The West Virginia Economic Development Authority's board voted Thursday to approve the purchase and lease of an additional $2 million of property and equipment to Wheeling-based frozen food manufacturer Ziegenfelder.
That move, and the sale of $45,749 worth of property to Hino Motors in Williamstown, bring the WVEDA's property and equipment ownership around the state to around $109 million. The WVEDA owns and leases property and equipment back to large companies in the state in order to prevent the companies from paying taxes on the buildings and equipment used in their operations.
The approval of the additional $1.5 million for Ziegenfelder's new equipment and $472,000 for an expansion of the company's manufacturing facility in Ohio County brings the company's total leased property value to around $16.1 million. That figure is the second-highest property value among companies that hold leases with the WVEDA, only behind Gestamp, which leases around $25 million in property from the WVEDA at its South Charleston plant.
Ziegenfelder, a frozen ice pop manufacturer that has operated out of Wheeling for 140 years, employs 220 people and expects to add 29 new employees because of the expansion, according to WVEDA documents.
The sale of 0.45 acres currently owned by the WVEDA to Hino Motors. a truck manufacturing company, reduces the value of the property leased to that company to around $1.1 million.
David Warner, the executive director of the WVEDA, said Hino Motors decided to buy the parcel of land next to its facility in order to drill a water well on the property.
While the terms of the leases show that show that Ziegenfelder essentially pays for the purchase of the property, the ownership of the property by the state government allows them to forgo property taxes that largely go towards local schools and the county government.
That has been the main complaint of the system by the West Virginia Association of Counties and others who question the use of the leases to shield companies from taxes.
Warner and others in support of the leases say that without removing the property and equipment tax obligations of the companies, the businesses wouldn't be able to expand and continue operations.
Those proponents say that providing the lease agreements to interested businesses allow West Virginia compete with other states vying for new economic development opportunities.
Reach Andrew Brown at andrew.brown@wvgazette.com, 304-348-4814 or follow @Andy_Ed_Brown on Twitter.