Licking County News

JEDZ lawsuits have Etna in 'holding pattern'

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The Etna Township trustees on July 1 agreed unanimously to settle lawsuits filed against the township regarding its recent joint economic-development zone proposal with Reynoldsburg.

Facing a lawsuit that claimed Etna Township and Reynoldsburg violated Ohio's open-meetings law and a change in state law concerning JEDZ agreements, Reynoldsburg City Council voted June 30 to repeal the JEDZ plan with the township.

Township Administrator Rob Platte said Etna is in a holding pattern.

He said until pending lawsuits are settled, the township cannot do anything related to the JEDZ.

He said he could not comment further on the issue.

A resolution approved July 1 by the trustees authorizes the township's attorney, Patrick Kasson, to settle the lawsuits and authorizes Platte and the township's fiscal officer, Walter Rogers, to "execute any necessary documents to carry out a settlement of the lawsuits, including a settlement agreement, which releases any of the parties to the lawsuits in exchange for a release of Etna Township."

In the resolution, the township maintains "all formal actions of this board concerning and related to the passage of this resolution were taken in an open meeting of this board, and that all deliberations of this board that resulted in formal actions were taken in meetings open to the public, in compliance with all legal requirements, including but not limited to, section 121.22 of the Ohio Revised Code, except as otherwise permitted thereby."

Trustees have scheduled a special meeting Monday, July 7, to meet in a closed executive session to talk about the JEDZ resolution.

The JEDZ agreement would have granted Etna Township the ability to levy Reynoldsburg's 1.5 percent income tax on 1,497 acres in the township and give Reynoldsburg the ability to collect the tax, generating about $400,000 annually.

The JEDZ could have affected anyone working in the designated zone and taxed the net profits of any business operating in the zone over the next 99 years.

Under the agreement, Reynoldsburg could have kept 20 percent of the money collected, with 70 percent going to the township and 10 percent to a JEDZ improvement fund.

Etna Township voters ultimately would have had to approve the JEDZ in a special election Aug. 5, but that will not be held now, Reynoldsburg City Attorney Jed Hood said.

One of the businesses operating in the zone filed a lawsuit May 27 in Franklin County Common Pleas Court.

The Ascena Retail Group claimed both Reynoldsburg City Council and Etna Township trustees met either privately or in executive session in violation of Ohio's open meetings law before they voted May 5 to approve the JEDZ contract and the special election.

The complaint also named the Licking County Board of Elections as a defendant.

Hood called the lawsuit "defensible."

"This repeal is not an indication that there was any wrongdoing," he said of Reynoldsburg City Council's action last week.

Hood said when House Bill 289 was signed into law June 5, "it changed the rules of the game" for JEDZ agreements.

The state legislation outlaws the creation of any new JEDZs after Jan. 1 and requires JEDZ agreements not yet approved by voters to be "recalled" until a joint economic-development review council could approve the contract's economic development plan.

Hood said the review council would consist of seven members, including representatives of the four largest businesses in the zone.

"I feel very strongly that since the state law has passed, it is clear that the state legislation has made it more difficult to establish JEDZs," he said. "I think the city of Reynoldsburg must repeal the contract in order to comply with that law."

Hood said the new state requirements are clear: "The General Assembly wants to limit a township's ability to create a JEDZ."

Attorney John W. Zeiger, from Zeiger, Tigges & Little, representing Ascena in the lawsuit, spoke at the May 5 public hearing in Reynoldsburg.

He warned city officials that the JEDZ contract obligated Reynoldsburg "to assume 100 percent of the legal expenses arising from any challenge of the JEDZ."

Platte said at that meeting that the taxes collected would be used for economic development in the zone, including paying the township share of the state's $12.5 million state Route 310 bridge project.

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