Grove City could generate $100,000 a year in new revenue under a proposed economic deal with a pair of neighbors, but the deal is encountering opposition.
On Monday, City Council held its second reading of an ordinance authorizing a contract to create a Joint Economic Development District (JEDD) among the city, Scioto Township and the Village of Commercial Point. At the request of City Law Director Stephen Smith, council voted to postpone the vote until July 15.
Under state law, the township cannot impose an income tax, but under a JEDD agreement with a taxing municipality, it can apply a city's tax rate to an agreed-upon district and share the revenue with the municipality. According to the proposed ordinance, the JEDD would be used in "facilitating economic development, creating jobs and employment opportunities and improving the economic welfare" of the city, township, village and state.
"In essence, we're loaning our tax rate to the JEDD," Smith said. "This is a good opportunity to partner with our neighbors."
The revenue generated by the JEDD would be split among the three parties: 89 percent to Scioto Township, 10 percent to the city and 1 percent to Commercial Point.
City Administrator Chuck Boso said officials estimate the city will receive around $100,000 annually as its share.
The proposed contract would allow the city to use the money for any "lawful purpose."
"There's no drawback for us," said Council President Ted Berry. "We're just collecting."
The proposed district, to be known as the "Scioto Township Joint Economic Development District," would be comprised of three parcels: more than an acre at the northwest portion of of state Route 104 and Southern Street, within Scioto Township; half an acre of land within Commercial Point near Hiner Road, Strawser Street, Mattox Court and McCord Road; and 1,319 acres of land owned by the state in Scioto Township, near state Route 762.
The last property is the site of two facilities of the Ohio Department of Rehabilitation and Correction: the Pickaway Correctional Institution, 11781 state Route 762, and the Correctional Reception Center, 11271 state Route 762.
The proposal has drawn opposition from the Ohio Department of Rehabilitation and Correction, whose employees at the facilities will be impacted by the income tax.
"We do not support this because of the effect on our employees," said Trevor Clark, staff counsel for the ODRC. "The JEDD should be created for economic development to preserve and create jobs. The purpose is clearly not met here."
Clark said around 63 percent of the facilities' employees would be impacted.
"It's clear it's solely for generating tax revenue," Clark said. "There cannot be any fostering of economic development."
Smith said he plans to meet with representatives of the ODRC to discuss the matter, hence why he asked for council to delay its vote.
The next Grove City meeting to discuss the JEDD will be July 15.