MINUTES
Special Meeting for General
Business
Chairman Don Butler opened the meeting at
This presentation is regarding the potential creation of a
Community Reinvestment Area (CRA) tax abatement zone in the area of
It’s a very flexible tool because it does allow communities to incentivize certain kinds of retail projects. What we are looking at here, obviously everyone knows there is potential for development here by the Chippewa Partners project, I think this is a good idea to create this zone in this area which has a lot of potential for development whether or not this development actually happens. It creates an area where you can incentivize future development and basically use it as a tool to attract what you want to that community.
What I have put together is a proposed piece of legislation
that would need to be passed by the
I have also approached the superintendent of Cloverleaf Schools to let him know what we were working on. I have a tentative date to appear before the entire school board, either the first or third week of March, to explain what we are working on so they can understand how a CRA works. Last week I had talked to the Medina County Commissioners in a discussion session and reviewed this legislation with them. The direction they gave was basically they would work to approve it but it really depends upon what the township trustees want and what the school board will approve as well. They are leaving it to local control to create this and set up specific guidelines. There were a couple of items that I particularly wanted to review that will need clarification.
The first page is the format of the resolution and is
dictated by the guidelines put together by the state of
The second page gets into the legislation itself. The boundaries outlined were obviously internal to what is outlined in yellow on that map. I put in a couple of minor changes to take into account the fact that if you don’t specifically say that parcels on either side of the road – if you don’t specifically say that it’s on either side - then the State views it as anything internal to those boundaries are in the zone. Because there were some structures on the north side of Chippewa Road (the National City Bank building and some other stuff) in order to capture some of those redevelopment opportunities, I changed the legislation slightly to indicate that on that Chippewa Road boundary it would include parcels that front on that border.
I wanted to bring to your attention the particular divisions
of tax abatement. The state of
Trustee Bowers – Given the area we are discussing there’s not a lot of area for new homes down there anyhow and I wouldn’t want to incentivize it.
Trustee Kehoe – As far as I’m concerned, you can take it out.
Trustee
Dentler – I will take Division C out and redo the divisions. Going back to Division A and B, are those percentages in the Tax Abatement Schedule, which are 100% for the first five years and then on a sliding scale for the next four years, where did you want to go towards what the maximum allowable is? For a fairly minimal investment or cost there is no cost to the township to allow this kind of thing and it’s a very good return for your dollar.
Trustee Bowers – Where it says 100% - that’s not 100% of the tax abated, that’s 100% of the taxes on the value of the improvement. So the township would stay at the level we are at now and continue to collect the taxes that we collect now – it’s the value of the improvement that would be phased in over a period of time.
Dentler – On that point, land is never abated with the CRA program. We are only abating a percentage of the value of the improvement. So Division A and B are in line with the scale, does that work. By consensus of the trustees, it will be kept as shown.
Dentler – In this CRA legislation there has been no deadline
for homeowners to apply for the abatement.
The homeowner does the work and then let the Housing Office know it’s
been done and then the credit is given.
Homeowners don’t apply for it ahead of time like is required to be done
in commercial/industrial. The State has
recommended that a community set a time limit when the homeowner can come and
ask for abatement.
Trustee Kehoe – I think we need to stick with six months. It’s adequate time for homeowners to learn about it and do something and even then they have six months after the project is finished to apply.
Dentler – I would recommend that wherever homeowners go to apply for permits that they get information about this program so they are aware of it from the beginning. By consensus of the trustees, it will be kept as six months.
Dentler – Division D deals with the remodeling of existing commercial and industrial facilities. The twelve-year term is the maximum allowed by law for a commercial remodel. That’s fairly standard throughout the country. The State actually allows a minimum of $5,000 to be invested in a commercial remodel but in my experience it is not likely to significantly increase the value of that structure. I would recommend the $20,000 shown as a reasonable amount that could increase the value of the structure and make the program worth it. Consensus of the trustees was given.
Dentler – For both Divisions D and E dealing with commercial/industrial facilities, which does include retail by definition of the State, the tax abatement percentages have to be negotiated ahead of time before any ground is broken. There needs to be an agreement reached with the property owner as to the term and percentage of the abatement and it has to be approved by law. It’s not automatic.
Trustee Kehoe – Who approves the negotiations?
