The ordinance Council passed involves Tax Increment Financing, in which property value is enhanced through infrastructure improvements paid with future taxes. Ohio law allows communities to designate “blighted areas” for infrastructure upgrades, such as road improvements or sewer line installation.
The goal is to attract more businesses to these areas without using general funds to pay for the improvements.
The property involved is a Family Dollar store to open soon at 2325 W. 21st St.
The estimated market value of the property is $450,000, according to Safety/Service Director Robert Fowler.
Projected annual tax revenue is $10,890.
Under the 10-year TIF plan, the school district, which would’ve received 74 percent of the amount, will receive 25 percent, with Lorain getting the remainder.
Board of Education members Mitch Fallis and Jim Smith previously criticized the deal, saying it takes money away from students.
Fowler told Council the special Monday meeting had to be held before the end of the year because Dollar General will open soon and Lorain would lose a year of revenue if it missed the deadline.
Fowler said he had been negotiating with the school district since September and expected to reach an agreement for a 50/50 split over 20 years, plus a TIF agreement for a property at 5350 Oberlin Ave. Council postponed voting on the Oberlin property.
“Because they took no action, it left us sort of scrambling,” Fowler said. “I though we had an agreement.”
Critics of TIF districts say they are overused and enrich developers at the expense of taxpayers who have to pay for infrastructure upgrades, rather than developers. California eliminated them in 2011.
However, Councilman Dan Given, D-at large, defended the financing. Given said Lorain can’t be “held hostage” by board members who he said have had enough time to reach an agreement.
“They just don’t want to touch this topic but we can’t just sit by idly and do nothing,” he said. “How does that benefit the residents of our community?”
Given said board members were invited to attend the meeting via an email from Council Clerk Nancy Greer. However, Smith and Board President Tim Williams, reached by phone after the meeting, said they had not been invited.