentive package, she said, was inaccurate.
”Costco is not benefiting at all. Not one penny from the tax abatement is going to benefit them in their operations in Toledo,” Holland said.
Costco will pay Holland’s firm taxes so it can defray the up-front borrowing it needed to tear down the building it will sit on, she said. She estimated Costco’s tax rate would amount to about $1.50 per square foot.