Had North Star Bluescope Steel accepted an annexation offer made by the Village of Delta during tax abatement negotiations, the Pike-Delta-York school district would have lost over $4.5 million in donations over the next 10 years.
PDY Superintendent Ted Haselman said an annexation would have been problematic for both the schools and the community’s taxpayers.
“In our opinion, the village is attempting to take donations that would have been paid to the school district and wipe them away from our local residents,” he said.
North Star recently negotiated an agreement with Fulton County commissioners to receive a 10-year tax abatement for the plant’s $700 million addition, currently under construction and to be completed by late 2021. In turn, the steel plant will make annual 50% donations for the term of the abatement to PDY schools, Fulton County, and several other entities.
Additionally, the school district will receive a separate 10% donation for the duration of the abatement. In total, PDY schools will reap $451,530.28 a year from the agreement.
What could have negated those donations is Delta’s pre-1994 Community Reinvestment Area program. It would have granted North Star a 10-year tax abatement agreement with the village without the obligation of donations. Instead, North Star employees would pay an income tax to the village.
Delta included that agreement as part of its offer to annex North Star after the plant’s recent abatement negotiations with the county reportedly stalled for a time.
“The Village is aware of and appreciates the company’s efforts to expand…” a letter from Village Administrator Brad Peebles to North Star reads. “As such, we want to assure the North Star leadership we will work diligently to ensure your corporate success in Delta, providing long mutual benefits to all concerned.”
Had North Star chosen to annex to Delta rather than opt for the county’s deal, neither PDY schools or any of the other entities named in the county’s agreement would have received annual donations. Haselman said that would have been damaging to the school district, since without the donations it would have to rely on levies.
“Any additional dollars to run the school district has to come on the backs of our residents,” he said. “When the donations come to the district, we don’t have to go to our taxpayers for a levy. We were very fortunate to negotiate with North Star and come to an agreement without the village trying to hinder the process.”
Haselman said the school district has discussed its financial needs with Peebles numerous times, “and it continues to fall on deaf ears as to how (the abatement) impacts our local school district. When the village got involved it definitely decreased the leverage the school district had in negotiating a donation agreement with North Star.”
PDY schools negotiated the added 10% donation from the steel plant because their board of education believes abatements should be used to entice businesses to locate to the village, Haselman said. “When the business is already here they believe they should be paying their fair share of taxes,” he said.
He said the added donation will be used to offset North Star’s abatement deal and the community’s taxes.
Neither Peebles or North Star returned calls for comment.
Reach David J. Coehrs at 419-335-2010