RELATED: Silfex picks Springfield for 400 new jobs due to labor market
The company provides silicon products for a variety of markets, said Tom Franzen, Springfield assistant city manager and director of economic development.
“It’s tremendous,” Franzen said. “It’s an industry that’s so different from what we already have in our community. From that standpoint, that’s one of the real differences for this project. It’s one of the first times we’ve been able to attract a key technology-related industry that we think will help further diversify our economy.”
The city of Springfield also plans to spend about $215,000 to purchase the property next to the plant on Titus Road as part of the tax incentive agreement, according to public records obtained by the Springfield News-Sun. Silfex has no immediate plans for the adjoining property, but wanted to secure it to minimize any chance of others developing around their site, he said.
“The building they’re acquiring has more than enough square footage for their immediate plans and future growth as well,” Franzen said. “It’s a long-term growth option for the company.”
The deal calls for the city to give back to the manufacturer 40 percent of the local income taxes paid by Silfex, based on the number of employees hired annually. The city’s incentives, including the property purchase, could provide Silfex a total of about $1.2 million between 2019 and 2023 if it hires 400 employees as early as 2019, Franzen said.
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Springfield city commissioners were expected to vote on the incentive agreement at Tuesday night’s meeting. Silfex didn’t return messages seeking comment.
The Ohio Tax Credit Authority also has approved an incentive package for the company. That deal is for 12 years and will give an about 2 percent credit on its Ohio employee payroll taxes. The company would be required to maintain operations in Springfield for at least 15 years to qualify for the incentives, according to public records.
Ohio officials estimated the value of the state tax incentives at just shy of $5 million, if all requirements approved by the state tax credit authority are met. The actual value of the tax credit is based on the number of jobs created and new payroll tax generated, according to information from the Ohio Development Services Agency.
Silfex was founded in Preble County and builds silicon components for a several industries, including everything from computer processors to cell phones to cars. The firm also grows silicon crystals at its existing plant in Eaton and will perform similar functions in Springfield.
The company plans to conduct most of its hiring locally throughout next year and begin production at the Titus Road plant in the first quarter of 2019. The bulk of the initial hiring will be for skilled manufacturing jobs, including machine operators. It will also look to hire engineers, information technology specialists and support staff, including human resources positions and supply chain staff.
A second phase, in which the company ramps up its silicon crystal growing operation in Springfield, would likely begin in 2020.
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Company leaders have previously said annual payroll locally would be about $20.7 million. Pay will vary depending on the job duties but said it would average about $53,000 a year, including benefits.
“They’re great jobs that pay a great wage,” Franzen said. “We think it’s good for people in the community and will help us attract new residents to the community as well.”
Midwestern cities are being told they’re being left behind when it comes to cutting edge technology, Springfield Mayor Warren Copeland said.
“This is a major breakthrough in the kind of business,” he said. “We think it’s a great breakthrough for Springfield.”
The increased tax revenue will help the city, Copeland said, while residents will have an opportunity for high-paying jobs.
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“That’s a primary driver of the health of the community,” he said. “Anytime Springfield can get jobs like this, it’s great for the community. We hope that a good number of (Springfield residents) will be able to get jobs there.”
Any business that comes to Springfield is good business, longtime Springfield resident T.J. Miggo said.
“It’s better employment, more taxes, more buildings, better streets, better everything,” he said.
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By the numbers
$223 million: Company's expected investment in Springfield
400: Anticipated jobs in Springfield by 2020
$20 million: Silfex's expected annual payroll
Staying with the story
The Springfield News-Sun has written extensively about Silfex’s plan to bring 400 jobs to the community since it first broke the news this summer.