Local business up and down
- Published: April 14, 2011
This is the third in a series of articles seeking to provide information relevant to the May 3 Village property tax levy renewal. This article looks at recent gains and losses of local businesses; an article next week will address Village Council’s efforts toward economic development.
Though it is difficult to predict the future of the Yellow Springs economy, the subtle job loss and flat tax revenues to the Village over the past decade indicate that the Village budget will continue to be tight in the coming years. Smaller businesses in the village appear to be weathering the recession, but Yellow Springs is still feeling the effects of the decline of several of its major employers. And while the potential for business expansion does exist, it is difficult to predict how much and how quickly existing businesses will be able to grow and new businesses will be able to establish themselves here.
One way to raise revenue is to renew the Village’s five-year property tax levy, which villagers will vote on at the polls on May 3. Growing new and existing businesses in the village is another way to increase revenue for the municipality. But how strong is the local business sector and how likely is it to expand in the immediate future?
Where are the jobs?
The Village budget has suffered for years from flat to declining Village income tax revenues. Income taxes currently provide nearly 50 percent of the Village’s general fund budget. Over the past seven years, the Village received in income taxes:
• $1.41 million in 2004,
• $1.30 million in 2005,
• $1.25 million in 2006,
• $1.35 million in 2007,
• $1.41 million in 2008,
• $1.25 million in 2009, and
• $1.25 million in 2010.
The decline in income tax is linked to a loss of local jobs over the past decade. During that time, the village lost about 500 jobs due to a reduction in workforce at Vernay Laboratories, the Antioch Company, Antioch College and Wright State Physicians. That number is reflected in the U.S. Census bureau’s North American Industry Classification System data, gathered every six months through IRS data and a biannual survey of businesses in the 45387 zip code. In 1998 the village area had a total of 2,854 jobs. But in 2005, which is after some of the reductions occurred, the area logged 2,351 jobs. The most recent NAICS jobs data for 2008 showed an increase with 2,676 jobs around the village, which may be due to an increase in the number of smaller and medium-sized businesses the News reported on last year.
According to NAICS, the number of healthcare and social services businesses in 45387 increased from 15 to 20 establishments, while accommodations and food services went from 13 to 20 and “other” services went from 13 to 18. Because the data is calculated by zip code, it includes Young’s Dairy, which employs about 200 people for most of the year, and Morris Bean, whose spokesman Bill Magro did not return calls. According to online business profiler Manta, Vernay employs from 50 to 100 people. Neither business pays taxes to the Village, although Morris Bean contributes to the local schools.
Of the village’s largest employers, the biggest income tax contributor is YSI, whose business profit and employee withholding taxes generated $215,000 last year for the Village, according to data from the Regional Income Tax Agency. Antioch University with 72 full-time employees and over 100 part-time faculty at the university and Anitoch Midwest provides about $100,000 in income taxes to the Village. The local school district with about 80 full and part-time employees generates $70,000 for the village, and the Greene County Educational Services Center with between 50 and 60 employees generates $53,000. The Antioch Company, with about 39 employees, pays about $51,000 in profit and withholding taxes.
Friends Health Care Association, which employs 89 full and part-time people, and Vernay Laboratories are sixth and seventh on the list, each contributing a little over $30,000 in income taxes. The Village of Yellow Springs has 27 full-time and 47 part-time employees and generates $30,000 in income taxes, while ADP TotalSource III, a human resources, payroll and tax data processing company, generates $26,000. The list of the top 25 income tax contributors for 2010 also includes Apple Computer, Inc., Anthrotech, Electroshield, The Winds Cafe, E-health Data Solutions, Miami Valley Educational Computer Association, Central State and Wright State Universities, Weaver Supermarkets, Ertel Publishing, Yiping Fang DDS, and three unnamed individuals.
The potential for growth
The potential for attracting new businesses and expanding existing ones in Yellow Springs is mixed. Work to make the Center for Business and Education a full and active business park is progressing, and plans are in place for the groundbreaking to start in early 2012, according to Kathryn Van der Heiden, chair of the Community Resources group that owns the CBE. CR recently signed a contract with Synergy, a Dayton area developer of small and large business properties, which will market the Yellow Springs property over the next two years. The Village has also annexed the right of way to allow a new turn lane for traffic coming to the park off of Dayton-Yellow Springs Road. Once the zoning changes from agricultural to industrial, and some kind of structure is ready for tenants to move in, the Village will start collecting a miminum property tax of about $10,000, Van der Heiden said. Future CBE tenants will also add to Village income tax revenues.
“We’re excited about the prospect of getting this off the ground,” she said.
But the Village has a more immediate need than the CBE can affect to balance its budget. Looking at the businesses that already exist, YSI has grown to 160 employees and $100 million in annual sales, its highest profit since it started in the 1950s. The company has recently announced its intention to partner with another firm, a situation which is difficult to predict and could mean growth or decline for business in the village. While Antioch College is rebuilding from its closure in 2008, it expects to take about four years to add about 50 faculty and staff jobs to the 30 currently employed on campus, the News reported last month.
MillWorks Development, Inc. has supported a steady number of smaller businesses in its flexible 10,000 square feet of enclosed space on Walnut Street, co-owner Ellen Hoover said last week. MillWorks currently leases to about 13 tenants and has not had a problem filling the space since she and her husband Rod bought it in 1992, largely due to their competitive prices and willingness to work with tenants to design the space around their needs, Ellen said.
Glen Courtright came to MillWorks in 2009 with his business Enviroflight to research and develop new technology to produce sustainable aquaculture feed and specialty plant fertilizers. He is now considering options for expansion and can see several possibilities in Yellow Springs, he said this week. Three other businesses that have expressed the need for the kind of space that MillWorks offers include a distillery business, as well as a local microbrewery outfit and a retail and assembly business, Yellow Springs Chamber of Commerce Director Karen Wintrow said last week.
According to Wintrow, “there is always much more demand for businesses space than Yellow Springs has to offer.”
Several existing businesses in town have expanded recently, including Electroshield, Anthrotech and E-Health Data, and in the downtown area, King’s Yard businesses Rita Caz and Tibet Bazaar have expanded into larger spaces as well. Downtown retail spaces don’t stay vacant for long, Wintrow said. And despite the recession, businesses are holding steady with some, such as Peach’s Grill and Young’s Dairy, doing better than the previous year, she said.
Still, the Village Station proposal for finished business space on Dayton Street next to the Bryan Community Center has not yet been started because local developers Ted Donnell and Matt Arnovitz have not been able to secure prelease agreements for over 50 percent of the space, Donnell said last week. The delay on the plans, which were originally approved by the Village in 2007, is largely a result of the slow economy, Donnell said.
A story in next week’s News will include efforts that the Village Economic Sustainability Commission and the Village economic sustainability coordinator have made to support a healthy business environment in Yellow Springs.