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Clawing back a $150,000 jobs grant is the right thing for Brooklyn to do. But will JobsOhio claw back its $420,000? And why the secrecy over that JobsOhio grant? Editorial

February 3, 2019 GMT

Clawing back a $150,000 jobs grant is the right thing for Brooklyn to do. But will JobsOhio claw back its $420,000? And why the secrecy over that JobsOhio grant? Editorial

For the more than 160 workers then employed at the plant, for the city of Brooklyn, Ohio, and for the Cleveland area’s storied history of garment-making, the arrival in 2015 of a high-end men’s suitmaker to take over the closing operations of Hugo Boss AG in Brooklyn was fortuitous.

Keystone Tailored Manufacturing LLC, formed by the W Diamond Group of the Chicago area, not only stepped up to take on the skilled workforce who had labored long and hard to keep their jobs in Brooklyn, but also pledged to upgrade the facilities as it brought its made-in-America Hart Schaffner Marx suits line and other items to Ohio. 


The acquisition was greased by generous grants -- $150,000 from the city of Brooklyn to retain and create jobs and payroll; a $420,000 economic development grant from JobsOhio, also apparently tied to job and payroll goals; and an offered $650,000 Cuyahoga County loan, which a county official told reporter Olivera Perkins the company never completed the paperwork on. 

Brooklyn’s grant had specific conditions, however: Keystone had to retain 172 jobs and create 20 more jobs by 2019 and another 20 by 2021. And the company had to maintain those jobs for at least 10 years. The company also agreed to maintain the firm’s $4.6 million annual payroll, and increase it to $5.7 million by 2021. 

With Keystone’s Jan. 10 “WARN Notice of Plant Closing” to the Ohio Department of Jobs and Family Services -- informing the state of its intention to close the plant no later than March 11 and lay off all the 140 workers now employed there -- the city of Brooklyn has determined that Keystone will be in default of those terms. The city has also started the process of trying to claw back the full $150,000.

Keystone officials did not return a call seeking comment.

Brooklyn officials readily provided the editorial board with a copy of the city’s Jan. 15 ten-day notice of breach to Keystone, and of the amended June 9, 2015 Job Creation/Retention Grant Agreement with the firm.

But what of JobsOhio’s grant? Three weeks after Keystone’s formal WARN letter to the state, JobsOhio still won’t say whether it will seek to claw back all or some of the $420,000 grant. 

“We do not comment on active company discussions,” JobsOhio spokeswoman Renae Scott said via email Wednesday, adding, “however I can confirm we are engaged with Keystone Tailored Manufacturing to discuss next steps.”


When asked for terms of the grant, Scott referred our editorial board to a June 2015 summary chart of grants that month, which shows that the $420,000 grant would support Keystone’s creation of 20 jobs and added $600,000 annual payroll, the retention of 150 jobs and a fixed investment of $6 million.

It’s not clear why the JobsOhio grant’s job-retention numbers were so much less than those cited in the city of Brooklyn’s jobs grant. 

Scott refused to provide the actual terms of JobsOhio’s executed agreement with Keystone, saying in a voicemail message that “JobsOhio is not an agency of the state. We’re a private nonprofit. As a private nonprofit we are exempt from the Ohio public record laws.”

Given that JobsOhio’s budget is indirectly underwritten by state liquor monopoly profits that support the bonds that provide JobsOhio with its revenues, it’s arguably a quasi public-private entity. It owes Ohioans more transparency.

But yes, in 2013, the Ohio Supreme Court determined that the Ohio legislature specifically exempted JobsOhio from most public records law -- shamefully so. The agency, it appears, isn’t required to release more on its incentives, or how it enforces them, than the monthly charts and whatever is mentioned in the public version of its tax returns that a private accounting firm releases.

That’s wrong. Ohio citizens deserve to know, at a minimum, how JobsOhio frames job-creation and retention requirements in its grants and how it enforces those requirements. 

Kudos to the city of Brooklyn for seeking to enforce terms of its jobs grant to Keystone and claw back its citizens’ money. JobsOhio, which provided nearly three times as much money, should do the same -- and if its deal with Keystone doesn’t give it the same power to claw back that money, it owes the taxpayers an explanation for why not. 

About our editorials: Editorials express the view of the editorial board of cleveland.com and The Plain Dealer -- the senior leadership and editorial-writing staff. As is traditional, editorials are unsigned and intended to be seen as the voice of the news organization.  

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