Whole Foods isn’t official yet — it is tentatively on the agenda for next Tuesday — but Trustee Mark Welch told the Journal-News they have a memorandum of understanding. By creating the CRA the township is creating a tax abatement area to encourage development. Previously only counties and municipalities could use the tool.
“It’s a lever that we could pull that wasn’t available to us before.” Welch said. “It’s been a start and stop situation up there with developers for a long time because there are so many entities involved.”
The CRA is a tax abatement that operates like a tax increment financing district (TIF) in that the property taxes are frozen at the pre-development level for a set number of years at an agreed upon percentage.
Back in 2018 a new 48-acre mixed-use development called Village North was approved by the Liberty and West Chester trustees. It straddled Liberty Way with housing on the Liberty side and business to the south. The land is still vacant.
West Chester Economic Development Manager Katy Kanelopoulos said the developers haven’t broken ground, but she believes the CRA “is the catalyst that’s going to make it move forward.” She said construction prices and interest rates have frustrated progress on the property so the tax abatement will help.
“They’re kind of looking at however they can get a little relief to make the project viable, that’s really where we’re at, because some people when they started the design process it was one price and now it’s significantly more,” she said. “I think whoever is developing or taking that risk on to develop a property or add onto a property or a business, they just are looking for any reasonable help, any tools that exist in the community to make the project work, otherwise it doesn’t make sense to move forward. We do clearly want to continue to progress.”
The township needed to use this incentive vehicle because the 13.6-acre parcel is already within Butler County’s University Pointe TIF so they couldn’t install their own TIF. Taking this property away from the county TIF will have an impact, according to County Administrator Judi Boyko, but it is impossible at this point to gauge the lost dollar amount.
The University Pointe TIF raises $9.5 million annually to pay for infrastructure, like the newly revamped Liberty Way Interchange. It encompasses about 1,000 acres so this parcel is a pretty small piece.
“Certainly any property taxes diverted from what could be collected as payments in lieu of taxes for the TIF does impact the collection of the University Pointe TIF and future ability to construct and maintain future infrastructure,” Boyko said. “Although it is understandable if a township is utilizing tools at its disposal to advance their development interests.”
Commissioner Don Dixon said he is not concerned the township has created this CRA because the township has “paid a lot of money” into the county TIF.
“There has to be some road improvements and if that’s their plan to get the road improvements so it doesn’t have to come out of the TIF, that’s even better,” Dixon said.
Liberty Twp Trustee Steve Schramm said the Village North developers also asked them for a CRA but “we decided not to go down that path.”.
“They approached us to do the same thing but our side is uniquely residential, the predominant work we were going to see was either multi-family or single family patio type homes and we did not want to incentivize that in any way,” Schramm said. “We feel we have had no trouble attracting residential development.”
Throughout most of this year the county and state have been grappling with skyrocketing property value hikes due to mandated reevaluations. Officials have identified the overuse of tax abatements as one of the main culprits in what is considered a broken property tax system.
West Chester Trustee Ann Becker said this tool is perfect for that area because it is surrounded by non-profit entities that don’t pay taxes.
“Village North will be an exciting addition to West Chester Twp. and encouraging business development is important to us,” Becker said. “In that part of town we don’t have the available resources that we would normally have via TIF and that part of town also has a great deal of non-profits with the VOA park and the hospital complex. So using the Community Reinvestment tool is a way for us to help support development in that part of town.”