Clinton Township officials have chosen to partner with Grandview Heights instead of Upper Arlington in a deal to share income taxes from new and existing businesses within the township.
Clinton Township trustees March 20 voted unanimously to create a Joint Economic Development Zone with Grandview.
In doing so, the trustees rebuffed offers from Upper Arlington, which was hoping to collect a portion of income-tax revenue from businesses located in the township.
"As the board reviewed proposals from both municipalities, it was Grandview that had the better deal for Clinton Township," said township Trustee Paula Armentrout. "We feel confident and secure with Grandview."
Grandview Mayor Ray DeGraw said the township approached the city to gauge its interest in a potential partnership.
"We thought we were a good match because of the size of our respective communities are fairly comparable," DeGraw said.
Another favorable factor was the development activity at the Grandview Yard project near the township's west side, he said.
If the agreement goes through, Grandview would collect income taxes from businesses in the township.
Under Ohio law, townships are prohibited from collecting income taxes, but may form a JEDZ with a municipality.
Typically, under JEDZ agreements, the municipality and township then share tax revenue.
"I think one of the other main factors (for Clinton Township's decision) is that they will be able to gain more revenue with us than other communities" because of Grandview's 2.5-percent income-tax rate, DeGraw said.
Under the preliminary agreement with Grandview, the township would receive 80 percent of the net proceeds of income-tax collections and the city would receive the remaining 20 percent, he said.
After voting to move forward with Grandview, Armentrout said, the township now is working with legal counsel to draft the formal terms of the JEDZ. That document also will need trustee and council approval.
If that occurs, she said, the last step in the process to establish the JEDZ would be approval by township voters, possibly in November.
DeGraw said Grandview City Council will need to approve legislation authorizing the city to move forward with negotiating a final agreement and also later would have to give its approval to a joint economic development zone contract and a cooperative economic development agreement with the township.
If each step occurs, Grandview would be authorized to implement its 2.5-percent income tax against Clinton Township businesses located within the JEDZ.
Upper Arlington Community and Economic Development Manager Bob Lamb said Upper Arlington offered the same 20-80 split of income taxes, but township trustees preferred to go with Grandview and its 2.5-percent income tax, as opposed to the 2-percent income tax Upper Arlington currently imposes on its businesses.
"They've decided to go with Grandview because of the 2.5-percent payroll tax," Lamb said. "The board felt 2.5 percent was a better deal for the township due to the increased revenue they would be collecting."
Lamb noted Upper Arlington's proposed 20-80 split of income taxes was its "final offer." Earlier, the city proposed 35-65 and 50-50 splits with the township.
Armentrout said Upper Arlington's proposal for a 20-80 came at the last minute after Grandview already made its offer.
"(Upper Arlington) was not willing to work with us until the 11th hour when they were desperate," she said. "While we were in negotiations with Grandview is when that offer came on the table.
"That (20-80 split) is what we had been telling them we wanted all along."
Armentrout said she's hopeful the JEDZ agreement will be finalized and township voters approve it. She noted it won't be a new tax on anyone unless a resident also works in the township, because residents who work elsewhere already pay income taxes to the municipalities where they work.
Clinton Township Trustee Carl Reardon said "both proposals were good and both communities work well with the township," but added that Upper Arlington's offer of a 20-80 split came too late.
Additionally, he noted the arrangement with Grandview will yield more revenue.
"Grandview will be collecting at 2.5 percent," Reardon said. "At the end of all the calculations, the township will be getting 1.9 percent."
Exactly how much additional revenue the agreement would provide Grandview is uncertain at this point, DeGraw said.
Lamb speculated the JEDZ could generate about $1 million in annual taxes to be divided by the township and its partner.
"We were using $1 million as a rough estimate, but that was truly a rough estimate," he said.
Currently, Upper Arlington provides fire and emergency-medical services to Clinton Township.
Lamb said Upper Arlington would be willing to reopen talks with Clinton Township, should its deal with Grandview fall through.