Dentler – The Housing Officer, which would be me if you
choose to have me, as the Director of the Medina County Economic Development,
serve as the Housing Officer. We usually
work with the community to make sure you’re on board with the terms that are
being negotiated. It goes to the
Dentler – Even though the State allows a maximum exemption of 100%, what I’ve put in here is a 50% level, which is something the State is recommending. Any project above 50% is required to be negotiated with the school district. So 50% is the level but if it’s above 50% then you have to get the school board involved and they have to sign off on it and they have the right to have a 45-day waiting period, which can hold up a project if it’s just a remodeling. In all of these processes we will inform the school board.
Dentler – The last paragraph in Division D where it talks about retail project with a construction cost of less than $3 million are excluded – it’s a clause to think about. Most communities don’t want to give an exemption up on retail projects, which are market driven and are going to come to a particular location anyway. If you’ve got a retail project where they are going to be spending more than $3 million that is more of a business attraction statement or a fairly large development where you would then want to incentivize to come to your area. I put that clause in both Division D and E but I wanted to make you aware of it and that you concur. Consensus of the trustees was given to leave that paragraph in.
Dentler – Division E is up to and including 15 years for the construction of new commercial/industrial facilities. What is shown is standard throughout the county with the newer CRAs. Some communities allow the township the ability to offer up to a larger abatement but 60% is probably the maximum I would recommend. The trustees would need to deem the project “extraordinary” to be allowed to negotiate up to 60% but anything between 50-60% would need the approval of the school board. That’s where the negotiations and the cooperation of the school board come into play. What we have done with CRA negotiations in other parts of the county is to require the business or the property owner to actually make side agreements with the school board that they would give back to the school board a certain amount of money each year that the school board otherwise would have lost in that 50-60% range. These are maximum guidelines but with commercial/industrial there is a lot of negotiating to get what you need.
Dentler – Responding to a question about the Chippewa Landing project, once this legislation is approved and put in to the Department of Development, this program would not be valid until we get the sign-off from the Department of Development. Once that happens we’ll have application procedures in place and whoever would want to develop in the area would then have to approach the township or myself and put an application in for a commercial/industrial/retail project. That’s when the negotiations would start.
Dentler – In response to a question about
Dentler – Responding to a question, there would have to be
two separate pieces of legislation because there are two separate
jurisdictions. Townships have to be
approved by the
Trustee Kehoe – If the Chippewa Landing development has already started, would they qualify?
Dentler – They haven’t broken ground – that’s really the definition. If they haven’t broken ground on a project. I believe you can do land preparation (clearing the ground) but if you start pouring footers then it is considered started and the State says it’s too late.
As to preparation of and putting in utilities, I would have to check on that. It depends on what they are paying taxes on. The tax abatement is for real property improvement so if they are putting up a structure they will be paying real property taxes on, then it is available. The Township isn’t losing any revenue by giving this kind of tax abatement because the township isn’t gaining anything right now. The township would be gaining revenues in the long-term by making sure that a program did happen. The township would be delaying the start of new revenue.
Dentler – I have found that no project is final until they sign on the dotted line. We work with companies all the time that show interest but nothing is really final until the buildings start going up. It would be uncertain whether this project would come in any way without a tax incentive. The State works with companies all the time that plan to do a project but unless they receive a tax abatement they are not likely to go forward and we see that a lot especially with projects on this scale.
Trustee Bowers – It’s important to make one other point
too. This project has not agreed to go
forward without any incentive. They came
in the door asking for a tax incentive plan.
They talked about that from day one.
The township doesn’t have the authority – that would come from the
Trustee Kehoe - Can you get some information and clarify the point about when this would be found available or if it would become available to Chippewa Partners – at what point would they not be eligible for the abatement as far as ground breaking etc.
Dentler – I’ll get that answer and get back to you.
Trustee Kehoe – We have a project in process right now and there’s been a lot of approval and a lot of time spent by our people approving this and they want to get moving plus they have a concern about the timing because of the bats that are out there or supposed to be coming back – what really constitutes starting a project. If it means they have to delay until September maybe that’s what they have to do for us to even consider giving them some kind of a tax incentive.
Trustee Bowers – The thing we have to remember as a community is our tax base on our residential is huge comparatively. Without business there is no jobs. Without jobs there are no taxes, no schools, no roads, no libraries, no parks.
