City Manager Bryan Heck shared that the Clark-Shawnee School District has already notified the city of opposition to the plan that will impact school revenues at the same time the district receives an influx of new students from the newly developed homes.
Superintendent Brian Kuhn told the News-Sun the main reason for the opposition is what he called the “significant” increase of students and being able to serve them.
“We need every tax dollar to which we are entitled in order to properly serve and educate students,” he said.
Melody Parks will be a mixed-use development that will include commercial retail, restaurants multi-family apartments, patio and single family residential components.
Kuhn said the new 635 single-family residential homes in the proposed development could result in an increase of about 381 students, based off preliminary numbers and calculations related to the industry norm for how many children per home, which is about 0.6 kids. Kuhn said that means “16 more classrooms, 16 more teachers, five more school buses, five more bus drivers, increased parking,” as well as additional special education staff and services, cafeteria space and more.
“The buildings (that were) designed and renovated were not built with this increased enrollment as the state doesn’t allow for projected future growth. It’s based on enrollment trend; it’s not built to accommodate future growth,” he said.
If the school district moves forward with its objection to the proposed tax break, more negotiation will be required.
Kuhn said the district requested the city consider a TIF ordinance that makes the schools “whole” and “hold them harmless,” and said the objection will stand unless the district, city and developer can reach a compensation agreement that is satisfactory to all.
The current proposed TIF tax break would apply only to the single-family residential portions of the project, which when complete, will consist of 12 phases of the building project. As each section of single-family housing is completed, they will be added to TIF qualification.
In general, a local government designates an area as a TIF and works with a developer, who improves the area. Property values increase, meaning property taxes also increase.
In many TIFs in the U.S., the original tax value continues to pay for schools and government services. The increased property tax amount goes to the TIF district instead for a period of years to pay for the infrastructure (roads, utilities, sidewalks).
Heck explained the developed land would be taxed at a rate allocated for the first 10 years. The TIF fund would receive 100% of the non-school revenue, 75% of the school revenue, with the schools receiving 25% of the increased value of the property generated by single-family homes.
After year 10, the school will be paid in full at 100% of tax revenue generated by residential houses in the project, while the non-school designated areas continue to contribute to the TIF at 100%.
“This is typical and is exactly the way Bridgewater housing development was set up,” Heck told the commission. “It’s a 30-year, 100% TIF. School districts receive 25% of the increased valuation created by the development in years 1 through 10. Without the development of the property, they will see no increase in the property tax valuation they receive.”
Heck said Clark-Shawnee will benefit even at the rate of 25% taxation because of the increased value of the property, which is currently zoned agricultural.
“Of course the development and the infrastructure will increase the value of the land significantly from its current value,” he said.
He also noted the TIF does not include the commercial developments, and the school district will receive tax benefits from those elements of the development.
“The commercial tax revenue will generate much more than the residential portion,” Heck said.
If no agreement is reached and the objection stands, Kuhn said the TIF would change from a 30-year, 100% to a 10-year, 75% for all parties because, under TIF law, the city can implement a TIF to get 75% of tax dollars for 10 years without the district’s approval.
“Because of what kind of TIF it is, we have the right to object, and we did so because we need every tax dollar we are entitled to in order to educate and serve the students of Springfield Twp.,” he said.
City commissioner Kevin O’Neill pointed out that school funding for the district will be made “whole” with new revenue generated by the portions of the development that fall outside the single-family housing property designation.
The developer is scheduled to take a final detailed proposal to the CEDA Regional Planning Commission for review in the coming week and wants to break ground in late September or early October. The first phase of the project will include construction of commercial retail, restaurant, multi-family apartments, patio homes and approximately 94 single-family residential lots.
Additional single-family residential lots will be constructed in phases, with each new phase qualifying for the special TIF tax modification, if approved by city commissioners.
There were no community members expressing opposition at the public hearing.
As for next steps, Kuhn said they have scheduled a meeting for a discussion with those involved about the developer’s needs and the district’s needs.
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