Canton has an unusually rich industrial history. In the early- and mid-19 th centuries its strong agricultural foundation drove demand for development of better shipping methods the Ohio & Erie Canal at first, connecting nearby Massillon to Lake Erie and the Ohio River 1 , then railroads 2 . The railroads, in turn, helped make Canton a natural location for manufacturers in the 19 th century and for most of the 20 th century, and some of the nations most iconic brands were born here. The first upright vacuum cleaner was invented by a Canton janitor, James Murray Spangler, whose cousins husband William Henry Hoover turned it into an international icon. Frank Case invented a dental chair in Canton and launched Weber Dental Company. Henry Belden launched the Belden Fire Brick Company on his farm in 1885, creating mass-produced bricks. Henry Harper Ink created Tonsilene, the first medicine patented to relieve sore throats. Hercules Motors Company, on the edge of downtown Canton, was once the largest manufacturer of internal combustion engines in the world. German immigrant Karl Diebold bought a share of a Cincinnati-based safe manufacturer in 1859, then moved his company, Diebold Bahmann Safe Company, to Canton in 1872. With incentives from the citys Board of Trade, John Dueber moved his two watch manufacturing businesses to Canton, combining them into the Duebner Hampden Watchworks in 1886. Union Metal was a pioneer in using steel to manufacture fluted columns, eventually supplying over 4,000 towns and cities throughout America between 1906-1930, and its archive of street lighting fixtures remains the largest in the US.
But, like most of northeast Ohio, Canton has lost industries and industrial jobs over the past several decades. Belden Brick closed its Canton plant in 1970. Republic Steel and United States Steel are both gone. LTV Steel went bankrupt in 2000, and 7,500 jobs disappeared. Hoover was bought from Whirlpool by Techtronic Industries in 2007, and Techtronic closed the Canton manufacturing facility. Timken, which manufactures specialty steel and roller bearings, closed two of its three Canton bearing plants in 2009.
Number of employed residents 16 years of age 1970 (Census) 2000 (Census) % change, 1970-2000 2010 (Census) % change, 2000-2010 2012 (ACS) % change, 2010-2012 % change, 2000-2012 Canton 41,734 34,475 -17.4% 30,883 -10.4% 30,493 -1.3% -11.6% Stark County 141,260 180,590 27.8% 175,433 -2.9% 170,885 -2.6% -5.4% Sources: 2000 and 2010 Census of Population, 2012 American Community Survey
In all, there were 10,851 fewer Canton residents 16+ years old in the workforce in 2000 than in 1970 a decline of 17.4 percent. Canton residents lost another 3,592 jobs between 2000-2010. And, between 2010-2012, the number of Canton residents 16 or older in the work force has dropped by another 400 people. Stark County fared slightly better between 1970-2000 the number of County residents 16+ years old grew by 39,330, an increase of 27.8 percent.
1 Many of Cantons early residents feared that standing water in the canal might spread disease, so they passed on the opportunity to have the canal pass through the city.
2 Cantons city leaders initially turned down an offer from the Cleveland and Pittsburgh Railroad to build track through Canton; the railroad instead passed 18 miles east of Canton. Other rail lines eventually came through Canton, though, including the Pennsylvania Railroad and the Wheeling & Lake Erie Railway. But there have been fewer County residents 16+ years old in the work force since 2000 5,157 fewer in 2010 than 2000 (a 2.9 percent decrease), plus a loss of another 4,548 between 2010-2012 (a 5.4 percent drop).
While both Canton and Stark County had fewer residents in the work place in 2012 than 2000, some occupations and industries actually added jobs.
! The number of Canton residents 16 or over with management, business, science, and arts occupations increased by 768, an increase of 10 percent. Those with service occupations increased by 2,230 a 32 percent increase. The number of Stark County resident workers in these occupations grew, also, roughly in pace with Canton.
