Annexation would give Jersey Township share of TIF money
New Albany City Council on Nov. 27 approved a resolution allowing City Manager Joseph Stefanov to enter into an annexation agreement with Jersey Township for 43 acres.
The 43 acres are owned by MBJ Holdings but the annexation was requested by the New Albany Co., the area's largest developer. The land is in Licking County, north of state Route 161 and southeast of the extension of Smith's Mill Road east of Beech Road.
The Jersey Township trustees were expected to review the annexation agreement Dec. 3. Visit ThisWeekNEWS.com for updates.
If the annexation request clears the trustees, it must be approved by the Licking County commissioners. If the commissioners sign off, they have 60 days to return the legislation to New Albany City Council for approval.
Stefanov said the annexation agreement is similar to recent others, except that it stipulates New Albany will share 50 percent of the incremental increases on the land's property-tax revenue for 15 years.
The incremental revenue will be tied to a tax-increment financing district on the land. A TIF is an economic-development mechanism available to local governments to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation, according to the Ohio Department of Development. A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation was approved, thus diverting the incremental revenue to the designated uses.
Stefanov said Jersey Township requested a percentage of the TIF revenue for potentially increasing costs for road maintenance and fire service.
New Albany would be responsible for some road maintenance in the annexed land and Jersey Township would be responsible for the rest. Jersey Township contracts with the Monroe Township Fire Department to provide emergency services to the area.
"We're already picking up some traffic and seeing some deterioration of the roads," said Jersey Township Trustee Derek Myers. "We're trying to leverage the cost to the township as much as possible."
Myers said Jersey Township has applied for state funding to repair Beech Road north of New Albany's Personal Care and Beauty Campus, which is generating traffic that heads north into the township.
New Albany already has other revenue-sharing agreements in place for the 43 acres.
If any new businesses build on the land, the city would collect income taxes from the employees.
The income-tax revenue would be divided, with $0.30 of every dollar going to the New Albany Community Authority to pay off debt incurred to develop the local business parks. The other $0.70 would be split equally between the city and the school district with jurisdiction over the area.
New Albany Mayor Nancy Ferguson asked how much revenue the TIF could generate.
Stefanov said the revenue would be minimal.
He said land annexed into the city comes zoned as agricultural. Even if the land were changed to a commercial zoning, the value of the property would not increase much until it was developed.
Stefanov said incentives are used to encourage companies to build in the city. Tax abatements, for example, allow companies to defer the payment of a portion of property taxes for the term of the abatement.
Stefanov said if an abatement were offered to a prospective business and Jersey Township received less property-tax revenue because of it, the TIF revenue would help the township until the property-tax abatements expired.