Springfield City Commissioners held public hearings last week on the two Tax Income Financing (TIF) abatements, praising developers for finding a new strategy to work with the school district and provide compensation.
Some previous tax abatement debates have led to conflicts involving the city, the developers and the schools. New housing developments mean more students for the school district, but tax abatements can mean the district doesn’t get additional funding to help manage the increased enrollment.
Credit: Bill Lackey
Credit: Bill Lackey
“Moving forward it’s important that developers engage and work with the Shawnee School District to help develop a plan that works for both the developer … as well as the school district,” City Manager Bryan Heck said. “One of the challenges for the school district is really up-front capital dollars. ... The school district has to be able to plan ahead, for the expansion of classroom space, buses, those types of things that take a while to plan out and put into action. Having up-front access to dollars is important.”
The TIF deals for the Sycamore Ridge and Maple Grove projects are 30-year, 100% abatements. But they come with compensation agreements saying the developers will make “upfront payments in lieu of taxes” to the school district. The Sycamore Ridge agreement estimates the payment at $920,355, and the Maple Grove document lists an amount of $395,543.
Clark-Shawnee school Superintendent Brian Kuhn made clear that the current tax-abatement legal structure (whether tax-increment financing, or community reinvestment areas) is not ideal for schools, but that the district is doing its best within them.
“The Clark-Shawnee Local School District and its Board of Education continue to advocate for legislative change related to TIF, CRA, and other forms of financial incentives that divert tax revenue away from public schools,” Kuhn said. “Our district has conducted good-faith negotiations with the developers for Maple Grove and Sycamore Ridge to arrive at compensation agreements that are fiscally responsible based on the laws in effect at this time.”
The Maple Grove subdivision is being developed by Premier Property Sales, led by local builder Clay Chester, who worked with Clark-Shawnee on their compensation plan.
Chester thanked the city commission and observed that the term “TIF” evokes different responses from the various parties involved.
“For the developer, it’s a necessary tool. For the city, it’s an opportunity. And for school boards it can be met with hesitation,” Chester said. “On each side of that spectrum, all those feelings are very valid. When you dive deeper and see the real purpose of TIF laws you can see that the intent is more evenly spread and it’s mainly incentivizing growth while balancing risk.”
Heck also commended Sycamore Ridge project developer DDC Management for working closely with the Clark-Shawnee School district.
Mayor Rob Rue said affordable housing is an issue not just locally, but across the country. He commented that “the state of Ohio is behind on housing. The fact that we are having engaged and increased housing opportunities in Springfield is excellent.”
Credit: Bill Lackey
Credit: Bill Lackey
Assistant Mayor David Estrop said the city has benefitted from recommendations offered by the Housing Consortium and Ohio Policy Center to improve housing in Springfield.
“We have implemented most if not all of them, and it’s great to see the benefit of that work now coming here to allow this community to grow and expand and become more vibrant,” Estrop said. “... We’re getting to that point to where we find it easier to work together … and this is just the beginning. I want to applaud everyone for their very meaningful work on behalf of the people of Springfield and people who will be new to Springfield.”
Chester said both developers and school districts have to absorb most of the up-front financial risk and receive compensation following the success of such projects. In discussions with the school board and the city, he said ultimately they all share the same goal.
“We just had to figure out the right path on getting there. And I think we really brought it together,” Chester said. “With the city, the schools and the townships working together as a community, it will take us a lot farther than working in isolation. Hopefully, as Dr. Estrop said, this is the start of great things to come.”
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