Hilliard City Council members set a precedent Dec. 10 by establishing a tax-increment financing district in advance of a detailed development plan.

Hilliard City Council members set a precedent Dec. 10 by establishing a tax-increment financing district in advance of a detailed development plan.

Council members established the TIF for a proposed development at the corner of Franklin Street and Cemetery Road. The parcel has not been rezoned and no formal plan offered, but developers have proposed a mixed-use residential and office development on the site of an inoperable grain elevator and silo.

Council members approved the ordinance 5-1, with Joe Erb dissenting. James Ashenhurst was absent.

Economic Development Director David Meeks said the unprecedented measure was necessary to collect the revenue needed to fund the construction and dedication of Franklin Street.

A public portion of the road would be built to service the proposed development. The new section of Franklin Road would align with Luxair Drive at a signalized intersection. The $15 million to $18 million project also would require the relocation of the Starliner Diner.

It was paramount, Meeks said, to establish the TIF before the end of the year so the land value is based on the lower value of unimproved 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.

"We want to lock in the lower value before any improvements are made," Meeks said, allowing the city to maximize the revenue it will receive once the road is improved.

Typically, a development plan is approved in advance or at the same time as a TIF, but this case warranted an exception, Meeks said.

Erb said after the meeting he did not concur and voiced a further concern about the residential component of the proposed development.

"I support using TIFs, but not for residential developments," Erb said. "This development could put many more kids in our schools. It would not be fair to then ask them to support a school levy."

Establishing a TIF for a development with residences is not without precedent. Council members in August approved a development plan within a TIF that included apartments at the Britton Parkway and Cemetery Road.

Glenn Dugger, an attorney representing John Royer of Buckeye KRG, the proposed developer of the project at Cemetery and Franklin, has not revealed any further details about the development. He told council members last month many details must still be vetted.

A 30-year TIF has been established for the parcels. A 10-year, 75-percent TIF will apply for the first 10 years. A "non-school" TIF, which means the local schools would continue to receive revenue from any new businesses in the area, would apply for the remainder of the term.

In another matter concerning a proposed development, council members unanimously passed an ordinance amending a Planned Unit Development plan for an office complex at the tentatively named Villages at Britton Parkway, at Cemetery Road and Britton Parkway.

The amendment reduces the minimum number of required parking spaces for a two-story medical office proposed for the site, as well as reducing the number of required caliper inches of replacement trees on the site.