North Canton Economy Recovering From Hoover Plant Closure

By the time the recession hit, North Canton had already suffered a devastating blow: the closure of the Hoover plant.

With it went nearly 2,400 jobs and 18 to 22 percent of city revenue.

“In 2007 we saw pretty much the bottom, but in 2011 we’re starting to recover with the income tax,” Finance Director Karen Alger said. “I’d say overall we’re watching our numbers throughout the past and currently, too. We’re just doing cuts where they need to be, making evaluations and being more efficient with what we have.”

Total income tax revenues for the past four years were:

• $5.65 million in 2008
• $5.46 million in 2009
• $5.36 million in 2010
• $5.94 million in 2011.

The city has collected $3.88 million as of July 31, 2012, and officials projected $5.5 million in total revenue for the year.

“We suffered earlier, and we’re on the way back,” said Eric Bowles, director of economic development. “The city right-sized its operations by cutting employees through attrition, so we decreased our workforce and increased our efficiency levels as much as possible in order to cut our costs during that period of time.

“For those reasons, plus our aggressiveness in bringing new companies and working with developers to bring new companies into the community, we started growing again,” Bowles said.

Since late 2008, Bowles said the city has been working to redevelop and repopulate the Hoover District. The former manufacturing facility is 1.44 million square feet under roof with approximately 25 to 30 percent occupied. City officials are working with several companies to help relocate them into the district.

“Currently, what’s been helping our recovery is we have approximately 11 businesses that account for 1,500 new jobs in the city of North Canton,” he said. “We added those jobs in our community even though we had a recession, and we worked very aggressively with that.”

Some are new jobs, while others moved from other communities. All those jobs have pumped almost $400,000 in new city income tax revenue into North Canton. That’s good news for the city, as the majority of income tax revenue comes from employee paycheck withholdings.

This year, 45 percent of the city’s general operating fund will come from income taxes. Last year, the city’s general fund was about $9 million.

“I think the Hoover District has offset some of that,” Alger said. “I’m still seeing an increase in the income tax, but I think we would’ve seen more if had we not lost some of the smaller businesses.”

Alger said she’s projecting 2013 to stay at status quo.

“At the time when I did the projections, we were losing some small businesses but gaining in the Hoover District, so it was kind of back and forth,” she said.

The city’s income tax ordinance mandates 0.3 percent of the first 1 percent tax rate (after paying all costs associated with the collection of the income tax) be used for capital improvements and 0.7 percent of the first 1 percent be used for general operations. The remaining 0.5 percent may be used for either general operations of the city or capital improvements, such as street paving or other infrastructure work.

As far back as 2006, the city has used only the minimum requirement for capital improvements as general operations costs have outpaced income tax collections. The city has turned to other sources of financing such as capital leasing, grants and zero interest loans to pay for new equipment and complete road, curb and gutter improvements.

The economic development and engineering offices have been awarded more than $19 million in grants for infrastructure projects such as installing new water lines, repaving roads and widening Main Street.

The goal is to make improvements that will attract new businesses to North Canton, including the 17 acres of office park at Waterside Drive. City officials envision filling the park with research and technology companies. When the city finished paving the road to access the land, the recession was at its highest, so the land has been unoccupied. Bowles said he’s seen more interest in the space in the past six months than in the past few years.

“With the new and more diverse companies in the Hoover District, the city’s economy becomes more diverse, and it should be able to withstand future downturns inasmuch as we’re not completely dependent on one company like Hoover,” Bowles said.

Editor’s Note: In this series, Patch gauges the recovery of 18 Ohio communities based on income tax receipts since the Great Recession. Read about