Dover officials defend TIF agreements as economic development tool
DOVER – City officials defended tax incentives they have used to attract businesses and developers after being challenged by a School Board member Monday.
Brian Hanner, who said he was speaking in a personal capacity and not as a School Board member, asked Council to find a way to support a new housing development without taking away future revenue from the schools.
“Give due consideration to reducing the cut to the school system that this would cause,” Hanner said. “More students with less overall revenue to the school district will require being back on the ballot for operating dollars by the school sooner rather than later.”
Hanner argued the district will incur more expenses from new students moving into a proposed housing development in north Dover. Mayor Shane Gunnoe said the 50 condos in that development will bring in almost no new students.
City Council is considering a TIF (tax increment financing) agreement for that development – a 30-home, 50-condo subdivision. The arrangement would set aside half of new property taxes for 10 years to pay for new roads, sewers and other infrastructure.
Gunnoe says Lawver Homes and other developers would not build in Dover if not for TIF agreements.
“But for the TIF, this would not be financially viable project,” Gunnoe said.
Council President Justin Perkowski said the school district will still receive new revenue from the development.
“My feeling when we made that decision was 50 percent of something is better than 100 percent of nothing,” he said.
City Council will likely vote on the TIF agreement in May.
CITY OFFICIALS SAY TIF AGREEMENTS BRING ECONOMIC DEVELOPMENT
Gunnoe says without tax incentives, a large manufacturer and residential developer would not be building in Dover.
City Council approved TIF agreements with the Schaeffler Group and Lawver Homes for their recent projects. Those agreements set aside a portion of new property tax revenue to pay for infrastructure work like roads and sewers instead of requiring the developers to pay for that up front or in addition to property taxes.
TIF agreements cut into new tax revenue for the schools and city, but Gunnoe says it is a common method used to attract businesses.
“Franklin County has done 373 of them. Stark County has done 68 of them. Muskingum County, which is smaller than us, has done 22 of them,” Gunnoe said. “They are the primary tool that is used to drive growth for projects where the infrastructure would maybe otherwise not be available.”
Hanner, who emphasized he was speaking in his personal capacity, challenged Council to find a way to attract businesses that does not take away future property tax revenue from the district.
“Find a way to lessen the impact of this TIF on what is arguably the first thing families inquire about when then look to relocate – how are the schools,” he said.
Gunnoe said they have already explored other options.
“But for the TIF, that project will very likely not occur,” he said. “Unfortunately, we looked at the non-school TIF. We looked at other options. I did everything in my power to make sure that the schools were as protected as possible through this process, but the math is still the math.”
Gunnoe says the school district will still receive about $120,000 a year in new revenue for the 10 years of the TIF agreement, then about twice that when it expires.