Council considers tax plan
Tiffin City Council members were briefed Monday night by Seneca Industrial and Economic Development Corp. personnel on a development across from Mercy Health – Tiffin Hospital.
SIEDC President and CEO David Zak said the organization has been working since March 2016 on development of a 60-acre site for commercial and retail use located between South Shaffer Park Drive and TR 18.
He said a project of this size traditionally would be taken on by a private developer, but he commended the city for its work.
“Typically, it’s not how it’s done … but welcome to Tiffin.” Mayor Aaron Montz said. “When businesses want to come here, we bend over backward.”
Montz said when a healthcare business showed interest in the site, the city had to “step up.”
He said the development could bring 110 full-time jobs and a $10 million investment on about eight acres of the site. Projected annual payroll for the business is $3.4 million.
“There’s no telling what else will come here,” Montz said. “This is one of the most exciting projects I’ve been involved with during my time here.”
In February, council approved plans to design two new roads for access to the 60-acre site. The parcel was annexed from Hopewell Township in 2016.
One of the roads is to be named Progress Parkway with the other being an extension of Fair Lane. Fair Lane will enter the site as a continuation of TR 18.
Zak said the city will need to invest about $4 million in infrastructure, including roads, sidewalks and water lines, to make the site attractive to developers. One prospective business is willing to invest $500,000 in sanitary and sewer infrastructure to support development of the entire site.
He said the city does not have $4 million available, so SIEDC proposed to fund the infrastructure with Tax Increment Financing.
According to the Ohio Development Services Agency, TIF is an economic development tool to help finance public infrastructure improvements.
Zak said the TIF will divert tax revenue so the city can fund infrastructure for the site through bond payments.
The first TIF proposal, which will be introduced to city council at a special meeting at 7 p.m. Wednesday, is for Aldi, 2124 W. Market St. If approved by city council and Tiffin City School Board, the value of a $600,000 expansion at Aldi could be captured by the entities through the TIF.
School board approval is needed because school districts in the area of a TIF project that generates annual payroll for new employees of $1 million or more — in this case, development of the 60-acre site — are entitled to a tax-sharing deal. According to the Ohio Development Services Agency, state law mandates that the income tax revenue generated from the new employees be divided 50/50 between the school district and the city.
Zak said the proposal for the Aldi TIF is a 100-percent, 30-year agreement, with 10 percent going back to Tiffin City School District and Vanguard-Sentinel School District combined.
The arrangement does not give tax breaks to businesses but diverts tax income to pay bond payments for infrastructure for future development at the site.
Tiffin City School District’s board is to meet today to discuss the tax-sharing agreement. Wednesday, council is to vote on the TIF agreement.
The city also plans to discuss minor budget changes for 2018 Wednesday.
In other business, Montz said he was disappointed in a decision by Seneca County Board of Commissioners on parking in county lots downtown.
A joint parking committee had recommended that two parking lots be designated for county employees during business hours and a third lot would be reserved mostly for the public. Instead, commissioners agreed to divide each of the three lots between county government parking and retail customers.
Montz and Council President Mark Hayes were disappointed commissioners did not heed the advice of the parking committee.
“To give prioritized parking to government employees is wrong,” Montz said of the adopted plan.
He said he will continue to attend parking committee meetings in hope of improving parking for businesses.
Councilman Rich Focht said the city should keep working on a better solution.
He said as more downtown businesses open, the need for parking for customers increases.
“Those spaces have more value for business use than having a nice place for county employees to park,” Focht said.