EVALUTING TIF PROJECTS Sean Fraunfelter, CPA

BACKGROUND WORK ON TIFs b Grove City $17M* b Liberty Interchange $41M* b Austin Center $40-60M# b Dayton Mall Project $6M* b City of Englewood b 3 for Butler Township b Huber Heights $3M* b City of Springboro b City of Trenton b West Carrolton b SR747/Princeton Road b Village of Mt. Orab b Various CRA Analysis b School District impacts * bond deal # expected bond amount

The City Manager loves the project and throws the Developer’s number on your desk b Developer says 97 acres will develop in four years and bring in over $1,300,000 in taxes b They need us to pay for $3M in infrastructure b The numbers look good to me - how about you?

LOCATION LOCATION LOCATION b Is the project near an interstate? b What else is developed around the acreage? b How many people either live around the area or would travel to the area?

Always check their land values!

Evaluting the projected buildings b Is major industrial development located around the site? Putting a retail strip center wouldn’t work b Have a large retail development with a big box store, some restaurants and other retail located very close? A large hotel site would work well

Get real b Construction values don’t equal tax values b Developers have gone back to get their taxes reduced b Look for similar properties in your community b Check surrounding communities and counties for similar settings to yours b Print off the County Auditor valuation for acreage and values

Can we support this? b What is our current level of service with the related roadways and what do we need to do? b If our community has three restaurants now they want to build five more but we only have 10,000 residents.

Okay will it happen in three years? b Always, always, always check the developer’s build out schedule b Remember completion year is not collection year (usually two years out) b You probably need to modify the years used by a developer

Other key considerations b Check their tax rates used b In a TIF already - what is the school reimbursement for the project? b New TIF - limited time for revenue collection, ten versus thirty years, trigger mechanism for each property b Be conservative in the interest rate to get a present value of the revenue collections b What infrastructure do they want you to support? Streets, sidewalks, water/sewer, parking garages, etc… GET A LETTER OF CREDIT

Joint Economic Development Districts b Helps with City revenues by reaching outside of boundaries b Townships can generate revenues in new area and protect themselves against annexation b Someone needs to manage it - pay another locality? Service? Or agreement partner

PDF files of the handouts are available including examples of comparative properties I have used, a copy of the Grove City bond TIF report and this presentation THANK YOU