Days before a meeting planned to discuss tax-increment-financing deals, Westerville City Council members argued about the topic yet again.
At their regular meeting Feb. 21, council members heard the third reading of an ordinance that would set up a TIF district for the Braun Farm area, which is set to become a mixed-use development that includes apartments and senior-living facilities.
A TIF is an economic-development mechanism available to local governments to finance public-infrastructure improvements. It locks in the taxable worth of real property at the time of the TIF's creation, diverting resulting incremental revenue to designated uses, such as funding infrastructure to support the new development, for a proscribed length of time.
The proposed 30-year TIF for the Braun Farm area would be expected to generate just under $600,000 annually, or nearly $18 million, that would be used to improve infrastructure in the area, including four nearby intersections. The city plans to make the Westerville City School District whole, as Assistant City Manager Julie Colley previously said schools and other entities would continue to get their current portion of the taxes.
As has been the case in past TIF discussions, Councilman Tim Davey is strongly against the idea. He came prepared with two studies that he said supported his claims.
"TIFs are not a great economic-development tool," he said. "They're popular because they're a way for cities to basically impose a tax increase on the public without taking the blame because it's diffused among several different entities."
Other city council members disagreed with Davey's assessment. They criticized his use of studies from more than 15 years ago and claimed data from other states are not applicable. Councilmen Mike Heyeck and Larry Jenkins said they prioritized the ability to choose more beneficial projects for areas that will be developed regardless.
"The city can stand back and not participate and get whatever you get, or we can plan ... and then we can participate and try to incentivize to get the things we want," Jenkins said. "Westerville was built because we've been involved, we've planned and we've used these tools to get the best outcomes."
Heyeck suggested that without more development -- which fuels tax revenue -- the city would need to consider income tax increases that have been pursued in other communities.
"A lot of the cities that don't have the development are going to 2.5-percent income tax," he said. "I don't want to be on this council and vote for an increase in income tax."
Chairman Craig Treneff was the TIF's most adamant defender. He said Davey's sources were "way outside the mainstream" and "apples to oranges" comparisons, and that developments such as the Braun Farm project are necessary to combat funding cuts made at the state level.
"We get to have this discussion about weekly anymore," he said. "It's a choice between whether you want a community that has an economically busy sector or not. We were a bedroom community ... and we could be a bedroom community today. We could be a bedroom community like Bexley or Upper Arlington, for example ... and they're both struggling to do the basics of city government because they don't have much of a commercial sector."
But Davey stood by his opinion, saying his fellow council members were misconstruing the issue and that each TIF or similar deal was causing a "negative impact to compound year after year."
"There's a false choice presented here where Westerville has to come in and choose what we want in a particular area in order for the right development to occur, and I don't think that's the case at all," he said.
The TIF ultimately passed by a vote of 5-2, with Davey and Councilwoman Diane Fosselman -- who said she wasn't convinced by the job-creating potential of the development -- casting the "no" votes.
Council has had a special meeting to discuss TIF deals on its agenda all year. It will hold a special work session dedicated exclusively to the topic at 8 a.m. Saturday, March 4.