Local school district, township raise concerns about proposed Springfield project

Springfield’s first housing development in decades is moving forward, but its financing is causing concern for local school and township officials.

Jonathan Bills, president of Dayton-based DDC Management, provided an overview of the proposed 53-acre development for the Clark County commissioners Wednesday morning. The project is still in the planning phases, but construction on the first of four phases in the project could start early next year.

Companies like Silfex and Topre America Corp. have announced plans to add hundreds of new jobs to the area over the next several years. Without new homes available in Springfield, those workers are likely to move to neighboring counties with more options, Bills said.

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“If a project like this doesn’t move forward there will be a wall hit with new businesses coming into the area,” Bills said.

To make the project work though, the city and developers are considering a request for Tax Increment Financing to provide funding for DDC Management to build roads and other infrastructure in the residential area. Staff from the Clark-Shawnee School District and Springfield Twp. said potentially forfeiting revenue could present financial challenges.

The proposed development is within city limits, but under the annexation agreement home owners living in the new development would essentially be residents of both the city and Springfield Twp., said Bryan Heck, Springfield’s deputy city manager.

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Heck said the details of the TIF proposal are still being finalized. The most likely proposal would seek two separate TIF requests. The city can approve a proposal with 75 percent of residential property taxes for new homes in the development going to the project and the remaining 25 percent going to the district for up to 10 years. Anything longer would need approval from Clark-Shawnee’s school board.

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The township would be under a separate TIF proposal for 100-percent for 30 years. The township could be required to provide services like brush pickup without gaining any additional revenue from the new homes under that scenario, said Tim Foley, Springfield Twp. trustee.

“My issue as a township trustee is we are potentially not receiving our fair share of tax revenue to help cover the added responsibilities,” Foley said.

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Lance Oakes, a manager for DDC Management, said the TIF requests are necessary to make the project financially viable for investors. He said they’re taking a risk by building Springfield’s first new development in about 20 years. If the project is successful though, it could make more developers take a closer look at Springfield in the future.

The TIF proposal also puts the Clark-Shawnee School District in a tough position, said Tom Faulkner, the district’s treasurer. About 31 percent of the district’s financing comes from state funding, which wouldn’t increase unless the district adds about 140 new students. If students living in the new housing development move into the district, Clark-Shawnee could miss out on potential revenue because it could attract fewer students through open enrollment. He estimated about 310 students enroll in the district through open enrollment each year.

In the meantime, the district would only receive 25 percent of the new revenue from property taxes on the new homes while providing services for additional students. The district is still studying how the proposal could impact the district’s finances, said Brian Kuhn, the district’s superintendent.

“We’re just kind of waiting as they come up with their economic package,” Kuhn said.

Bills said his company has had success with similar projects in the area. The company also used TIF financing to develop its Brantwood project in Riverside. The company expected average sale prices in the $180,000 to $190,000 range, he said. Instead, there was enough demand that average prices climbed to about $225,000 in the first phase of the project and $250,000 in the second phase.

“It was very similar to what we are trying to work through with Springfield,” Bills said.

The Springfield News-Sun has provided extensive coverage of real estate and residential development issues in Clark and Champaign Counties throughout the year. For this story, the paper spoke to city staff, developers and township officials about how a proposed housing development could impact the community.

By the numbers:

231 — Number of homes being proposed

53 — Acres in the project

$190,000 — Anticipated average home price

Source: DDCM Land Development

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