The Spire deal is finally, mercifully, signed and sealed after two years of debate, stop-and-start negotiations and the imminent threat the deal could collapse any moment. But, in the end, Ron Clutter will pay $3.9 million through 2026 to cover back and future taxes from 2010 to 2026 — with the 2018 payment already in the hands of local attorney who was set to deliver after the deal was signed Nov. 9.
In the end, like with all compromises, no one seems particularly happy with the deal.
Geneva Area City Schools Board of Education
The school board, which as the taxing entity receiving the largest chunk of money from Spire’s owner Roni Lee LLC was tasked with negotiating the deal, held their noses and voted 4-1 in favor of the agreement almost entirely based on the deal being tied to the usage agreement that allows Geneva students to use the facility for free.
School board members know — and said as much publicly — that the time is near to discuss the future home of Geneva athletics. It is understandably daunting for a district that fought hard to pass an operating levy earlier this year to face the prospect of generating hundreds of thousands of dollars for a new football stadium in the coming years, but that is the reality.
Assuming Spire is still open and operating through the length of the agreement — and given we now know it has yet to turn an operating profit that is not a slam dunk assumption — unless there are drastic changes it seems unlikely the Spire and school district partnership would continue beyond 2026. The time to start preparing for that future is right now.
For many in Ashtabula County, no deal in which Clutter saw a significant tax break was going to be acceptable or satisfying.
Clutter and the Spire board unfortunately burned many bridges with the public dating back to the facility’s construction and the way many contractors were treated and continuing through the negotiations last year. Then this fall, following the Board of Revisions ruling decreasing the facility’s valuation from $54 million to $13.5 million, Clutter sought to reduce the total amount paid in the agreement from $3.9 million to $2.1 million. While Clutter wisely backed off this request when it was clear the school board was holding firm, this move did not endear Clutter or Spire to the public any further.
But, we should point out, the deal is a payment in lieu of taxes agreement that will spare other businesses in the same taxing districts as Spire from seeing a 7 to 8 percent spike in property taxes that would have come based on the facility’s decreased valuation.
We should thank Commissioner JP Ducro for his work on this project — which he said was the single issue that has taken the most of his time over the past two years. Ducro served as liaison and often intermediary between Clutter and the school board. He also heard from the public, whether at meetings or simply when out and about. While that is Ducro’s job as commissioner, it is a mostly thankless task because, as we’ve laid out, no one is thrilled with the deal and Ducro heard from all sides.
Spire and Clutter
While many think Clutter shouldn’t have gotten any deal at all, he certainly did not get the deal he was aiming for. First, Clutter sought to cut the total amount paid to $2.1 million in September. And, as Ducro has pointed out repeatedly, while the deal would have amounted to a 75-percent, 17-year tax abatement on the original $54 million valuation, at $13.5 million it is a significantly smaller tax break — and much less than Clutter would have received had he requested an abatement prior to construction, though as we’ve said there is a price to be paid for such miscalculations.
Spire is also struggling financially. A California appraiser said the facility is too large and tries to do too much for what — and where — it is. It does not, nor has it ever, made money. The only feasible path to profitability, according to the appraiser, would be a vast increase in students — but the trend has been a steady decrease.
We can all hope the massive free advertising Spire has received in the wake of LaMelo Ball’s enrollment will spark an increase in students — but hope is all it is right now. We believe firmly that, in the wake of the significant tax break granted to Roni Lee LLC, the Spire board owes the public a plan for increasing profitability. Had they sought the tax abatement at the beginning, officials would have been required to outline a business plan, projected employees, path to profitability in order to qualify.
While this abatement is retroactive, and already signed by all parties, we still think it is the right thing for the Spire board to do, and something that would be well-received. We believe the public, which has now invested in the facility through tax breaks, deserves this insight in the wake of this imperfect agreement, and while the board has not always been forthcoming with such information there is never a better time to start than now.