The Marysville Board of Education gave a unanimous green light to two economic development incentive packages for local businesses at its meeting Thursday, May 15.
The votes clear the way for deals related to the new Meijer store and Heritage Cooperative Inc. Board member Ed Pleasant was absent.
The proposals received first readings April 17.
The first resolution authorized an amendment to the City Gate tax-increment financing district, which was the subject of a prior agreement between the district and city. The board approved amending the TIF to add the Meijer property on Coleman's Crossing Boulevard.
Board President Sue Devine said the typical tax recipients, including the district, will lose money in the short term as a result of the TIF.
"If you look at it from the macro perspective, our community receives the property taxes, income taxes and sales taxes generated from this development, and pretty much each entity is giving up something to help pay for the infrastructure that promoted the growth and development," Devine wrote in an email Friday, May 16.
She added the short-term loss is worth the long-term gain of development.
"We're in it for the community, not just the school district," Devine said in a Friday phone interview.
Ten years ago, the city and developers of Coleman's Crossing created the TIF district to help fund the infrastructure needed to support a proposed Wal-Mart Supercenter, Home Depot, Honda Marysville dealership and a shopping center. Coleman's Crossing was started by Mike Dever, the majority owner of Honda Marysville.
At the time, the city estimated about $8 million would be needed to cover infrastructure costs. The city and Marysville schools worked together to approve a 30-year TIF to cover those costs.
However, the district map excluded the current Meijer property, which was then owned by New Beginnings Church, because churches are exempt from paying property taxes.
Last year, the church split the property, selling some for the construction of Meijer and keeping the remainder for a new church building.
Connolly Construction, the owner of the area known as City Gate, proposed a new development with a number of additional businesses in 2007 and 2008. This required another $4 million in infrastructure, which was added to the TIF.
However, the 2008 recession slowed growth in both developments, so the TIF has had difficulty at times covering the debt service and the compensation to Marysville schools.
The Meijer development has an estimated value of $10 million and could generate more than $5 million over the remaining 20 years of the TIF -- $2.4 million for the district and $2.6 million for city infrastructure. The store is expected to open in August.
Officials have said adding the Meijer property to the TIF would allow the debt service to be paid, provide for a payment to the district and possibly leave money for the city to make improvements on Coleman's Crossing Boulevard.
The school district is the only entity getting money from the TIF.
"When you have that commercial development, it's bringing in additional dollars for our school and our city but it's not bringing in more students," Devine told the board. "I think it's important to look at the partnerships."
The second resolution the board approved was to participate in an Economic Development Incentive Policy (EDIP) to help Heritage Cooperative Inc. build in Marysville.
HCI broke ground May 14 for an agriculture campus and research farm on 276 acres at 15090 Scottslawn Road.
West Mansfield-based HCI plans to create 20 new full-time and 15 new part-time jobs with an estimated annual payroll of $1.125 million, and invest approximately $38.5 million in real property improvements, making it one of its largest projects in company history. It also plans to invest $5.2 million in a rail spur and additional site improvements.
All eight taxing authorities within the EDIP area must approve the incentive plan. They are: Union County, the city of Marysville, the villages of Plain City and Richwood, and Fairbanks Local, Jonathan Alder Local, Marysville and North Union Local school districts.
The EDIP was approved in 2004-2005 based on the recommendation of the Union County Economic Development Action Plan. The policy uses various incentives to attract businesses, including enterprise zones, community reinvestment areas and TIFs.
When enterprise zones or community reinvestment areas are used and the annual payroll for the new business is more than $1 million, the city and school district must come to a revenue-sharing agreement. Marysville City Council approved a 75 percent, 10-year tax abatement for HCI at its March 13 meeting.
After HCI's property tax abatement, the school district is projected to receive $682,000 over the 10-year term, while the city is expected to receive $249,000.
Devine said that, again, the deal may cause short-term losses for the district but would be more lucrative in the long run for the whole community.
"Since Heritage is more of a property investment, the school will lose an estimated $9,500 per year. Again, the revenue we'll receive compared to the undeveloped property is much, much more than the amount we're giving up from this agreement," Devine said.
School board member Dick Smith praised the cooperative effort between the district and the city.
"There's clearly tremendous benefit from this collaboration," he said.
Marysville city Administrator Terry Emery told the board the city and school district will need to continue to work together as the city grows.
"We're seeing things now in development all over. We're as busy as we've been in a long time, and I don't see anything slowing down," Emery said.