Akron City Council has made the decision to, along with Summit County, chip in to help the Goodyear redevelopment project forward with a new $17.2 million financing agreement.
Due to current credit conditions, the developer behind the much-anticipated $900 million new Goodyear Tire and Rubber Co. headquarters requested the financing assistance to offset a portion of the costs to acquire the Goodyear properties to be redeveloped.
Under the deal, the Summit County Port Authority will issue $17.2 million in taxable development revenue bonds to help developer IRG Rubber City LLC purchase and make energy improvements to the Goodyear campus and Technical Center, with the exception of its test track and other minor parcels. IRG will lease the Technical Center to Goodyear for 10 years.
Should IRG default on the three-year loan from the Port Authority, the city and county have agreed to each pay half of the loan back from their respective non-tax revenues. The city's maximum obligation should IRG default will be $7.4 million. Economic Development and Job Creation Committee Chair Terry Albanese (W-6) said those chances of defaulting are remote.
"If things fall through, first it goes back to IRG. Things would have to fall really quickly for that to happen," Albanese said. "If IRG had any inkling things would fall through that fast, they wouldn't be doing this because it falls to them first."
Albanese said the city would have put up money to help the project along eventually, and this agreement represents a mere reversal of the order of things.
"This is a change in order in the elements of the agreement - not a change to the content of the original agreement between Akron and the other parties involved when Council passed the redevelopment plan in December of 2007," she said. "This allows the project to begin under the current economic circumstances."
Summit County Council approved its portion of the financing agreement earlier this month, but City Council took time to iron out questions about the arrangement. Council President Marco Sommerville (W-3) said the questions were answered, and Council is comfortable with the new terms - especially because it means saving Akron jobs.
"A lot of questions were asked, but at the end of the day, we get the job done and save Akron jobs, thanks to the city and the county working together."