Special assessments taxes on personal property may end up helping to fund the city of Avon’s portion of the I-90 interchange to be built at Nagel Road.
Talk of assessments were discussed during a March I-90 Nagel Road interchange stakeholders’ meeting when Planning Coordinator Jim Piazza said the city is in the early phase of determining whether assessments would be pursued.
City officials stated in the past the city would pay one third, the Jacobs Group would pay one third and the final third would be paid for through city TIFs (Tax Increment Financing). But the funding for the final third is not determined at this point. The project cost now is estimated at $20.8 million.
Kathy Herbst, whose husband is a stakeholder, said she hadn’t heard anything about assessments until after the last stakeholders meeting. She was under the impression the last third would be paid through TIFs.
“And all of a sudden they are going to assess the people who live around the interchange,” she said in an interview.
Avon Mayor Jim Smith said Friday the city’s intent all along has been the remaining third will be paid “by development in the area,” which includes TIFs and possible assessments.
Herbst’s husband, sister-in-law and brother-in-law own a 38-acre property that backs up to I-90.
“Our land is zoned residential,” she said. “In my mind, an interchange decreases the value.”
“It’s going to be a couple years of some tighter financial constraints,” Avon Finance Director Bill Logan said. “Two years from now the TIFs could be rolling … it depends on what’s on the tax duplicate.”
Avon uses TIFs for infrastructure in general, Logan said.
“A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation was approved,” according to the Ohio Department of Development Web site. “Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed towards a separate fund to finance the construction of public infrastructure defined within the TIF legislation. A taxpayer whose operations are located within an Incentive District TIF continues to make payments to the jurisdiction in an amount equal to the real property tax liability that otherwise would have been due had the property not been exempted. These payments in lieu of taxes, or Service Payments, are collected by the county treasurer in the same manner as real property taxes, but are deposited into separate public improvement tax increment equivalent funds.”
The Avon Local School District doesn’t lose anything with Avon’s TIFs, Logan said.
“They will get the same thing they would have gotten if the property wasn’t TIF-ed,” Logan said.
Logan said the county pays the city and the city turns around “and gives the schools their share.”
The city is looking into special assessments, which could be placed on property owners who benefit from the interchange being built, Logan said.
“We’ve not decided,” he said. “About a year ago, we hired a third-party real estate firm to do a special assessment study.”
City Council approved a reappropriation in March 2009 to advance $50,000 into the I-90 Interchange Study Fund. “to allow the city to engage a professional services firm to conduct a study for the Interchange Project, and to allow for related legal or other professional fees that may be incurred.”
The special assessment study is covered under that reappropriation, according to Avon Clerk of Council Ellen Young.
The firm, Collier’s Ostendorf Morris, is still conducting the study, Logan said.
Special assessments could be limited to the surrounding area, Logan said, adding that most of it is zoned commercial or industrial.
Should special assessments move forward, they would have to be reviewed by an equalization board, Logan said. At that time, residents could contest whether their property would stand to gain from the interchange.
Smith said assessments would probably be “spread over a wide, wide area.”
“We’ve heard 700 acres, and then I heard 1,500 acres (around the interchange will be assessed),” Herbst said, adding she’s heard the assessments will be placed on undeveloped property.
In response to those numbers, Smith said, “It’s going to be significant. It’s not going to go into housing subdivisions or anything like that. All the property around the interchange that is vacant will benefit significantly from the interchange.”
“In general, assessments are paid off over a 20-year period,” Smith said, though they can be paid off in a one lump sum.”
Smith said the assessment would work on “rings,” from those who benefit the most to those who benefit the least.
“They are still refining everything before they have a document that is presentable,” Smith said of Colliers Ostendorf-
Morris. “I hope before the middle of June or July … (to) have everything done (with the financing package).”
Some stakeholders will have their property acquired by the city, with a price paid for the land not taking into account the interchange improvement. And yet, it’s possible they could then be assessed by the city for benefiting from the interchange, Herbst pointed out.
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