There was a decent discussion on this subject. I recommend watching the video on the City's Website. The discussion starts at 58 minutes and 48 seconds. I thought I would produce a table below based on the numbers provided to show how much would be collected if the developer were to sell 30 houses per year and the city netted $53,000 per house (we don't provide any supplement) versus how much the city would collect if the developer were to sell $110 houses per year and city netted $16,000 per house. However, this is much more complicated than a simple multiplication. The discussion on the information used to get the numbers in the paragraph above starts at 1 hour into 15 minutes and 20 seconds into the video. Other numbers to be aware of that make the calculation more complicated include: There are approximately 471 houses built there already. There are already 600 lots created and (mostly) sold. The total development will be about 1200 houses. The TIFF district lasts for about 21 more years. The reason you don't see the table or the numbers I'm looking at right now is because in future years we won't collect $53,000 per house because the collections will only be for the rest of the TIFF period. For un-supplemented lots this would be $53,000 / 21 years = $2,523 in collections per year. For supplemented lots this would be $16,000 / 21 years = $761 in collections per year.
Actually writing out that paragraph helped and I put together the table. Since it is 4 in the morning please check my work. But this is what I'm calculating: Not supplementing the houses but only producing 30 houses a year nets the city $17.4 million dollars. Supplementing the houses but being able to produce 110 houses nets the city $8.5 million dollars. If the number of house drops from 110 per year to just 15 per year the city will still net about the same amount - $8.7 million.
|Year||# Houses Built total||TIFF $ net to city no supplement||Year||# Houses Built||TIFF $ net to city with supplement|
|Total Net to City||$17,408,700.00||Total Net||$8,561,250.00|
Here are the numbers if the not providing the supplement reduces the number of houses built from about 110 to 15 per year.
|Year||# Houses Built||TIFF $ net to city no supplement house|
|Total net to city||$8,742,195.00|
Tonight council will waste another $579,000 when they vote to give an unneeded incentive to build more houses in Carriage Trails. If you've been paying attention, City developments in subdivisions like "The Oaks", "Callamere Farms" and Lexington Place located South of I-70 have built over 700 houses in the past few years with no financial supplement from the City(1). Since 2009 the City has given $10.8 million dollars to the developer of Carriage Trails to supplement the building 574 lots. The proof is in the numbers. Builders want to build in Huber Heights and people want to buy houses here. There is no need for these supplements. But there is need for that money for other City Projects and City Council, City staff and the developer have refused to provide any justification for using taxpayer money to pay for normal costs all other developers in the city pay.
If you recall the last time council handed money over to this developer, the developer promised the residents of Huber Heights a background report detailing the relationship between the developer and the City to help provide justification for a continued supplement. The developer reneged on that promise. Additionally, I've asked continually since being elected that staff provide a report that shows that the City will collect enough in taxes from this development in order to provide City Services such as Police and Fire and snow removal. This is important because right now the City has already taken out $11 million dollars in loans to give to this developer and intends to pay off these loans by using the property tax that would normally be used for items like police and fire and snow removal. That leaves just the collection of income tax to pay for these items.
Looking at a house that appraises for $158,000 we see that $265 would be collected in property tax and given to the city for police, fire and roads. If the family that lives in that house has a $100,000 a year income then they would pay $2,250 in income tax. When we look at next year's city budget we see the combined collection of property tax and income tax still will result in deficit spending. When we are already in deficit spending how can we afford to take away more than 10% of a family's taxes that should be going to pay for City Services and give it to a developer? And this isn't the same question if the family works in Dayton or another city that has an income tax because that family won't be paying $2,250 in income tax to Huber Heights they will be paying it to the city they work in. Or if the people that live in the house are retired and don't earn an income they won't be paying income tax either!
We know that almost all the property tax that normally would go to services will be going to pay off the debt and its possible that we may not be collecting any income tax from some of the families. What I've been asking staff to do for two years is to show that those families that are paying income tax are paying enough to cover the costs of services like police, fire and snow removal. If they are not why would we want to trade green space for development? Why would we want to trade prime real estate that should be bringing tax positive revenue to the City for one that is causing additional financial burden? True to form though Council has been negligent in making staff produce the numbers and instead they make their decisions on a wing and a prayer.
So how else could the City use this money? First off we have over $20 million dollars of debt associated with the Music Center and another $10 million associated with the Aquatic Center. If you recall the discussion from an Administration Committee meeting last October in order to pay off that debt we needed Good Sports to build their $20 million dollar project and we needed someone else to bring in another $20 million dollar project. A year later we don't have Good Sports so we really need $40 million dollars of new development to make the debt payments on our entertainment venues. It would be smart to not give away this money unnecessarily. Suppose we do end up getting that $40 million dollars in new development. We could pay off the debt earlier. But if we chose not to do that instead of adding to this developers profits I'd rather put in a skate park and build functioning restrooms in our parks.
Bottom line, the developer will sell houses in Carriage Trails without the City giving them money and the City can use that money to help pay off debt or improve our parks so lets see if Council Members Vargo, Kaleps, Dale and Lyons can bring themselves to vote responsibly tomorrow.
Video from the Feb 9, 2015 General Session. See the full video from the City's website.
The City's website has a file that breaks out housing numbers since 2008 it can be found here. This document shows 437 Carriage Trails homes and 150 homes in other developments.
I believe I heard a council member make a similar statement as the one in the video during a different meeting but I didn't mark it and I'm not prepared to watch everyone just to see how it was stated. My memory of hearing the statement was that it was made to give the impression that the majority of the 700 houses were in recent history. If you explore other videos and find that reference please pass it my way.