Occupations and industries in which Canton and Stark County working residents are employed Canton Stark County 2000 2012 2000 2012 Number % Number % % change Number % Number % % change Total residents 16+ in the work force 34,475 30,493 -11.6% 180,590 170,885 -5.4%
! The number of Canton residents 16 or over in the workforce grew in three industries between 2000-2012: o Professional, scientific, and management industries, and administrative and waste management services: Industries in this group include a broad range of professional services legal and financial services, scientific research, architectural and engineering services, management services, environmental remediation, and many other skilled services. The number of Canton residents employed in these industries increased by 30 percent a gain of slightly more than 1,000 jobs.
o Other services, except public administration: This category includes nonprofit organizations, religious institutions, grantmaking organizations, and a variety of personal services, from hair care to funeral services. Jobs in these industries tend to pay lower wages than in the professional services industries. The number of Canton residents employed in these industries grew by 40 percent between 2000-2012, a gain of almost 2,000 jobs.
o Public administration: The number of Canton residents employed in public administration grew by eight percent, a gain of 271 jobs. In Stark County, 2,100 more residents worked in public administration in 2012 than in 2000, a 17 percent increase.
The number of Stark County residents employed in these industries grew, also, although Canton outpaced the County in percentage growth in jobs in professional services and other services industries. Stark County also experienced growth in transportation, warehousing, and utilities industries. But employment in most other occupations and industries has dropped off. For example, in 2000, more than one-fifth of Cantons employed residents worked in manufacturing industries. By 2012, this had dropped to only 15 percent, representing a net loss of roughly 3,100 jobs. In Stark County, the percentage of residents with manufacturing jobs decreased from 24 percent in 2000 to 18 percent in 2012 a relatively small percentage drop, but representing a loss of more than 11,000 jobs.
Not too surprisingly, unemployment remains a problem within the region. But the gap between the unemployment rates in the Canton-Massillon Metropolitan Statistic Area and the state and nation is at least closing. In 2013, 7.5 percent of Canton-Massillon MSA residents in the labor force were unemployed versus 7.4 percent in both Ohio and the United States. By comparison, the MSAs unemployment rate in 2010 was 11.3 percent versus 10.0 percent for Ohio and 9.6 percent for the US.
The numbers of self-employed Canton and Stark County residents are relatively small, and both dropped slightly between 2000-2012, by 3.7 percent and 4.7 percent, respectively. But the numbers of residents working from home-based businesses grew modestly, but growth nonetheless. In 2000, 1.4 percent of Canton residents in the work force worked from home-based businesses; by 2012, 1.65 percent did so. In Stark County, the percentage of resident workers with home-based businesses grew from 2.27 percent in 2000 to 2.96 percent in 2012.
BUSINESS CHARACTERISTICS
Although overall employment in Canton has dropped over the years, Canton is still a major employment center for the region. There are 30,493 Canton residents 16 years or older are in the labor force, but Cantons businesses employ around 44,500 people so, just as some Canton residents undoubtedly work outside Canton, there are at least 15,000 non-Canton residents who work in Canton.
Businesses and employees in Canton and Stark County, by major industry group Canton Stark County Businesses Employees Businesses Employees Industry Number Percent Number Percent Number Percent Number Percent Agriculture, forestry, fishing & hunting 9 0.2% 15 0.0% 540 2.2% 1,089 0.7% Mining 1 0.0% 1 0.0% 52 0.2% 245 0.2% Utilities 5 0.1% 478 1.1% 32 0.1% 782 0.5% Construction 305 7.5% 1,672 3.8% 2,182 9.0% 9,097 5.6% Manufacturing 171 4.2% 4,867 10.9% 89 3.7% 18,290 11.3% Wholesale trade 173 4.3% 1,737 3.9% 942 3.9% 7,191 4.5% Retail trade 398 9.8% 3,041 6.8% 2,419 10.0% 21,207 13.1% Transportation & warehousing 92 2.3% 1,794 4.0% 596 2.5% 4,491 2.8% Information 55 1.4% 673 1.5% 289 1.2% 2,223 1.4% Finance & insurance 128 3.2% 2,692 6.0% 869 3.6% 6,398 4.0% Real estate, rental & leasing 161 4.0% 808 1.8% 1,034 4.3% 7,581 4.7% Professional, scientific & technical services 362 9.0% 1,272 2.9% 2,076 8.6% 6,310 3.9% Management of companies & enterprises 16 0.4% 48 0.1% 74 0.3% 269 0.2% Admin. & support & waste mgmt. & remediation 397 9.8% 1,642 3.7% 3,307 13.6% 10,535 6.5% Educational services 102 2.5% 2,764 6.2% 400 1.6% 10,715 6.6% Health care & social assistance 289 7.2% 10,980 24.6% 1,391 5.7% 22,459 13.9% Arts, entertainment & recreation 57 1.4% 208 0.5% 399 1.6% 1,969 1.2% Accommodation & food services 209 5.2% 2,146 4.8% 1,002 4.1% 11,141 6.9% Other services (except public administration) 542 13.4% 1,974 4.4% 2,657 11.0% 10,586 6.6% Public administration 78 1.9% 5,726 12,9% 276 1.1% 8,869 5.5% Unclassified establishments 491 12.2% 6 0.0% 2,837 11.7% 50 0.0% Total 4,041 100% 44,544 100.0% 24,263 100.0% 161,497 100.0 Source: Dun & Bradstreet, Inc., 2014
Manufacturing was by far the largest employer in both Canton and Stark County in 2000. But by 2014, health care/social assistance and publication were the largest employers, with manufacturing its third largest employer. Lists of Cantons major employers demonstrate the citys (and the regions) shift away from manufacturing industries and towards service-sector industries. In 2006, Cantons major employers were mostly industries and hospitals. Its major employers now include a mix of industries, medical facilities, schools, and local government.
