Trying to cut operating costs, the Record Publishing Co. plans to consolidate its Ravenna and Stow offices into one Kent-based operation as early as 2014.
The company, which publishes the Record-Courier and several weekly newspapers in the area, is asking for a tax abatement to make the move, which would bring 87 employees to Kent.
The news company is asking to approve the abatement, which would eliminate 75 percent of the company’s tax burden on their property at 1050 W. Main St. for up to 12 years. Record Publishing plans to invest up to $3 million in the property, according to the tax abatement application filed with Kent.
Estimates show the abatement would save the company between $9,000 and $14,000 annually, or as much as $166,000 over the life of the abatement, depending upon the final valuation of the building after improvements are made.
Typically, tax abatements require the approval of , which receive the bulk of property taxes for school operations. In this case, the city has agreed to cover the district’s lost revenue, as Kent expects to gain about $50,000 in new income tax revenue from the move each year.
“The city estimates that the amount of shared income tax revenue from Record Publishing will fully compensate for our loss of the 75 percent (of) property taxes,” Kent City Schools Treasurer Debbie Krutz said.
David Dix, whose family runs Dix Publications and owns Record Publishing, said they look at the tax abatement request as a necessary business decision.
“We’re trying to reduce our overhead so we can compete with Patch,” Dix said in an interview Tuesday. “We’re investing a lot of money in Kent and we feel like we’re making a contribution to the community.”
Patch.com, a hyperlocal, online media company owned by AOL, launched 17 sites covering communities in Northeast Ohio in the past six months, including Kent. Patch runs more than 800 local news sites nationwide.
Gary Locke, Kent's community development director, said he understands Record Publishing's need to consolidate.
“Evidently, it’s very competitive,” Locke said of the journalism industry, so Record Publishing must look at their operational costs and “cut down just as any company would.”
He also said tax abatements encourage business growth.
“Let’s say it was an existing company that was already here, the abatement might encourage them to expand or to make improvements to the property that, maybe, they wouldn’t have otherwise,” he said, adding that, like in Record Publishing’s case, it is an incentive for new businesses to move into the community.
Stow, Ravenna feel loss
The Record-Courier maintained an office in Kent until 2008, when it closed and the employees there moved to the Ravenna location. Record Publishing bought the West Main Street property in Kent in 2010 for $840,000 to house the Dix Communications corporate offices with the eventual goal of consolidating the Ravenna and Stow locations.
“We’re disappointed of course,” Ravenna Economic Development Director Kerry Macomber said. “The Record-Courier has been a mainstay in Ravenna for a number of years. It’s unfortunate, but we understand that this is a business decision for the Record Publishing Co. to consolidate their offices and be more efficient.”
Macomber said Dix sat down to lunch with her and Ravenna Mayor Joe Bica about six months ago to tell them the move to Kent was being discussed. Macomber said Ravenna officials didn’t try to counter with their own tax abatement or other incentives after hearing of the possible Kent move.
“We absolutely would offer that if it was appropriate,” Macomber said. “But tax abatements, like a lot of other things, have to be discussed, presented, agreed upon before construction takes place. I think that probably, had the Dix family or Record Publishing Co. come to Ravenna while they were in their decision-making process, we would have certainly offered that.”
For now, the company will keep the newspaper presses in Ravenna, according to the tax abatement application filed with Kent. Record Publishing employment in Ravenna will drop from 49 to nine full-time positions and from two to zero part-time jobs.
In Stow, the loss is more severe — and more sudden.
Stow Economic Development Director Mike Weddle said they found out about the company’s plan to close the Stow office about three weeks ago from Kent officials.
“It came out of the blue, quite frankly,” Weddle said. He said, like Ravenna, they would have tried to keep Record Publishing in town with tax incentives if they had been given the chance. But he understands the company’s need to consolidate in a central location.
“We get that. We understand that,” Weddle said. “We regret the loss of their position in the city of Stow. If it makes sense from a business perspective, it’s hard for me to fight that. They will be missed.”
Record Publishing will completely close its Stow operation, taking all 42 full-time employees and four part-time workers to Kent, according to the company’s tax abatement application.
The company owns four properties it could renovate and consolidate, and of those locations "several are willing to offer abatement opportunities," according to the company's tax abatement filiing. "If abatement is possible at our Kent location, we feel this would be the better opportunity."
Changes in local news
Record Publishing runs 10 newspapers in Northeast Ohio. Their corporate parent, Dix Communications, operates the Ohio newspapers and papers in Kentucky in addition to radio stations in Ohio, Maryland and Florida.
When asked whether the Kent consolidation implied anything about the state of print publications, Dix said he didn’t really know.
Despite the desire to cut costs, Record Publishing will keep printing publications such as the Record-Courier, Stow Sentry and Gateway News — even though the same printed content is republished on their respective websites.
"Not everybody goes online, but we also have an online product that carries everything that's in the newspaper," Dix said.
He acknowledged the evolving state of the news industry from print to online media in a letter to Kent Economic Development Director Dan Smith.
“The media world is changing so rapidly that the way we produce and distribute news will keep changing,” Dix wrote. “As our world becomes more digital, who knows what new changes we will have to confront to stay in business.”
Barbara Hipsman-Springer, an associate professor in Kent State University’s school of journalism, said the school welcomes Record Publishing to Kent.
“The way people get their news changes every day and with each person,” she said. “It’s not just a newspaper town anymore.”
But despite this fact, Hipsman-Springer said she thinks the print product will be around for a long time.
The governmental body (City of Kent) which benefits from the abatement should reimburse the body losing revenue (Kent City Schools) thus the burden of making up the difference is spread across the entire community. As to the merits of the Record-Courier deserving a break? If the Dix family should not get a little help, then who should ever get a break?
Maybe they will move into the old Paul's Lumber Store across the street?