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SunCoke requests additional tax credit

Heavy equipment kicks up dust at the SunCoke coke plant Monday, April 12, on Yankee Road in Middletown, near the Monroe border. Despite pending permit appeal, work on the $360 million facility began again after more than a year of inactivity.

Staff photo by Gary Stelzer Heavy equipment kicks up dust at the SunCoke coke plant Monday, April 12, on Yankee Road in Middletown, near the Monroe border. Despite pending permit appeal, work on the $360 million facility began again after more than a year of inactivity.

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By Jessica Heffner  and Ryan Gauthier, Staff Writers Updated 10:20 AM Tuesday, April 13, 2010

MIDDLETOWN — The city of Middletown could only receive $35,000 a year from the new SunCoke Energy plant as the company pursues a new tax incentive.

Finance Director Russ Carolus said he is concerned granting the additional Job Creation Incentive Grant, which would reduce the amount of income tax paid to the city, would further diminish the benefit to the embattled city.

“We want businesses to come here and we want to be friendly to businesses,” Carolus said. “But at the same time, we have to make money. We can’t give it all away in an effort to get someone to come in here — you have to have something coming back.”

The $360 million SunCoke plant renewed construction Monday, April 12, after voluntarily halting construction due to legal issues in March 2009.

The facility, which will provide coke to AK Steel’s Middletown Works for its steel operations, already has received a 10-year, 50-percent tax abatement that will save the company $3.7 million. City Council also created a reduced water rate for SunCoke, charging $1.36 per thousand gallons of water produced, two-thirds the normal rate.

Now SunCoke also is requesting the job creation grant, worth up to 50 percent of their city income taxes for a period of 10 years. With $70,000 in projected annual income tax collection, that would leave $35,000 in revenues to the city.

In an e-mail sent to city officials, Carolus said the project has “cost us much money, effort and alienated our neighbor,” refering to Monroe, and that the grant has the potential to jeopardize the city’s ability to “recover some of the losses we’ve had in the recent past.”

“To think that we went through all of that for $35,000 per year is difficult to swallow,” he wrote. “This money doesn’t mean anything to them in real terms, but means a lot to the city.”

Economic Development Director Mike Robinette said any company is entitled to apply for the grant if it meets the minimum requirements, which SunCoke does with an estimated 75 to 86 permanent jobs and $5 million in payroll. And while the incentive could mean less money for the city, it strengthens its overall economic value.

“The way I have always looked at this is it’s an investment that provides long-term viability to AK Steel’s (Middletown) operations and that’s good,” he said.

Thomas Golembeski, spokesman for SunCoke, said since the credit is available through the city, the company applied for it.

“The many new jobs created by the plant — both permanent and temporary — will support the local economy in a variety of ways,” he said.

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