The largest industries in Canton in 2014 2006 Affinity Medical Center Alliance Community Hospital Alliance Community Hospital Aultman Hospital Aultman Hospital Diebold, Inc. Canton City Schools Fishers Food Marketing, Inc. Diebold, Inc. Freshmark, Inc. Fishers Foods The Hoover Company GE Capital Mercy Medical Center Mercy Medical Center PCC Airfoils, Inc. Nationwide Insurance Republic Engineered Products Republic Engineered Products Stark County Government Shearers Foods The Timken Company Stark County Government Workshops Inc. Stark State College The Timken Company Source: Stark Development Board, Inc.; Cnaton Regional Chamber of Commerce (via the Internet Archive Wayback Machine)
In spite of its loss of manufacturing jobs, the region continues to develop and patent new technologies. The Canton-Massillon MSA produced a very respectable 5.1 utility patents per 1,000 residents in 2011 versus, for example, just 0.28 patents per 1,000 Ohio residents and 0.72 patents per 1,000 US residents. This means that the Canton-Massillon MSA ranked 101 st out of the 381 MSAs in the United States in 2011. And the number of utility patents issued to inventors within the MSA increased 53.7 percent between 2000-2011, a period of time in which the MSA lost manufacturing jobs. This could suggest one or more of several things new innovation in the regions traditional industries, new innovation in industries relatively new to the region (such as energy research and oil and natural gas extraction), or new innovation growing from small businesses launched by area residents who lost jobs in local industries or during the economic downturn of the mid/late 2000s.
Canton lost 7,799 residents between 2000-2010; suburban Stark County gained 5,287. In terms of retail demand, this translates into a $54.8 million loss in potential retail sales for Canton, a $39.5 million gain for suburban Stark County, and an overall loss of $15.3 million in retail purchases made by residents of the two jurisdictions combined.
Canton Stark County 2010 Census 73,007 375,586 2012 ACS 72,684 374,868 2020 projection n/a 368,210 2030 projection 77,105 (low) 85,071 (high) 361,130 Sources: US Census Bureau; Stark County Regional Planning Commission/Stark County Area Transportation Study 2030 Comprehensive/Transportation Plan (November 2005); Ohio Development Services Agency
In its 2030 transportation plan (prepared in 2005), Stark County predicted that Canton would gain population by 2030. So far, the transportation plans predictions have not been on course, and it appears likely that Canton will continue losing population perhaps at a slowing pace by 2030. The State predicts that Stark County will continue to lose population over the next 15 years.
As the county and (presumably) the city continue to lose population, retail demand will continue to weaken and, as Cantons middle-income and affluent households continue moving to the suburbs, the price points of the products and services its resident population can support will shift, making it necessary for some businesses to shift their merchandising and marketing strategies to meet the needs of the citys changing population.
