Carvana project moves ahead after state panel approves tax credit (UPDATED)

The Ohio Tax Credit Authority approved a 1.368 percent, eight-year job creation tax credit for automotive dealer Carvana to hire 400 people and create more than $13.3 million in payroll on the old Spiegelberg Orchards property in Elyria Township. Shawn Starlin, a project manager with the Cleveland-based business development organization Team NEO, told the five-member Tax Credit Authority board in a video conference call Monday morning that the project includes a 200,000 square-foot inspection and reconditioning center that will front Interstate 90. The building cost is an estimated $23 million, Starlin said. Carvana plans to create 400 new jobs with a payroll expected to be more than $13,312,000. Another 222 jobs will be retained at the company's facility in Euclid, Cuyahoga County, which has an associated payroll of more than $8.4 million, Starlin said. Ohio is competing with Indiana, Tennessee and Oklahoma for the project, and the proposed tax credit "is a major consideration" for Carvana's final plans, Starlin said. The tax credit was granted for Jan. 1, 2022 to Dec. 31, 2029. According to the Ohio Development Services Agency, the tax credit: "Provides a refundable tax credit against a taxpayer's Commercial Activity Tax, insurance premium tax, Ohio corporate franchise tax or an individual's Ohio personal income tax obligations. The tax credit is based on Ohio employee payroll for new jobs created as result of new business investment in Ohio." Lorain County officials had been secretive about the project for months until commissioners confirmed two weeks ago that Carvana was planning to build a facility here. Carvana's sales process is almost entirely online, with vehicles delivered to or picked up by customers upon purchase. Starlin told the board that Carvana was founded in 2012 in Phoenix, Arizona, and has built a business model "removing the traditional dealership and replacing it with technology and excellent customer service." He said their online car sales mean customers can shop thousands of late model trucks, finance their purchases and trade or sell their current vehicles to Carvana the same way. Elyria Township, Elyria, Lorain and the county entered into a joint economic development district agreement, or JEDD, for the approximately 124-acre site in December 2019. Lorain will provide sewer service to the project, and Elyria will provide water. Local officials were able to keep Carvana's name mostly under wraps, which helped build trust with Carvana's site selection team, Starlin said. "This was truly a community-led effort," Starlin told the tax credit board, "through the determination and persistence of local officials from Elyria Township, Elyria and Lorain. It was a complicated economic development project." The former Spiegelberg Orchards property, at 6161 Middle Ridge Road, had been on the market for more than three years until the property transfer went through to Carvana earlier this month. Spiegelberg Orchards opened in the 1930s, and Kenneth and Ruth Spiegelberg ran the 105-acre property until they died in 2014. The property went up for sale in September 2016 at an opening price of $18 million. It wasn't immediately known how much Carvana paid for the property. Contact Dave O'Brien at (440) 329-7129 or dobrien@chroniclet.com. Follow him at @daveobrienCT on Twitter.