North Royalton will be receiving additional tax revenue from a new senior housing development. City Council recently approved legislation that would allow the city to receive tax money that would normally go to Cuyahoga County.
At their November 20 meeting, City Council unanimously adopted an ordinance that establishes Tax Increment Financing (TIF) for Royalton Place, the senior development on York Road, near Route 82. The TIF program is established through the Ohio Revised Code. According to the Ohio Development Services Agency, a TIF “is an economic development mechanism available to local governments in Ohio to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation. TIFs are implemented at the local level and may be created by a township, municipality or county. Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed towards a separate fund to finance the construction of public infrastructure defined within the TIF legislation.”
Basically, the program allows the city to reinvest in infrastructure from the increased tax valuation a property experiences from the time the land is vacant, to the time when it has been developed. That increased tax valuation, which would normally go to the county, is then redirected to the city to be used for certain improvements.
In accordance with the Ohio Revised Code, the city adopted the legislation that designated the parcel to be exempted from taxation; declared that the improvements to that property serves a public purpose; delineated the public infrastructure improvements which directly benefit the parcel; and specified the equivalent funds to be created for those redirected monies. The legislation also set up a specified fund for the money to be deposited.
North Royalton Finance Director, Eric Dean, said that the money will not be collected until 2020. He said that the estimated valuation of the property, with two of the four phases completed, is about $11 million. Based on that estimate, the city expects about $80,000 per year, that would have gone to the county. It will also receive about $26,000 for the city’s tax allotment. As the additional phases are developed, the valuation of the property will increase and so will the yearly tax.
Mayor Bob Stefanik said that the additional money received must be used within the constraints of the legislation, which includes the cost of other infrastructure improvement. He said that the money will likely go toward the city’s portion of the Route 82 rehabilitation from York Road to the eastern city corporation line.
By GLORIA PLEVA KACIK
Contributing Writer