Shopping centers and shopping malls larger than 150,000 square feet within 20 miles of downtown Canton Shopping center/mall SF Representative tenants Belden Village Mall 4230 Belden Village Mall; Canton 850,000 Bath and Body Works, Auntie Annes Anne Taylor Loft, American Eagle Outfitters, Aeropostale The Strip 6619 Strip Ave Northwest; Canton 782,611 Walmart, Lowes, Giant Eagle Supermarket Belden Park Crossings 5514 Dressler Rd; Canton 593,610 Target, Jo-Ann Fabrics, HH Gregg Appliances, Dicks Sporting Goods, Kohls Carnation Mall 2500 W State St; Alliance 248,566 Dunhams Sports, Clark Shoes, Claires, Cinema Theater, Bon-Ton Massillon Village Center 2406 Lincoln Way E; Massillon 245,945 Home Depot Tri-County Plaza 1500 Canton Rd; Akron 241,000 GNC, Jo-Ann Fabrics, Goodwill, JCPenney Canton Centre Mall 4000 W Tuscarawas; Canton 233,500 Claires, Bank One, Zale, Kay Jewelers, Foot Locker Manchester Road 3235 Manchester Rd; Akron 233,225 Ace Hardware, Elite Nails, USPS, Acme Fresh Market Arlington Plaza 1380-1400 South Arlington; Akron 202,505 Radio Shack, H&R Block, Family Dollar, Citi Trends, Big Lots Springbrook Plaza 4321-4449 Whipple Ave; Canton 174,353 Weight Watchers, Tuesday Morning, Pat Catans, Outback, Office Max Belden Village Commons 4790 Everhard Rd NW; Canton 172,419 Old Country Buffet, Lucky Shoes, Edible Arrangements, Clark Shoes, Burlington Coat Factory Meadows Plaza 2028 Lincoln Way E; Massillon 160,503 Giant Eagle, Target, Famous Hair, Aspen Dental 30 th Street Plaza 3100 Cromer Ave NW; Canton 157,055 Rent-A-Center, Marcs, Giant Eagle, GetGo, Dollar Tree Source: International Council of Shopping Centers
As Cantons population has contracted, its retail sales have contracted, as well and, in fact, its retail sector has been (mostly) shrinking for several decades. Shopping centers and big-box stores in the suburbs have attracted a substantial share of Canton residents retail purchases. There are 19 shopping centers and shopping malls over 100,000 square feet in size within 20 miles of downtown Canton, including a few regional shopping malls (Beldin Village Mall, Carnation Mall), plus scores of smaller open-air and strip shopping centers. But the retail sector is relatively weak even in Cantons suburbs roughly 10 percent of Stark Countys business entities are retail businesses, a smaller percentage than in most US communities of comparable size. New shopping center development and reinvestment in existing retail centers has been sluggish. And downtown Canton an enormously handsome district packed with historic civic, commercial, and industrial buildings reflecting the communitys pride in its economic heyday has a ground-floor vacancy rate greater than ten percent, with an estimated half million square feet or more of vacant space in upper floors and peripheral buildings.
Retail supply and demand 3 in Canton in 2012 and 2013, by major store category 2012 2013 Store category Supply Demand Void Supply Demand Void Motor vehicle & parts dealers $ 116,548,000 110,574,000 5,974,000 $ 177,560,000 86,057,000 91,503,000 Furniture & home furnishings stores 3,498,000 10,552,000 (7,054,000) 2,319,000 8,622,000 (6,303,000) Electronics & appliance stores 4,321,000 13,975,000 (9,654,000) 6,422,000 13,804,000 (7,382,000) Building materials, garden equip. & supply stores 9,152,000 16,551,000 (7,399,000) 4,264,000 14,103,000 (9,839,000) Food & beverage stores 71,579,000 85,804,000 (14,225,000) 166,106,000 73,612,000 92,494,000 Health & personal care stores 17,343,000 24,896,000 (7,553,000) 41,904,000 43,580,000 (1,676,000) Gasoline stations 102,068,000 83,915,000 18,153,000 51,019,000 53,395,000 (2,376,000) Clothing & clothing accessories stores 9,483,000 20,354,000 (10,871,000) 18,842,000 23,440,000 (4,598,000) Sporting goods, hobby, book & music stores 5,635,000 6,402,000 (767,000) 7,140,000 11,548,000 (4,408,000) General merchandise stores 71,834,000 85,980,000 (14,146,000) 32,982,000 88,684,000 (55,702,000) Miscellaneous store retailers 4,972,000 11,591,000 (6,619,000) 9,554,000 11,964,000 (2,410,000) Nonstore retailers 14,398,000 14,176,000 222,000 17,277,000 27,892,000 (10,615,000) Food services & drinking places 73,752,000 82,431,000 8,679,000 74,516,000 48,474,000 26,041,000 Total $ 504,583,000 567,201,000 (62,618,000) $ 609,905,000 505,175,000 104,730,000 Source: ESRI
In 2012, Canton had an overall retail sales leakage 4 of $62.6 million. Several major store categories experienced sales surpluses: motor vehicles and parts dealers ($6.0 million surplus), gasoline stations ($18.2 million surplus), restaurants ($8.7 million surplus) but all other major store categories experienced
3 Retail supply (actual sales) is an estimate by ESRI, a geospatial data company, and is based primarily on data from the US Census Bureaus Economic Census and Nonemployer Statistics. The State of Ohio does not make detailed data on taxable retail sales available to municipalities. Retail demand is based on the US Bureau of Labor Statistics Consumer Expenditure Survey and on the Census of Population; it therefore reflects the demographic characteristics of the localities households (e.g., household income, household size, age of householder, number of earners, ethnicity, etc.).
