Cincinnati City Council's decision to spend $2.6 million in tax incentives on LabOne Inc. is the kind of development package that makes sense in the long term.
In the short run the deal keeps LabOne's 562 jobs in Cincinnati. But this is an investment in the future, not just another job-retention deal for the city. LabOne, a medical testing company that expects to analyze blood samples and other specimens from all over the eastern United States, has plans to add another 400 jobs to its work force in the next 10 years.
"We are creating new jobs, retaining the jobs we have, and showing other areas in the region that we are a competitive corporate center," Mayor Charlie Luken said Friday. The company announced Thursday it would stay and expand its operations in Cincinnati.
Those 400 new jobs will add more than $13 million in annual payroll and the new and retained jobs mean $5 million in additional earnings tax revenue for the city.
The company, based in Kansas City, purchased the testing operations of the Cincinnati Health Alliance earlier this year. Those operations now are located in leased space at the old Jewish Hospital facility in Avondale, but the company wants to build a new $21 million facility for its expanding operations. The tax incentive deal approved by council in an 8-1 vote last week convinced the company to build its new facility in the city rather than accept a competing deal in Northern Kentucky.
A site for the new facility is expected to be announced in a few weeks. Likely locations are either the TechSolve Business Park in Bond Hill, or an expansion near its present site in Avondale.
There is no question that the relocation threat prompted the tax deal from council. That will rankle with some people, particularly since it pitted Cincinnati against another community in this region.
But in today's market, tax incentives are the price of development for any community. The trick is to make sure the community gets a solid return for that investment. We believe that is the case with the LabOne deal.
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