WILMINGTON — What could be a beneficial move for a housing development has school officials uncertain.
During Thursday’s Wilmington City Council meeting, a first reading was conducted on an ordinance for a 15-year Community Reinvestment Area (CRA) with 100% exemption. This would be an extension of the current five-year CRA, also with a 100% exemption.
The reading was approved in a 4-2 vote, with Councilmembers Kristi Fickert and Bill Liermann voting against. Councilmember Kelsey Swindler could not attend the meeting.
According to the Ohio Department of Development’s website (development.ohio.gov), a CRA is an “economic development tool administered by municipal and county government that provides real property tax exemptions for property owners who renovate existing or construct new buildings.”
Dan Evers, Executive Director of the Clinton County Port Authority, told council this legislation was proposed after a “specific developer” had been in contact with the Port Authority, wanting to build residential housing within the city limits. Evers indicated that the houses built there could draw more earnings for the school than what the area currently draws in for them.
As of now, the undisclosed areas analyzed currently generate approximately $564 in revenue for the Wilmington City School District. This is due to the area being under the Current Agriculture Use Value (CAUV) program. This allows farmland devoted to commercial agriculture exclusively to be valued on their value in agriculture.
Currently, the area draws in $564 for the schools as CAUV.
“We used the city’s median income to determine the projected revenue, rather than the income necessary to own a home,” said Evers.
The model used assumed the development would lead to 220 new homes with an average sale price of $220,000 of which $40,000 will be attributed to the land value.
“A Community Reinvestment Area abates, for a defined period of time, real estate taxes on the value of an improvement — in this case, a new house,” Evers told the News Journal. “It does not abate income tax; there is no provision in the law for that. As such, the school district would collect its full 1.0% income tax on all residents who would occupy homes subject to a CRA abatement. The only revenue that would be foregone during the abatement period is that portion of the real estate taxes levied on the improvements (a house) during the abatement period.”
He advised the developer is eager to build new homes in Wilmington, and such a development would help with the city’s “housing stock” and keep people in the area as well as bringing new people in. And it could encourage other developers to want to build in Wilmington.
Wilmington City Schools Superintendent Mindy McCarty-Stewart objected to the legislation despite “being torn” about it.
“We know there’s a housing crisis here. I could probably retain employees here and teachers by having some type of housing like this,” said McCarty-Stewart. But she said she couldn’t get behind this CRA because it would have negative effect on the school’s income tax earnings.
“So you can see that Wilmington is a good place to live because you’re very low on taxes,” said Curt Bone, WCS Director of Business Operations, at the meeting. “We’re just concerned these houses will bring in new students, and you’re taking away our ability to raise the income to support them. And that puts us at a disadvantage on how to support those kids without going to the taxpayers.”
Purkey said he appreciated the discussions at the meeting and he hopes to continue discussions on the subject.
A second reading is scheduled for the next city council meeting on October 1.
Reach John Hamilton at 937-382-2574