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EVALUTING TIF PROJECTS

EVALUTING TIF PROJECTS . Sean Fraunfelter, CPA sean@fraunfelter-cpa.com 513-265-3045. Grove City $17M* Liberty Interchange $41M* Austin Center $40-60M# Dayton Mall Project $6M* City of Englewood 3 for Butler Township Huber Heights $3M* City of Springboro . City of Trenton

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EVALUTING TIF PROJECTS

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  1. EVALUTING TIF PROJECTS Sean Fraunfelter, CPA sean@fraunfelter-cpa.com 513-265-3045

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

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

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

  5. Always check their land values!

  6. Evaluting the projected buildings • Is major industrial development located around the site? Putting a retail strip center wouldn’t work • 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

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

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

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

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

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

  12. www.fraunfelter-cpa.com 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

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