September 11, 2003

 

Council says it supports list of 9 economic incentives

Village Council indicated last week that it may be willing to make available nine different economic incentives to companies which develop or locate in a local commerce park.

Council plans to present the list of incentives to the Miami Township trustees when the two boards hold a special meeting later this month, at which time, Council president Tony Arnett said in a memo to Council, they hope to “achieve joint resolution on incentives to make available” for the park, which Council and the trustees have agreed to work on.

Arnett also said that he hopes Council will not limit itself to providing incentives only for a commerce park, but instead will create a policy stating the incentives the Village would offer businesses, including existing companies. Creating a policy would let the community and future know under what parameters the Village would offer financial incentives to businesses.

The list of incentives includes tax abatements, subsidies for utilities and loan assistance through the Village Economic Development Revolving Loan Fund. Council members said that there was not one item on the list that they opposed using, at least in principle.

This response seemed to please Village Manager Rob Hillard, who said that the Village has to make available different financial incentives for businesses. He stressed the need to tailor a package of incentives for a specific business “that makes sense” for the schools and the community.

As part of a Greene County enterprise zone, the Village may provide abatements of up to 75 percent for personal property taxes or real estate taxes on improvements made to existing facilities or new buildings. Abatements can last for up to 10 years, but they cannot be applied to retail businesses.

Hillard said that offering tax abatements has become such an established practice the Village has to make abatements an option.

In an interview this week, Tom Haugsby, president of the Yellow Springs school board, said that school board members recognize the long-term benefits the community and the school district would realize through economic growth. Therefore, board members, he said, are “generally supportive of tax abatements to support and provide for economic growth.”

Council’s list also includes rebating income tax for a period of time. Income tax revenue makes up over 60 percent of the Village’s revenue for general fund activities. Hillard said that income tax breaks are not widely used and that is the one item on Council’s list that makes him hesitate.

The list of incentives includes subsidizing or reducing rate structures on Village utilities and reducing or eliminating utilities hookup fees. The Village could also seek grants to extend water or sewer lines for a business or provide assistance with stormwater management plans.

Council member Denise Swinger said that she would be concerned with subsidizing utilities rates if that practice became an expense for the Village. For example, the Village could not lower utility rates in a situation where the Village loses money on a business.

Council’s list also includes offering industrial revenue development bonds and allowing a business to borrow against future taxes to pay for improvements.

Based on a suggestion by Swinger, Council agreed to add another idea to its list: to be more creative with the Revolving Loan Fund, which has been used sparingly in recent years to fund the creation of new jobs for lower-income people at local businesses. For instance, Swinger suggested that the Village could use the loan fund to pay the relocation costs and hookup fees for telecommunication systems for businesses that move to town.

Council must still strike an agreement with the Miami Township trustees on the incentives the two boards will provide to people who develop or occupy a commerce park, as part of a Cooperative Economic Development Agreement (CEDA). The CEDA states that Council and the trustees will work to promote a commerce park and provide services to and share tax revenues from the park. Under that agreement, Council and the trustees must agree on incentives that would affect the Township’s revenue from the development.

The agreement designates two areas for possible development: 46 acres of farmland at Dayton-Yellow Springs and East Enon Roads, which is owned by Vernay Laboratories, and almost 40 acres of farmland on the east side of East Enon, which is part of the Pitstick farm. However, since a member of the Pitstick family plans to build a house on the land, 32 acres of the Pitstick property is now available for this project. Both properties border the village limits on the west, and any land developed under the CEDA would be annexed into Yellow Springs.

When Council and the trustees meet on Monday, Sept. 29, Arnett said that he anticipates the trustees will have a similar discussion to the one Council had last week, focusing on, in this case, what kind of incentives the trustees are comfortable offering.

Chris Mucher, president of the Township Board of Trustees, said that while the trustees need more information “on what is traditional and proper,” the board is “interested in discussing incentives.”

He said that in “this economic day and age” a financial package is “probably necessary in order to attract the type of commerce we’re interested in promoting.”

—Robert Mihalek