Tuesday, April 13, 2004

LabOne deal will cut taxes

Some breaks linked to promises of employment

By Gregory Korte
The Cincinnati Enquirer

Cincinnati City Council will vote Wednesday on a scaled-down package of tax incentives for LabOne Inc. in an effort to keep the medical testing company from moving to Northern Kentucky.

The new deal is worth $2.6 million - less than the $3.1 million package originally proposed. That's because the company has decreased its 10-year job growth estimate from 500 to 400. The Kansas-based company already employs 562 people in Cincinnati.

But even if City Council approves the deal, LabOne has not committed to staying in Cincinnati. Kentucky is offering LabOne a 10-year, $2 million tax incentive plan if the company moves to Boone County.

Mayor Charlie Luken remains optimistic that the city's tax incentives will keep the jobs here.

"It meets all the right demographics of what we should be trying to keep."

The city's proposal would locate LabOne's new operation on a 10-to- 20-acre site in the Tech Solve Business Park in Bond Hill. The city would grant a 75 percent property tax abatement for up to 10 years on the real estate, equipment and inventory. The total value of the property tax break is $525,000.

The company also would get a 75 percent job creation tax credit on the 400 jobs created - meaning that the city would refund the company 75 percent of the earnings taxes paid by those new jobs.

But unlike the previous proposal, that 75 percent tax credit would be rolled back to as low as 40 percent if the company doesn't create at least 360 jobs. Finance Committee Chairman John Cranley said that makes LabOne more accountable for its job creation promises.

The state of Ohio has already pledged comparable tax breaks worth $4.1 million.

LabOne bought the medical testing division of the Health Alliance for $38.5 million last year and needs to relocate from its home at the former Jewish Hospital in Avondale.


E-mail gkorte@enquirer.com

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