SHEFFIELD — A tax exemption approved by Village Council members at their Monday meeting increases taxes the village will receive if 150 lots off Colorado Avenue are developed.
Council members Jean Ackerman, Matthew Bliss, Robert Markovich and Carolyn White voted yes. Councilman Walter Min was absent.
The ordinance involves Tax Increment Financing in which property value is enhanced through infrastructure improvements paid with future taxes. If the property is developed and its value increases, the village will receive 38 percent of taxes from it compared with between 9 percent and 11 percent now.
The extra money, which would have gone to Lorain County or the state of Ohio, can be used for development-related infrastructure projects like road or sewer improvements. Sheffield-Sheffield Lake Schools will continue to receive the same amount of money if development occurs through a Payment in Lieu of Taxes program.
TIF districts were originally established to redevelop blighted areas. Critics of them say they are overused and enrich developers at the expense of taxpayers who have to pay for infrastructure rather than developers. California eliminated them in 2011.
However, Mayor John Hunter said the financing will increase the likelihood of development and improve residents’ quality of life.
“We are preparing ourselves for the future,” Hunter told Council members. “We’re a very proactive Council, and this is why we’re taking this action.”
Hunter said after the meeting that before he took office in 2008, TIF went through developers for infrastructure projects costing taxpayers money. Hunter said financing is now structured so that project borrowing costs will be paid with the increased property taxes from developers. Better infrastructure will attract development increasing property values.
“The more revenue that comes in that we normally wouldn’t get, the more work we can do,” he said. “It’s very complicated, but what it’s doing is helping the village develop without the village having to pay for it out of general funds and it’s not taking money away from the schools.”
County Commissioner Ted Kalo, who wasn’t at the meeting, said he supports the financing, which he said is used around the county. While county taxes won’t increase if the property value ascends, Kalo said development will increase employment and infrastructure and schools won’t lose money. “It improves an area,” he said.
In other business
Council members approved purchasing a $193,800 ambulance for the Fire Department expected to be delivered in December. The ambulance is one of five new vehicles and equipment being purchased for the department with a 1.75-mill, five-year levy approved in November. The levy, which raises $1.47 million annually, costs the owner of a $100,000 home an additional $53 a year.
Contact Evan Goodenow at 329-7129 or email@example.com.