The city will give Hinkley Inc. a 15-year, 100% tax break on its new distribution and office building planned as part of a $10.7 million expansion project along Pin Oak Parkway.
In return, the decorative lighting and ceiling fan company will retain 24 customer service, marketing and IT jobs it could have taken to Nevada or Utah for its Regency Ceiling Fans division, said Avon Lake Director of Economic Development Ted Esborn. Hinkley also will create 20 administrative and warehouse jobs within the next five years.
City Council adopted the deal 7-0 at a Jan. 21 special meeting.
“Hinkley has been a good corporate citizen since moving to Avon Lake, and I’m looking forward to continuing that positive relationship with them,” Mayor Greg Zilka said. “We appreciate Hinkley proposing to expand here.”
Hinkley plans to expand its global headquarters and add a 100,000-square-foot distribution warehouse and office space building at 33000 Pin Oak.
The 98-year-old family-owned company needed to expand to accommodate new business created by the acquisition of Regency Ceiling Fans last year, according to information from the city.
Lumin-Avon Lake, the land-holding entity of Hinkley, will buy about 15 acres for $600,000 from the Klingshirn family (owners of Klingshirn Winery) near Hinkley’s campus, according to information from the city. The property is along the north side of Pin Oak between State Route 83 and Moore Road.
Hinkley’s project includes $6 million in construction for a one-story distribution warehouse and office space building, $3.5 million in inventory, $500,000 in furniture and fixtures and $200,00 in machinery and equipment. The building is expected to be in use in about three years.
Hinkley will not pay any taxes on the new building, saving it $158,400 annually, or $2.3 million over the life of the deal.
The Avon Lake school board supported the deal. Schools typically receive about 60 cents of every dollar paid in real estate taxes.
As part of the deal, Hinkley will give Avon Lake schools $39,600 a year for 15 years, officials said. That amount is 25% of the taxes of the taxes it would have paid on the new building.
“A lot of people raise their eyebrows when they hear 100% tax break,” Avon Lake City Schools Superintendent Bob Scott said. “We come from the point of view that it’s a good company and they are going to be here a long time. It could be $39,000 a year for the next 15 years or nothing.”
He called Hinkley a good company for the city and a good partner for the schools.
Hinkley will pay the property taxes on the 14.7 acres it will buy for the new building, which is $15,600 annually, Avon Lake finance director Steve Presley said.
Hinkley will save $118,800 annually on real estate taxes for the next 15 years, or $1.18 million over the life of the deal, he said
“They plan to be shipping a lot of the fans to the western part of the U.S., and if they couldn’t do it from here, they would’ve taken 24 distribution jobs there,”
This is the 18th the city has granted since 2004. Kopf Builders Inc. has received four tax breaks or incentive packages.
Hinkley Lighting employs 124 workers with an annual payroll of $7 million, according to Jess Wiedemer, Hinkley’s president and chief operating officer.
“We’re grateful to the city for granting us the incentive package,” Wiedemer said. “We like it in Avon Lake and plan to stay here.”
Last year, the company’s workforce generated $117,000 in income tax revenue for the city, which has a 1.5% withholding tax, Presley said.
The Planning Commission approved Hinkley’s rezoning request for the property last month, Esborn said. The property had been zoned residential.
Hinkley, formerly known as Hinkley Lighting Inc., was in Cleveland until it moved to Avon Lake in 2008. The city gave Hinkley a 100% tax break on two new buildings then, but that agreement will expire in 2022, Presley said.
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