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Tire wholesaler won’t build Portage facility yet

January 22, 2019
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An Ohio-based tire wholesale company still plans to buy land this year for a 50,000-square-foot distribution facility in Portage’s industrial park, but doesn’t plan to start building for a year or so.

That news raises concern from city officials, who had counted on a year’s worth of proceeds from the struggling Tax Increment Financing District No. 4 to generate revenue sufficient to pay for a road and utilities project to serve the new business.

Steve Sobiek, the city’s director of business development and planning, said the “increment” — an increase in property tax revenue stemming from increased valuation traceable to the development — wouldn’t become reality until a year later than expected.

City Administrator Shawn Murphy told the Portage Common Council’s Finance and Administration Committee recently that this might necessitate re-evaluating how much road work in the area the city can afford.

The plans for K&M Tire of Delphos, Ohio, to buy a little less than seven acres of city-owned land for a distribution center were announced two months ago to the city’s Plan Commission.

K&M had issued a letter of intent to pay the city $20,000 per acre for the land, which is located just south of the Portage Enterprise Center at 1800 Kutzke Road.

Part of the deal, however, was that the increment stemming from the development would help pay for a $430,000 infrastructure investment needed for the distribution center — a project that would entail extending Mohr Road west from Boeck Road, and adding water and sewer lines.

Kevin Schnipke, director of real estate from K&M, said the company still intends to buy the land this year. Closing the sale could happen soon, he said.

However, he said, company officials never intended to start building the facility immediately.

“We may take a year before we begin construction,” he said.

Nonetheless, Schnipke said, K&M officials remain committed to locating in Portage, for several reasons — one of which is the city’s location on three interstate highways.

He also noted that Portage has been “welcoming” and Sobiek has been accommodating — including suggesting construction firms that might be available to build the facility when the time comes.

“Some of these smaller communities are really easy to work with,” he said.

K&M sells tires to retailers; it does not sell directly to consumers.

In November, Sobiek said the new business would initially create eight to 10 jobs. There had been discussion of an expansion at a later, undetermined date that would double the facility’s size.

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