Fiat Chrysler Automobiles wants to build a $23 million vehicle customization facility at the former Textileather and MedCorp properties in North Toledo to support its Jeep Wrangler and Jeep Gladiator production at its nearby Toledo Assembly Complex.
Mayor Wade Kapszukiewicz announced a pending purchase agreement with FCA on Friday and said he will present legislation to Toledo City Council next week to authorize the sale and redevelopment. The administration wants to sell the property to FCA for $1, “as an incentive for FCA’s proposed investment,” a news release said.
The company plans to build a 250,000-square-foot facility to be operated by a supplier employing more than 300 people, the release said.
“This is another major economic development win for Toledo, which is already benefiting from the redevelopment of the former Southwyck Shopping Center property in South Toledo, the Overland site, the Ironville property, and the Marina Lofts Toledo development,” Mr. Kapszukiewicz said in the release.
In exchange for the reduced sale price, the city intends to authorize a tax increment financing for the property prior to the sale. That will allow any increase in property tax revenue from the redevelopment to fund public improvements.
“The city will use the economic development tool to recoup its $6.8 million investment into the site over a period of time. No other incentives are being offered by the city of Toledo,” according to the news release.
FCA also will provide the city with a conditional buy-back option, which would allow the city to purchase the property for $1 in the event that the automaker has not developed the property for a vehicle customization facility within four years.
“The iconic Jeep brand has a special connection and history with Toledo and all of its residents. We appreciate the city council’s consideration of this proposal and would like to thank the city of Toledo and the mayor’s office for all of their efforts,” FCA spokesman Kevin E. Frazier said in an email. “At this time, we have no further details to provide.”
Bruce Baumhower, president of UAW Local 12, which represents about 6,000 employees at the assembly complex, said he is “thrilled” with the announcement. He said the market for Jeep customizations such as bigger tires, bigger roll bars, different lights, customized running boards, and logo or customized paint jobs is growing rapidly, and soon that work can happen just across the street.
“It’s great for our community, and I think it’s a tribute to hardworking men and women in northwest Ohio and especially at the Jeep plant. It tells other companies that this is a good place to do business because we have a good workforce,” Mr. Baumhower said.
Textileather Corp. manufactured vinyl fabric in North Toledo for the automotive industry for decades until the company closed its doors in 2009, laying off hundreds of workers. The adjacent property utilized by MedCorp, an emergency ambulance service provider, closed in 2013.
That left two industrial buildings available for redevelopment.
City leaders knew the Toledo Assembly Complex had limited space to grow, which became an issue when the automaker began exploring how to expand or relocate its Jeep Wrangler production to meet growing global demand. So in 2014, under late-Mayor D. Michael Collins, the city began acquiring property for an incentive package to persuade FCA to continue building its Jeep Wrangler in Toledo.
The city bought the Textileather site for $738,000 and then spent $1.6 million on demolition and environmental cleanup. It also purchased the former MedCorp property for $1.37 million.
Paula Hicks-Hudson, who took over as mayor when Mr. Collins died, shepherded the purchases through city council. Ultimately, the city was able to put together a 40-acre site ready for development.
While FCA did not need the property then, as the automaker opted to move its Jeep Cherokee production out of Toledo in order to build the next-generation Wrangler, city officials believe the investment was a smart move.
“I think this shows the city was proactive, took a risk to assemble this, and today it’s paying off,” said Brandon Sehlhorst, the city’s commissioner of economic development. “If we’re not ready with a site, then we’re going to miss out on these opportunities.”
He added that private entities don’t have as much incentive as public entities do to acquire former industrial sites that are going to cost more to fix up than they’ll ultimately sell for. The city took out a bond, which amounts to about $6.8 million with interest, to buy the site, demolish existing structures, and remediate environmental issues, yet the land appraised at just over $2 million this year.
“So there’s a gap there of about $4 million, and in the private sector they would never do a deal like this. That’s why these properties don’t sell,” Mr. Sehlhorst said. “We’re going to get our money back, it’s just going to take longer.”
He estimated it will take about 12 years to recover the city’s investment through property and income tax revenue, though the city will have bond payments for 20 years. Mr. Sehlhorst said the TIF revenue will cover the annual debt service, which is about $313,000.
Toledo City Councilman Rob Ludeman, who supported the city’s move to acquire the parcels six years ago, also said the land would be unusable if local government hadn’t stepped in.
Back in 2014, city officials discussed adding the city’s fleet and facilities operations just west of the Textileather land to the package for FCA, but the company did not need it then and do not need it now, Mr. Ludeman said.
“It’s going to be a big boost to the economy as far as the number of jobs,” he said. “Plus it keeps the Jeep brand more solidified in Toledo in the fact that they’re going to customize units for people all over the country.”
First Published December 18, 2020, 3:07 p.m.