4 A sales leakage means that a communitys businesses are capturing fewer retail dollars than the communitys residents are spending. This often means that residents are shopping outside the community in a nearby community or online, for example and that these lost sales are not being offset by sales to non-local customers (tourists, people who commute to the community for work, or people who buy things online from community businesses, for instance). Similarly, a sales surplus means that a communitys businesses are generating more in sales than can likely be attributed to community residents. Sales surpluses therefore often (but not always) suggest that businesses are attracting shoppers from outside the community. leakages. By 2013, however, Canton had an overall retail sales surplus of $104.7 million. The changes are almost completely attributable to increased sales (and/or diminished leakages) in three store categories:
! Motor vehicles and arts dealers, whose $6.0 million sales surplus in 2012 grew to a $91.5 million surplus in 2013 ! Food and beverage stores, which had a $14.2 million sales leakage in 2012 but a $92.5 million surplus in 2013 ! Restaurants, whose $8.7 million 2012 sales surplus grew to a $26.0 surplus
There were small improvements in several store categories for example, the sales leakage in the health and personal care stores category narrowed a bit, from a $7.6 million leakage in 2012 to a $1.7 million leakage in 2013, and the businesses in the clothing and clothing accessories stores category plugged the gap by about $6.3 million.
Retail supply and demand in Stark County in 2012 and 2013, by major store category 2012 2013 Store category Supply Demand Void Supply Demand Void Motor vehicle & parts dealers $ 709,062,000 694,585,000 14,477,000 $ 857,746,000 602,575,000 255,171,000 Furniture & home furnishings stores 58,044,000 69,476,000 -11,432,000 64,883,000 60,950,000 3,933,000 Electronics & appliance stores 56,292,000 87,993,000 -31,701,000 104,269,000 95,944,000 8,325,000 Building materials, garden equip. & supply stores 107,722,000 116,774,000 -9,052,000 115,055,000 108,111,000 6,944,000 Food & beverage stores 615,502,000 515,986,000 99,516,000 704,073,000 495,653,000 208,420,000 Health & personal care stores 125,818,000 152,364,000 -26,546,000 436,365,000 301,170,000 135,195,000 Gasoline stations 531,640,000 500,021,000 31,619,000 372,971,000 358,259,000 14,712,000 Clothing & clothing accessories stores 142,539,000 126,254,000 16,285,000 152,111,000 160,127,000 -8,016,000 Sporting goods, hobby, book & music stores 41,893,000 39,609,000 2,284,000 93,834,000 79,426,000 14,408,000 General merchandise stores 578,704,000 530,367,000 48,337,000 499,621,000 603,896,000 -104,275,000 Miscellaneous store retailers 69,792,000 72,131,000 -2,339,000 74,007,000 82,227,000 -8,220,000 Nonstore retailers 77,606,000 90,020,000 -12,414,000 76,128,000 198,267,000 -122,139,000 Food services & drinking places 509,100,000 509,389,000 -289,000 397,757,000 333,532,000 64,225,000 Total 3,623,714,000 3,504,969,000 118,745,000 3,948,820,000 3,480,137,000 468,683,000 Source: ESRI
Like Canton, Stark County also boosted its retail sales between 2012-2013. In 2012, the County had an overall retail sales surplus of $118.7 million. By 2013, its surplus had grown to $468.7 million. It appears to reverse sales leakages in several store categories furniture and home furnishings stores; electronics and appliance stores; building materials, garden equipment and supply stores and made a substantial gain in the health and personal care stores and food services and drinking places store categories. To an extent, some of these new sales surpluses are explained (and offset) by a drop in sales assigned to the general merchandise stores category but this is likely the result of recategorization of some general merchandise stores and their departments to other store categories than by an actual drop in sales of merchandise in the general merchandise store category. The store categories in which the County most likely made substantial gains were in the motor vehicles and parts dealers. This is consistent with a strong nationwide trend: people who delayed new car purchases during the economic downturn began purchasing cars again in the past several years, boosting sales throughout the US. For the sake of illustration, removing the $240.1 million gain in sales surplus in this store category reduces Stark Countys overall increase in sales surpluses in other store categories from $468.7 million to $228.0 million, representing a more modest increase of $109.3 million over 2012, largely attributable to increases in grocery (food and beverage stores) and pharmacy (health and personal care stores) sales.
