Buying property isn’t always the best business plan for some companies, including GE Aviation, AK Steel, and auto supplier UGN Inc., the Hamilton Journal-News reports. This means taxpayers may have an interest in those companies, as local entities such as cities or port authorities may buy properties to leverage “for tax incentives to attract and retain job-creating businesses,” according to the article. Doug Armbruster, senior VP and regional director for developer IDI Gazeley, said, “[t]he amount of capital required to own real estate . . . it’s a drag on your financial statements.” In contrast, leasing provides flexibility to move or downsize, as “they’re not stuck with a property to sell.” Ohio law allows port authorities to “own, finance, construct and lease real estate including land, building and equipment,” and if a port authority “buys or owns a property for an expanding business, construction materials purchased in the state are tax exempt,” according to the Journal-News. AK Steel has a lease with an option to purchase on the land for its new research center in Middletown; the city bought the land and authorized the Warren County Port Authority “to have an interest” in it. A spokesperson for AK Steel said the option “was selected as the best fit for AK Steel.”
Leasing more attractive than owning buildings to some companies
