Council moves to fund Center for Business and Education
- Published: September 26, 2013
At its Sept. 16 meeting, Village Council took a first step toward approving a Tax Increment Financing, or TIF, funding mechanism to pay for $700,000 in remaining costs for infrastructure development at the Center for Business and Education, or CBE. In recent years the Village has taken on oversight of the project, which was originally developed by Community Resources.
Council members Judith Hempfling, Gerry Simms and Karen Wintrow unanimously agreed to move ahead; Rick Walkey and Lori Askeland were both absent. Council requested that a resolution to approve the TIF be prepared for Council’s next meeting, on Oct. 7.
“It’s a large investment, but one that will repay the Village and local schools in property tax and jobs,” Wintrow said. “We’re being asked to take a little bit of a gamble but I think we’re in a position to do that.”
At Council’s last meeting CR Board Member Jerry Sutton made a request from that group that the Village fill the funding gap for the CBE that was left when a Ohio Department of Transportation grant for about $344,000 was rescinded earlier this year. The grant was dropped due to the delay in developing the CBE, which has been in the design phase for over five years. In an earlier interview, Sutton linked the delay to the extended period around the Village submissions to ODOT of engineering designs, and ODOT’s request for changes. The Village had contracted with Jacobs Engineering for the designs.
The total amount needed to finish the project is $1.1 million.
The Village also has a federal Army Corps of Engineers grant of $412,000 for the project, along with $27,000 from Community Resources and $50,000 from the Township Trustees.
Sutton repeated the CR request at Council’s Sept. 16 meeting. Because the Village had earlier agreed to oversee the state and federal grants for the project, it has a “moral obligation” to follow through on finishing the project, he said. And the project will be a significant boost for local economic development, Sutton said, citing his own study that projects that, once filled with businesses, the CBE will bring to the Village about $800,000 annually in property and income taxes, versus the $250 currently paid in property tax.
“From $250 to $800,000, it’s a straightforward business decision,” he said.
Attorney Margaret Comey of the Cincinnati firm Squires Sanders presented information on funding options for the CBE, using the higher figure of $700,000 to allow for 10 percent in cost overruns. Along with the amount needed to fill the gap, CBE promoters are also concerned that further delays could result in losing the USACE grant, resulting in a far larger total cost for the project, so that time is of the essence.
“A key objective is to move ahead quickly to protect the $412,000 federal grant,” she said.
Given the need for speed and flexibility, Comey recommended the TIF funding mechanism, which allows the Village to leverage future property tax revenues from the CBE to pay for current infrastructure improvements. After the property is developed, and businesses occupy the space, the Village would receive the amount that the businesses normally pay for their property tax, and use that revenue to repay the original loan. The TIF would also affect local schools, which receive a larger portion of property tax, by delaying the amount that they receive, although it would not diminish that amount, according to Comey. However, the Village should discuss the TIF with the school district to clarify the funding option, she said.
The TIF would be in the form of bond anticipation notes, or BANs, which are bond notes that are renewed yearly, as compared to the longer-term financing of a fixed term bond, according to Comey. The Village could move ahead faster with notes rather than bonds, according to Comey, who recommended them due to their relative speed. Because it takes about 90 days to create a TIF area, the Village could move ahead on financing by early 2014.
“This is an important tool for economic development,” Comey said. Village Manager Laura Curliss, who was not at the meeting, also recommended the TIF in a written memo.
In the years it takes to complete the CBE before business owners begin paying property tax, the Village will pay about 1 percent, or $7,000 yearly on interest on the TIF, according to Comey. That amount is available in a fund for Village economic development, according to Hempfling, although Council could also elect to pay it out of the Village general fund budget.
In other Sept. 16 Council business:
• Council unanimously approved a resolution naming Kent Bristol as interim Village manager after Curliss leaves her job on Oct. 2. Bristol is this week meeting with the Village departments and next week will be oriented by Curliss, who is taking vacation this week.
• Council approved the second and final reading of the revised Village zoning code, which has taken two years to develop.
“It’s a great document, worthy of our two years of work,” Wintrow said.
• Council heard a request from Mary Cargan of the Fair Acres neighborhood about the need to repair that area’s subpar streets. Council is planning to discuss needed repairs at its next meeting, Hempfling said.
• Council approved a contract with Village Solicitor Chris Conard for the coming year.
Council’s next meeting is Monday, Oct. 7 in Council chambers.