Retail sales supply and demand in Canton and Stark County in 2013 Canton Stark County Store category Supply Demand Void Supply Demand Void Motor vehicle & parts dealers $ 177,560,000 86,057,000 91,503,000 $ 857,746,000 602,575,000 255,171,000 Furniture & home furnishings stores 2,319,000 8,622,000 (6,303,000) 64,883,000 60,950,000 3,933,000 Electronics & appliance stores 6,422,000 13,804,000 (7,382,000) 104,269,000 95,944,000 8,325,000 Building materials, garden equip. & supply stores 4,264,000 14,103,000 (9,839,000) 115,055,000 108,111,000 6,944,000 Food & beverage stores 166,106,000 73,612,000 92,494,000 704,073,000 495,653,000 208,420,000 Health & personal care stores 41,904,000 43,580,000 (1,676,000) 436,365,000 301,170,000 135,195,000 Gasoline stations 51,019,000 53,395,000 (2,376,000) 372,971,000 358,259,000 14,712,000 Clothing & clothing accessories stores 18,842,000 23,440,000 (4,598,000) 152,111,000 160,127,000 (8,016,000) Sporting goods, hobby, book & music stores 7,140,000 11,548,000 (4,408,000) 93,834,000 79,426,000 14,408,000 General merchandise stores 32,982,000 88,684,000 (55,702,000) 499,621,000 603,896,000 (104,275,000) Miscellaneous store retailers 9,554,000 11,964,000 (2,410,000) 74,007,000 82,227,000 (8,220,000) Nonstore retailers 17,277,000 27,892,000 (10,615,000) 76,128,000 198,267,000 (122,139,000) Food services & drinking places 74,516,000 48,474,000 26,041,000 397,757,000 333,532,000 64,225,000 Total $ 609,905,000 505,175,000 104,730,000 3,948,820,000 3,480,137,000 468,683,000 Source: ESRI
The retail supply and demand data suggest several interesting things. For example, it appears that Canton residents are probably making many of their retail purchases in Stark County, not in Canton. Both Canton and Stark County have sales leakages in the clothing and clothing accessories store category, suggesting either that apparel stores within the region are not providing the types of merchandise or the merchandise price points that at least some shoppers want or that there is not enough apparel-related merchandise available. And both the city and county have sales leakages in the miscellaneous store retailers category, the category that includes many specialty businesses (like office supplies, florists, used merchandise stores, pet supply stores, artists supplies, hearing aids, cosmetics, and religious goods), which might suggest problems with marketing or business placement.
LEADING ECONOMIC INDICATORS
The composite index of leading economic indicators for the Canton-Massillon MSA edged up by 0.4 percent from April 2013-April 2014, in sync with the national composite index and slightly outpacing Ohios 0.1 percent increase for this period of time. This suggests a year of steady and sustained, albeit somewhat slow, economic improvement.
