Saturday, June 12, 2004

Convergys misses goal, keeps tax deal

By Ken Alltucker
The Cincinnati Enquirer

A Hamilton County tax incentive review committee has agreed to keep a tax-break deal for Convergys Corp.'s Norwood call center even though the company fell short of hiring goals.

The committee voted to send the Cincinnati-based customer service company a warning letter detailing its "noncompliance with hiring" at the call center. But the review committee decided Norwood's best move is to sustain the enterprise zone pact even if the company transfers more jobs out of the city.

"It's not in Norwood's advantage to terminate this agreement," said Harry Blanton, enterprise zone program manager for Hamilton County Development Co.

Enterprise zone deals require companies to meet minimum job, payroll and investment thresholds in exchange for tax breaks on buildings, equipment and other personal property.

Convergys reported that it exceeded payroll and investment goals. The company spent $4.3 million on equipment, and gave out $29.4 million in paychecks last year for its Norwood crew.

The company's 10-year enterprise zone agreement requires it keep 1,051 full-time and 401 part-time positions at the center. The company had 645 full- and part-time workers at the call center last year.

Convergys' employment in Norwood has since dwindled because it has transferred employees to its downtown headquarters. The company last year bought the Atrium One building on Fourth Street to fulfill a nearly $200 million tax incentives package of grants, abatements and a loan from the city of Cincinnati and the state.

"The jobs that we have moved, or are moving, are not call-center related," said Morris, adding that Convergys expects to keep 450 call-center jobs in Norwood.

Hamilton County audits each enterprise zone agreement once a year. That audit is followed by a formal review by a seven-member tax incentive review board made up of representatives from the county, the county auditor's office and the city where the company operates.

Convergys requested that the review board delay this year's vote on its Norwood deal until it had a chance to meet with city representatives. During a recent meeting, Convergys asked Norwood and the county to rescind the tax-break deal, Blanton said.

Norwood officials declined because it realized that retaining some jobs is better than losing one of the city's largest employers. The enterprise zone deal also can be used to recruit new businesses.

Ted Kiser, Norwood's assistant law director, said the city believes it's important for Convergys to meet its employment obligation. Not only does the company's payroll contribute valuable earnings-tax dollars, the call center employees also spend money in shops and restaurants.



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