Hillsboro City Council holds public hearing on TIF district proposal

Hillsboro City Council hosted an eight-minute public hearing Monday, Nov. 18 to discuss legislation for a proposed Tax Increment Financing (TIF) district in the Fairground Road/Pea Ridge Road area.

The city’s attorney Andrew Spoor, of Keating Muething & Klekamp, was on hand to answer questions, although only two residents were in attendance. All members of council, as well as Mayor Justin Harsha, safety and service director Brianne Abbott and public works superintendent Shawn Adkins, were also present.

As previously reported, council approved a resolution for an economic development plan for the proposed “Fairground Road Incentive District” as an emergency at their Thursday, Oct. 17 meeting.

According to the legislation, the district is being proposed to “host a mix of single-family attached, detached, multiple-family dwellings and commercial uses.

“The Incentive District will include single-family homes, multiple-family homes and two-family dwellings within the portion that is zoned Residential B,” the plan says. “The Incentive District will also include a commercial venue in the portion zoned Residential A, and the Business and Residential D portion can be a combination of permitted uses. It is expected the Incentive District will ultimately contain 50 to 60 homes.”

For infrastructure improvements to this area, it is proposed that the “Incentive District” — which totals 24.3 acres — will be a tax increment financing (TIF) district.

The Ohio Department of Development defines a TIF as “an economic development mechanism available to local governments in Ohio to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation. Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed toward a separate fund to finance the construction of public infrastructure defined within the TIF legislation.” The city has utilized this for many developments in the past.

During Monday night’s hearing, one resident asked what “opportunities” are available through the TIF.

“The main effect of it is that it's called a tax exemption, where essentially it’s exempting the incremental increase in taxes that would have otherwise happened on the site by further development,” Spoor said. “In practice, it's invisible to the property owner, one way or the other, in terms of the cost. It doesn't increase or decrease the taxes on the site.

“It’s an accounting measure, primarily at the county level, and so the taxes, which would normally go into the county and be distributed to the multiple tax districts — the schools, the city, fire districts, things like that, the county — are changed, and they are distributed in a different way.”

In October, Spoor explained that the city is seeking a 75-percent, 10-year TIF “to capture some incremental value — primarily in this case, to offset the city's expenditures that it incurred on public infrastructure for that development” in connection with the Roberts Lane extension.

“This particular TIF is planned to be a 75-percent, 10-year TIF,” Spoor said Monday. “What would happen is 75 percent of the incremental revenues generated from the site would go to the city, and then the city would use those revenues to help defray the cost of public infrastructure that's necessary to develop that area, so mainly roads, sewers, things like that. It would take that off of the city's general fund, so the city could expend the general fund on other things like police, fire and things like that.”

One of the residents in attendance asked if the Hillsboro City Schools district will “lose money” under this proposal.

“In this particular situation, the school district would lose money for that 10-year period,” Spoor said. “The way that Ohio law works is that there’s multiple varieties of TIF that you can do.

“For that 10-year period, because 75 percent of the tax bill will effectively be going to the city, it will affect the revenue that goes to the school district for that period of time. The remaining unexempted 25 percent of the property will be distributed to the school district in a normal fashion.”

Spoor, who also clarified that this particular TIF does not require school district approval, added that the district’s tax “revenue is reduced … but it's not reduced to zero.

“They get a smaller portion,” he said. “The theory behind tax increment financing is that by financing public infrastructure improvements, by the time the TIF burns off in 10 years, the tax base will have risen significantly because additional improvements have been made. So for example, you put roads in, and houses are built around it, and so when it wears off, there'll be more revenue for everyone, including the school district.”

Council president Tom Eichinger pointed out that the Hillsboro City Schools district is “never going to have less than they have right now.

“They'll actually get 25 percent of the new value more until the 10 years, and then they'll get it all,” Eichinger said.  

“As the property value goes up, the taxes go up,” council member Kathryn Hapner added.

One resident asked what infrastructure the TIF is covering, since “the road’s already” been built.

Adkins and Eichinger explained that the revenue from the TIF will help pay off infrastructure loans not covered by grant funding for the multimillion-dollar road extension project.

One of the residents asked which parcels are involved in the plan and was given a copy of the maps for the proposal.

The proposal includes parcels 25-10-000-142.11 (120 Ivory Lane), 25-10-000-142.10 (unnumbered Pea Ridge Road), 25-10-000-142.09 (7607 Pea Ridge Road), 25-10-000-142.08 (7609 Pea Ridge Road), 25-10-000-142.07 (7611 Pea Ridge Road), 25-10-000-142.06 (7613 Pea Ridge Road), 25-10-000-142.05 (7615 Pea Ridge Road), 25-10-000-142.04 (7617 Pea Ridge Road), 25-10-000-142.03 (7619 Pea Ridge Road), 25-10-000-142.02 (7621 Pea Ridge Road), 25-10-000-142.01 (7623 Pea Ridge Road) and 25-10-000-142.00 (unnumbered state Route 73).

(For more, see the two maps included with this article.)

A resident also asked whether the zoning of the parcels was affected by the TIF proposal.

“This is purely a tax accounting measure,” Spoor said. “It doesn't change zoning. It doesn't change land use. It's just that instead of the taxes being distributed in a normal way, they are temporarily diverted, 75 percent to the city to offset public infrastructure costs, for a 10-year period.”

Abbott and council clerk pro tem Lauren Walker, who is also the city’s economic development coordinator, further clarified that the parcels are zoned for residential use, including single- and multi-family dwellings.

Eichinger thanked the residents and council members for attending the hearing.

All of the information discussed Monday is still pending approval by council next month.

As explained by Spoor in October, legislation for the proposal is “on a fast track,” with law requiring council to consider the ordinance not more than 30 days after the public hearing.

“If the TIF is not passing this year, those projects will be most likely put on the tax rolls starting for tax year 2025,” Spoor said in October. “If you pass the TIF at that point, you would not be able to capture that incremental value of the TIF, because it would be too late, so the reason for the time crunch on this one is essentially to capture the full value of those incremental improvements.”

To accommodate for that legislation, council has pushed their December meeting date back to Dec. 23 at 7 p.m.

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