Summary of leading economic indicators for the Canton-Massillon MSA, April 2013-April 2014 Indicator April 2013 April 2014 % change Nonagricultural wage and salary employment 170,600 170,000 -0.4% Leading indicator index (2000=100) 91.5 91.9 0.4% Components of index: Initial claims for unemployment insurance 1,021 1,279 -33.4% Average weekly hours for manufacturing 42.0 42.4 1.0% Valuation of housing permits $ 8,374,000 $9,046,000 8.0% Total number of housing permits 43 43 0.0% Single-family units 34 36 5.9% Multiple units 9 7 -22.2% Source: Ohio Leading Indicators, April 2014, Ohio Department of Job and Family Services, Office of Workforce Development, Bureau of Labor Market Information
ECONOMIC DEVELOPMENT TOOLS AND INCENTIVES
The city, county, and state offer a variety of tools and incentives to stimulate and support business and commercial property development. These include:
! Property tax incentives: The City of Canton offers two property tax incentives to businesses opening in or relocating to Canton, depending on a businesss location and a few other factors one for businesses located in Community Reinvestment Areas, and one for those in Enterprise Zones (the entire City of Canton has been designated an Enterprise Zone, making businesses locating to or expanding within Canton eligible for a variety of local and state tax incentives).
! Tax Increment Finance: Ohios Tax Increment Finance program enables cities to essentially use a portion of the property tax revenue generated by an economic development project to pay for public infrastructure improvements needed to make the project possible.
! Job Creation Incentive Program: People employed in Canton pay two percent of their earnings as income tax to the City of Canton. The City offers half of this revenue, for up to five years, to current or new employers half of this revenue that create 25 or more full-time jobs (based on the number of people the business employs). The amount employers might receive is based on how many jobs are created; the amount the company is investing in buying, leasing, or building a business facility; the companys total payroll; and other factors.
! Net Profit Tax Incentive Program: The City offers new businesses and businesses relocating to Canton an annual payment equal to half of the businesss net profits tax, for up to five years. As with the job creation income tax incentive, businesses must create 25 or more full-time jobs, and the amount the City offers is based on the businesss total payroll, project investment, and other factors. Businesses that receive property tax incentives from the City and that have an annual payroll over $1 million are not eligible for the net profit tax incentive.
! Ohio Investment in Training Program (OITP): This program offers financial assistance to provide customized training to employees of new and expanding manufacturers.
! Ohio Research and Development Sales Tax Credit: The State exempts new and existing businesses from paying sales tax on machinery and equipment used primarily for research and development.
! Special Improvement District: Downtown Cantons property owners have enacted a Special Improvement District (SID) to provide funding for marketing, business development, and supplemental services.
! State and federal historic rehabilitation tax credits: The federal government offers an income tax credit equal to 20 percent of the cost of rehabilitating a historic commercial building, and the State of Ohio offers a parallel state income tax credit equal to 25 percent of rehabilitation costs. Tax credits can be carried forward 20 years and/or backward one year, and in some instances they can be converted to project equity through partnership with an investor seeking to offset federal or state income tax liability. Many of the buildings in downtown Canton are eligible for these tax credits.
And, there are dozens of organizations involved in various aspects of economic development in Canton and Stark County. These include:
! Canton Development Partnership ! Canton Preservation Society ! Canton Regional Chamber of Commerce ! Canton Downtown Partnership ! Fund for Our Economic Future ! IdeaCrossing free online tool for connecting entrepreneurs with resources. ! JobsOhio ! Jumpstart, Inc. ! Manufacturing Advocacy and Growth Network (MAGNET) ! The Northeast Ohio Trade & Economic Consortium administers Foreign Trade Zone 181. ! Ohio Department of Development offers a variety of programs ! Small Business Development Center at Kent State University at Stark ! Stark County Land Reutilization Corporation ! Stark County Minority Business Association ! The Stark Community Foundation has made more than $106 million in grants to nonprofit organizations. ! The Stark Development Board, a private, nonprofit organization, encourages business development and expansion. ! Stark Entrepreneurship Alliance (partnership between Stark Development Board and several other organizations) ! TeamNEO ! Technology Accelerator Alliance
There are also many combinations of organizations on special projects. For example, Stark State College has an Oil and Gas Business Advisory Council and, in partnership with three other two-year colleges, offers ShaleNet US curriculum.
ISSUES
Some of the issues Cantons new Comprehensive Plan should address include:
! The regions aging population is increasing demand for healthcare. Healthcare-related businesses now account for 7.2 percent of all business entities in Canton but they provide 24.6 percent of all the citys jobs, making it Cantons largest-employing industry. Healthcare-related businesses account for 5.7 percent of all business entities and 13.9 percent of jobs in Stark County.
