Streetsboro approves tax abatement as manufacturer expands amid tariff uncertainty

In September, Streetsboro City Council approved a five-year, 35 percent property tax abatement for an expansion project at GEBHARDT Intralogistics North America. City leaders say tariff expenses helped drive the decision to lower the company’s taxes.

Company leaders say tariffs, and a critical U.S. customer base, helped drive the decision to expand. 

“For GEBHARDT Intralogistics, we want to ensure that our customers are getting the best possible product with shorter delivery times and local service. Being able to reduce some of the freight and tariff cost are also crucial when it comes to large automation projects,” said Juergen Conrad, CEO of GEBHARDT Intralogistics North America.

The Trump administration’s tariff policy is designed to reduce chronic trade deficits by making imported goods and materials more expensive. The administration is betting that higher import costs will make stateside manufacturing more competitive and bring production and jobs back to the U.S.

Public policy organizations say it is still too early to tell whether the strategy is playing out as intended, but its effects are already being felt in Ohio.

Gebhardt Intralogistics is part of the Germany-based Gebhardt Group and manufactures intralogistics and automated material-handling systems. Thanks in part to the economic development deal, the company is expanding its facility at 10040 Aurora Hudson Rd.

The company leader said local government’s willingness to work on terms of the new project played a big part in the decision to expand the Streetsboro facility.

“While tariffs did play a significant part in our decision, the decision to alleviate freight costs and gain shorter delivery times were also factors. The leadership of Streetsboro stepping up to help during this time and offering solutions was also a big factor in our decision,” Conrad said.

City Economic Development Director Patrick O’Malia said tariffs and related costs have been cited by multiple companies in Streetsboro. He noted that several international firms in the city have felt similar disruptions tied to tariffs; when presenting the deal to the city for approval, he mentioned tariffs as a specific cause of the company’s request to have the tax abatement approved at Streetsboro’s Sept. 29 council meeting.

Mayor Glenn Broska said the GEBHARDT project is part of a broader pattern of expansion underway in the city.

“With so many businesses experiencing contractions in recent months, we are experiencing a very large influx of business and industry expanding in the city,” Broska said in an email. He said there are multiple projects currently underway or planned in the city, with combined expansions increasing employment in Streetsboro by more than 1,000 jobs.

Manufacturing leaders said the impact is a little more nuanced. Uncertainty surrounding tariff policy continues to complicate long-term planning for Ohio manufacturers.

Ethan Karp, president and CEO of MAGNET, said the primary challenge posed by tariffs is unpredictability rather than cost alone. MAGNET, or the Manufacturing Advocacy and Growth Network, has spent 40 years supporting all aspects of manufacturing in the Buckeye State, including product development, staffing and growth for manufacturers, particularly for smaller or midsize firms. Ohio is the nation’s third-largest manufacturing state.

“The issue the entire time has been uncertainty because the factors are not based purely on business,” Karp said. “Geopolitical issues mean businesses have trouble planning, and everybody has trouble predicting.”

MAGNET released a preliminary version of its Manufacturing Survey this November. The report found that political uncertainty hampering business growth is at an all-time high among manufacturers. The full report is due out in February and is conducted every two years. MAGNET surveys Ohio manufacturers on their overall strengths, opportunities and projected growth.

This year’s report captured the overall impact of tariffs on sales, costs and investment decisions.

Karp said the preliminary report focuses on changes in sales rather than input costs.

“This is looking at who’s losing and who’s gaining business,” Karp said.

According to the report, roughly one-third of manufacturers reported either gains or losses linked to tariffs, while about 24 percent said they expect to gain business in the coming year. Karp said it’s not clear whether those expectations will translate into sustained growth.

“We’re only six months into the tariffs,” Karp said. “Normally it takes a lot longer than that to qualify a new vendor or secure new deals.”
Karp said manufacturers are weighing whether to make major capital investments or limit expansion to incremental growth.

“Will companies build new facilities to dramatically expand capacity, or will they just continue to incrementally add to their current business?” he said.

The report also found an increase in reshoring activity, with the share of manufacturers reporting reshored production rising from 4 percent to 9 percent. Karp said that trend is fragile due to policy uncertainty.

“You have a tariff that could go away because of a new president or a new political reality,” he said. “And you’ve invested something that’s going to take a 10-year payback.”

Karp said manufacturers are accustomed to economic cycles but described the current environment as atypical.

“These are different because decisions are being thrust upon companies,” he said. “It’s not part of the normal business cycle.”

In Streetsboro, Broska said he’s confident the economic policy will be good for the city in the long run.

“I do believe that many companies will want to come onshore,” Broska said. “In my eyes, this is good for the U.S. economy.”