Trustee Kehoe – I have a question on the legal description. You are stipulating in there that you are using both sides of the railroad track. Why are we considering property on both sides of the railroad? We had discussed this and we said these were the boundaries and we were not talking about going east of that railroad right-of-way.
After discussion, the consensus of the trustees was to
eliminate the words “and including parcels on both sides of the railroad” in
the last sentence of the description.
The consensus of the trustees was that “including parcels on both sides
of
Dentler – The other thing, as a result of creating this program two new councils will need to be created – Community Reinvestment Area Housing Council and a Tax Incentive Review Council. I would recommend to the Commissioners that we try to merge those two groups as much as possible to overlap the definition because truly you’ve got one area here and I don’t think it needs to be two different councils that meet once a year. The CRA Housing Council does have the extra responsibility to serve as an appeals board but there is usually no controversy.
Trustee Kehoe – I have a concern about the way you want to
merge those two councils together. You
have the
Dentler – My thought was that since both have to meet anyway to consider the same situation why not merge and have one larger board to save some effort. The categories of appointments are statutory and are required by law so there isn’t a choice in the category of those people. We don’t have to merge the boards. The consensus of the trustees is that the two councils are not to be merged.
Dentler - The changes will be made and the resolution
forwarded back to you. I would then
present it to the
Chairman Butler and the trustees thanked Bethany Dentler for making the presentation and she was excused from the meeting.
Continuation of Board of Trustees Special Meeting
Randall Powell, Carnegie Body, was here to pick up his check. There was a delay because the bill had been sent to the Fire Department instead of to the Fiscal Officer for payment. The warrants of the township will be paid. Mr. Powell indicated that he had deleted $6,900 from the bill because they had to put more money into the bodywork since
corrosion was heavier than expected but they billed according to the estimate, as they like to keep their word and want to keep the township as a customer.
Fiscal Officer Bailey explained relative to the budget, the appropriations, on the salaries for you it would be $34,000. She found the glitch and it has been corrected. The $418 is extra so it could come out to $34,418.80. The salary is actually $33,000 + but I rounded it to $34,000.
Fiscal Officer Bailey said there is the usual problem with zoning because even though it is appropriated the money isn’t there. Right now there is only $274 and that isn’t enough to do payroll, which I had planned to do today. Even though appropriations were done earlier the appropriations have nothing to do with what’s in the bank. The money has to be transferred from the bank. We have received two advances so far but those advances go into the general fund, not zoning. A resolution would be needed for $4,000 because the certificate of estimated resources shows $29,091.05 until it is amended and $33,000 was the appropriations amount that you wanted to show.
After discussion it was determined that zoning account
number 2181 would need $33,000 transferred into it. Trustee Bowers made a motion to transfer
$33,000 into zoning account number 2181.
Trustee
Kehoe – aye; Bowers – aye;
After further discussion there is an amendment needed for
the auditor’s office to send it along with the appropriations. Trustee Bowers made a motion to approve
Resolution 12-2009, Resolution to Amend the Official Certificate of Estimated
Resources for the zoning fund for a transfer to the zoning fund from the
general fund of $4,000. Trustee Kehoe
seconded the motion. Roll call
vote: Kehoe – aye; Bowers – aye;
There was discussion whether or not the cemetery fund would have the same problem but it was determined that the cemetery fund comes out of general and no salaries come out of it. As far as the certificate, the estimate is $4480.43 and we have $5539.75 in the bank so it is alright.
Fiscal Officer Bailey indicated there is also a problem for the fire department salaries. For fire you have overspent and we don’t have the funds. I had to transfer $50,000 today out of one of their Star Ohio accounts in order to cover all the bills that have come in. Payroll couldn’t be done today because there were not enough funds. To do their daytime staffing as well as their monthly salaries more funds would need to be transferred from their Star Ohio account. After discussion it was determined that fire has an investment account so nothing else needs to be done except for the transfer of funds, which the Fiscal Officer can handle tomorrow morning.
It was decided that the permanent appropriations would need to be reviewed before approving it tonight. Permanent appropriations need to be at the auditor’s office no later than March 31 so they can be handled at the next meeting.
Chairman Butler adjourned the meeting at
Approved: ___________ ________________________________
Donald Butler, Trustee
________________________________
Lynda Bowers, Trustee
________________________________
Lee Kehoe, Trustee
___________________________
Shirley Bailey, Fiscal Officer