! Retail is making a (very) modest rebound but is likely to face stiff challenges ahead. This is driven primarily by automotive purchases shoppers postponed during the 2007+ economic downturn. But the regions declining population will continue to chip away at retail buying power, making the years ahead unusually challenging for Canton-area retail development.
! The nature of the retail industry is changing dramatically. The percentage of retail purchases made online in the US has more than doubled almost every year for the past decade and is now approaching ten percent of Americans overall retail purchases. This means that some retail businesses can survive primarily from online sales and that many retail businesses can augment bricks-and-mortar sales with web-based sales. This could make it possible for Canton to boost retail sales in spite of its declining population.
! Downtown Cantons revitalization is crucial to Cantons future economic growth. Rebuilding downtown economic viability will depend largely on (a) focusing business development activities at several strategically selected concentrated nodes of business activity, (b) increasing the downtown residential population, (c) improving the products and services for the districts daytime worker population, and (d) removing regulatory barriers and other hurdles in order to make downtown the easiest place in Canton for new business and property development to take place. Downtown Cantons relatively high ground-floor vacancy rate might actually be an advantage in business development, providing some room for maneuverability in placing new businesses in locations where they might benefit from foot traffic from nearby businesses. And the high vacancy rate in the upper floors of downtown Cantons historic buildings might be converted to housing, providing a high quality, urban housing product not otherwise available in Canton and that might be attractive to some of the people who currently commute to Canton for work (for example, Millennials tend to favor the types of buildings and walkability that downtown Canton offers).
! Downtown Cantons daytime worker population is one of the citys greatest and most overlooked market assets. If these roughly 9,400 workers constituted a city, the city would be larger than 30 percent of Ohio communities. Cumulatively, they represent at least $48 million in annual retail market demand 5 .
5 Based on Cantons average household size (2.45 people) and household income demographics, and assuming that 80 percent of downtown workers represent unique households. ! Manufacturing is still strong but future growth is likely to come from smaller firms. Although Canton has lost manufacturing jobs, it still has roughly 4,500 residents, plus hundreds of commuters, employed in manufacturing and, including both residents and commuters. The city has a high rate of patent production. But, with few exceptions, the changing nature of manufacturing tends to favor smaller manufacturers.
! Most of the financial incentives and financing tools available favor larger businesses, not smaller ones: The city, county, and state offer many business and property development incentives, but they overwhelmingly tend to favor large businesses rather than small ones. For example, Cantons Job Creation Incentive Program and Net Profit Tax Incentive Program are available only to businesses creating 25 or more new jobs. There are virtually no incentives targeting businesses with fewer than 25 employees or less than $1 million in annual revenues.
! Redevelopment of historic buildings is a largely untapped opportunity: Many, if not most, of Cantons downtown commercial buildings could be eligible for federal and state historic rehabilitation tax credits, providing as much as 45 percent of the financing needed for building rehabilitation. In addition to encouraging greater use of incentives like these, the city will need to address some zoning and building code issues, carefully craft a solid business development strategy, and retool its incentives for downtown business and housing development.
! Employment taxes might be discouraging population growth: Canton provides many opportunities for business owners to exempt property taxes. But the citys two-percent employment tax may be undercutting the citys ability to retain workers and attract new businesses.
! Attendance at sports halls of fame is dropping throughout the US: After a decade or so of declining attendance, the Football Hall of Fame saw a modest increase in visitors in 2013. Declining attendance at sports halls of fame appears to be a national trend, as a younger generation of fans turn to the internet for sports history. The baseball, NASCAR, hockey, and basketball halls of fame have all experienced declining attendance. For Canton, this suggests that diversifying its tourism offerings might be a more sound strategy than expanding the Football Hall of Fame.
! Energy-related research and production could offer great potential for new business growth: The number of energy-related businesses in Canton and Stark County is already growing, from fuel cells to wind energy. And, with exploration and extraction of oil and natural gas from the Utica shale, there could be opportunities to attract a wide range of supportive businesses, from engineering companies to prototyping maker-spaces to specialized marketing firms. Canton could likely boost its share of this new economic growth by concentrating energy-related businesses together in a walkable place (like downtown Canton), encouraging collaboration and cross-pollination of ideas, and by providing targeted tools and incentives to stimulate development of both energy-related businesses and businesses that provide support to them (e.g., specialized coworking spaces and business accelerators, access to private-sector equity, and tax incentives scaled for smaller businesses).