Commercial property values have gone up significantly in the Colemans Crossing area of Marysville, following an appeal filed by the city and its financial advisers.

Commercial property values have gone up significantly in the Colemans Crossing area of Marysville, following an appeal filed by the city and its financial advisers.

Following an appeal to the county auditor's board of revisions earlier this year, the overall commercial property value of the Colemans Crossing area has risen from about $29-million to $43.5-million.

City administrator Jillian Froment said a discrepancy in property values in that area was suspected about a year and a half ago when the city and school district became concerned that the district's TIF (tax increment financing) wasn't going to generate enough income to pay on the initial loan for infrastructure improvements to the area.

"For some general background, the Colemans Crossing TIF started with an agreement with a developer (Cincinnati-based Mike Dever) that came in and developed this area, and involved a $7-million investment in infrastructure, such as the roads, the original retention pond, and in turn we would place a TIF on the property and any increases in property taxes would flow into this TIF fund," Froment said. "Then the City Gate area was developed, and the TIF was expanded."

Froment said that the city took out loans for the infrastructure (a total of $12-million), with the developer holding the letter of credit. The city pays on the Colemans Crossing portion of the loan from the area's TIF fund, and is currently in the sixth year of the 30-year TIF.

"Everything was going pretty well, and then the economy slumped, bringing development to a standstill," Froment said. "We had been supporting enough from this area to support the interest, but hadn't paid any on the capital. We thought that would be okay, because we knew eventually this area would build out."

Froment said that about two years ago, Fifth Third Bank (which holds the letter of credit) "started getting nervous," as the payments for the loan were only addressing interest.

"They started seeing this as a greater and greater risk, so the letter of credit fees went up each year," she said.

When the interest on that letter of credit went from 1.25 to 3.5 percent, the city became concerned. "We didn't think we were going to generate even enough income to pay the interest," Froment said.

After discussing matters with developers and the school district, however, Froment said they began to see a discrepancy in area property values.

"We realized that this land over here (in the City Gate area) was valued at about $240,000 per acre, while over here (in the adjacent Colemans Crossing area), we were seeing values at about $10,000 to $25,000 per acre. Those values hadn't been re-evaluated."

Froment said the city filed an appeal through the county auditor's board of revisions in the spring, and had an appraisal of property in that area, not including residential properties.

"The value on the books was just over $29-million, and after going through the appeal process, that final value has gone up to $43-million," she said. "We've gone up almost $15-million, which we believe will set us on the right direction for paying down our principal and for dealing with the letter of credit."