“When CEDA was enacted 23 years ago, it was a useful economic development tool for cooperation and collaboration among government agencies in Ohio,” he said. “Now, in 2022, it may have served its purpose and is no longer needed. The community is experiencing unprecedented economic growth, and the City of Springfield does not want to overburden the townships with services that we are willing and able to provide.
Under CEDA, the township receives 12.5% of the city’s 2% income tax revenue generated from commercial industrial development on land annexed to Springfield. In return, Springfield Twp. is responsible for services such as street maintenance, and the city provides economic development, engineering, planning, and public safety services. The deal allows the annexation to benefit both the township and the city, officials said.
To date, the township has received over $4.8 million from the city in income tax revenue from commercial industrial development in CEDA territory.
The agreement has been in place for 23 years and is due to expire in 2050. It was signed by Springfield Twp. administrators, Springfield City Commissioners and Clark County Commissioners.
CEDA was created at a time when annexations were shrinking the state’s townships. The deal therefore provided an alternative, Springfield City Manager Bryan Heck said. In 1999, the CEDA which focused on the territory of Springfield Twp. was the first of its kind to be state-approved, he said.
In recent years, the city has approved the 226-unit Bridgewater development and entered into a Supplemental Tax Financing (TIF) agreement with the developer. The TIF, which aims to attract and subsidize new investment, means that the municipality will not receive a property tax increase on new housing for 30 years.
A similar deal is being considered for the proposed Sycamore Ridge development which aims to build 258 homes.
It is unclear at this time whether the municipal commissioners will also put in place a TIF agreement with the developers of a 1,258 housing project along the National Road East. The commissioners recently agreed to annex 248 acres of township land for this project.
The owners of the new developments will be residents of the City of Springfield and the Township of Springfield. They will have the right to vote for municipal commissioners and township administrators, and certain voting matters. However, the homes will not be located within the City of Springfield School District.
The three new developments represent the largest influx of new housing to the area in decades.
Foley is among the locals who oppose the TIF. The loss of property tax revenue for some of the proposed homes, in addition to the township’s responsibility for road maintenance for new residential developments, would create a financial burden, Foley and residents say.
They fear that the hundreds of new residents will overload the township’s schools and roads and further strain other resources.
Heck disagrees. Springfield’s annual payments to the township under CEDA are more than enough to cover the township’s liabilities to commercial, industrial and residential properties, he said.
The CEDA provides the ability for a property to enter Springfield and use city utilities, which can be attractive for private development. However, the township continues to collect road and gasoline tax distributions since it is responsible for maintaining those roads, the city said.
Separate service payments to the township also include portions of the city’s income tax revenues generated by commercial industrial growth in CEDA territory. But under the current agreement, the township would not receive a portion of the city’s income tax that would be collected from people living in homes that will be built on the annexed territory, Foley said.
It would be fair to renegotiate CEDA to address this concern, he said.
But Springfield officials insist the money the township is getting under the current CEDA deal is enough. They say payments have increased in recent years with new businesses and jobs in the area, and more being added that will mean additional tax revenue for Springfield Twp.
For example, the township receives tax revenue from high-tech manufacturing company Silfex, which arrived in the area in 2018 and employs more than 500 people. Additionally, the Township of Springfield. will obtain tax revenue from the Prime Ohio II Industrial Park which will house an 870,000 square foot distribution center, which will create 833 full-time equivalent jobs.
In 2021, the city made a service payment of $469,912 to Springfield Twp. under the CEDA agreement. The payment included money from a separate deal tied to Prime Ohio, as the township receives 5% of the income tax generated. Approximately $287,000 came from commercial industrial properties under CEDA and $181,313 came from the separate industrial park agreement.
Foley said the money raised last year represents a significant increase in the township’s general fund and with the growth of these business ventures, that amount is expected to continue to increase each year.
But the CEDA agreement could be terminated at any time based on the mutual consent of the township and the city, Heck said.
There have been no formal discussions between the entities regarding the modification or termination of the agreement. However, Heck and Foley said they hope the parties will meet in the near future to have a discussion.
Annexation and the rules around it in the state have changed since the implementation of CEDA in 1999. At that time, if a property was annexed from a township to a city, it would be detached from that township . The state has since updated its annexation regulations to reverse this trend.
“The rules for annexation have changed in favor of the townships since we implemented CEDA,” Heck said. “But we were kind of at the forefront. We were ahead of the state in having this agreement where we would collaborate and partner together in annexation so that the township would not continue to shrink.
Still, Foley thinks the CEDA could be changed without being terminated. However, Springfield Twp., administrators did not elaborate on what those adjustments would look like.
Trustees recently voted to seek outside legal counsel to assist with matters related to CEDA, TIF and similar agreements focused on economic development.
“Trustees were elected to protect the township, and that’s why we’re hiring expert legal counsel,” Foley said. “(We) look forward to meeting with city and county officials to discuss improving the agreement, particularly as it relates to residential development.”