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NILES -- City Council on Wednesday heard the first reading of an ordinance creating a residential tax increment financing incentive district for land on which the city expects about 30 single-family homes to be constructed.
If the agreement is adopted, the infrastructure for the land will be developed by JRD Holdings Partnership, which will be reimbursed through the TIF fund.
According to the agreement, 75 percent of the additional taxes from improvements to the land in the district will be put as service payments into the fund, which council approved Wednesday, and will be put toward reimbursing JRD Holdings for the infrastructure.
"As it develops, the assessed value is going to create more tax dollars," Niles Law Director Phil Zuzolo said. "A TIF under the Ohio Revised Code allows a municipality to put 75 percent of that new value, the original (tax dollars) goes and gets distributed like it normally would, (but) that 75 percent will go in a TIF fund and can be used to fund the infrastructure in order to develop the property."
Zuzolo said the other 25 percent of the additional tax dollars goes to Niles City School District.
The project will be completed in two phases with 12 units being developed in phase one and 18 in the second phase.
"It goes for 10 years, then after the 10-year mark, now theoretically, there's brand new properties, new utility customers, new tax revenue, and from a developer's standpoint they can get reimbursed for investing the money in the infrastructure." Zuzolo said. "From the city's standpoint, a lot of times it's the cities that will put the infrastructure in, where as here, you use it this way, now the developer does it, we pay them back with the taxes that the individual was going to pay anyway."
According to the agreement, the fund will act as a deposit fund to be held by the city to receive service payments from the owners, to the Trumbull County Treasurer's Office, and payable to the city. Upon distribution of the payments to the city, they will be deposited into the fund.
The agreement states the fund will be used to reimburse the company up to $336,110 for phase one and any additional improvements for phase two, as per a future agreement.
According to the agreement, public infrastructure improvements are roads, streetscape or landscape, water and sewer, stormwater remediation, real estate and professional services.
Council approved the first reading unanimously. It needs two more readings to become effective.
GOLF CARTS ON HOLD
In other business, legislation that would have permitted golf carts to be driven on certain city streets where the speed limit is below 35 mph was withdrawn and will be referred back to the safety committee for further consideration.
Third Ward Councilwoman Linda Marchese, who chairs the safety committee, said the committee wanted to hold off on the ordinance to provide the public with more opportunities for feedback.
"There's a lot of questions of people who couldn't make the meeting so I wanted to reschedule down the road," she said. "I want to start it fresh next year."