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Thursday, August 29, 2002

County continues Brush Wellman tax abatement

Retaining business


Staff writer


PORT CLINTON -- Though the number of Brush Wellman's full-time workers are down, there were still enough to retain a tax abatement for another year on $100 million in real and personal property.

Ottawa County commissioners agreed Tuesday to continue the Elmore plant's tax abatement for another year because it slightly exceeded the employment requirements.

The 10-year, 100 percent tax abatement dates back to 1996 and the agreement required the company to retain 85 percent of its workforce, which at the time was 634 full-time and 15 part-time employees.

That meant the magic number each year is 538 full-time and 13 part-time employees, said Walter Wehenkel, the county's enterprise zone manager. Wehenkel is also the county's regional planning director.

At its peak in 2001, Brush Wellman had 838 full-time employees. By mid-2002, however, that number had dropped to 578.

And though it was a drop, today's figures are still 40 workers above the magic number.

Plant Manager Art Pepper told members of the Tax Incentive Review Board -- which examines the county's tax abatement agreements yearly -- that it is unlikely the company will have to cut additional employees this year.

About 200 of the 260 cuts were lost through layoffs, and 106 of those laid off still retain recall rights.

Brush officials have said in the past the reason for the economic decline was the demise of the telecommunications industry.

The company used to rely heavily on military contracts, but now that only makes up about 5 percent of the Elmore plant's production.

Instead, it is focused on products for the automotive and telecommunications industries -- which up until last year were seeing an economic boom.

Now, though, the Elmore plant is producing about 40 percent of what it's actually capable of, and cutting costs to stay stable.

Brush Wellman uses beryllium and other metals to create products for various industries.

Beryllium in its dust form has been known to cause those sensitive to it to develop chronic beryllium disease, a sometimes fatal lung affliction.

During Tuesday's commissioners session, the board also agreed to continue two abatements for Chipmatic, a tool and machine shop in Elmore.

That company has an agreement dating back to June 1995 for a 10-year, 100 percent abatement on real and personal property at a total of $652,430. A second agreement, signed in 2001 provided 100 percent abatement on real and personal property totaling $3.45 million.

Job creation was a requirement for both abatements, and for the 1995 abatement, eight new jobs were required. The company fulfilled that promise and employs 59 full-time workers and three part-time employees.

The terms of the second agreement were that half of an expansion project would be finished by the end of 2002, and that project hasn't even started, Wehenkel said.

Mike Detzel of Chipmatic asked the review board if the terms could be amended to allow for additional time to complete the expansion, which commissioners granted in their resolution.

The present economic conditions were slowing down the company's expansion plans, Wehenkel told commissioners.

Also, Detzel asked that the donation agreement to Woodmore Local Schools be adjusted to delay payment until the work is started.

"Mr. Detzel felt that the negotiation process clearly identified these conditions needed to be flexible and that the agreements should have reflected that fact," Wehenkel wrote in his recommendation to commissioners.

Commissioners also terminated an abatement with Machining Technologies, an Elmore company that moved the equipment that had been abated to South Carolina.

The company still has about 55 employees at the Elmore facility, but now has the machinery it based its 1996 abatement on in the southern state.