No Losers Under a JEDD, Officials Say
LIBERTY TOWNSHIP, Ohio -- Forget the past and the acrimony that once pitted community against community. Sit down, talk, resolve those differences, and work collectively to build the economic base of your region.
That's the message officials from the city of Tallmadge delivered at a forum Tuesday as they presented a case study of how their city and neighboring Brimfield Township overcame years of bitterness and discord to develop a solution that benefited all involved.
"This is a great example of two communities that hated each other," said Tom Pascarella, city administrator of Tallmadge. "Then, we started to talk to one another and found out we had more in common, and we built off that commonality."
The answer was the creation of a joint economic development district, or JEDD, a development tool communities use today to encourage economic growth without annexation.
Pascarella and Tallmadge's community development director, Pat Sauner, provided a synopsis of how the two communities forged their agreement and its results as part of a forum hosted by the Youngstown/Warren Regional Chamber. The forum, "Joint Economic Development Districts 101: How JEDDS Can Pay Off For Your Community and Spur Economic Growth," was held at the Liberty Township Administration building.
Annexation was the hot-button issue more than 20 years ago when Tallmadge took about 250 acres from the township, igniting distrust and anger in Brimfield, Pascarella said.
Under Ohio law, a municipality has the right to annex contiguous land at the property owner’s request to serve that area in question with water or sewer. However, the case languished in the courts and the state Supreme Court eventually decided in favor of the city.
Then, in 2003, the city filed for annexation of another 300 acres in the township because of a proposed development there. By this time, however, many of the players in municipal and township government had changed, and the door was open for dialogue instead of years of legal wrangling over an annexation proposal.
"In annexation, there's a winner and a loser," he noted. "In a JEDD, there are only winners."
That year, the two communities successfully put their differences aside and managed to formulate a plan that would secure new commercial development and produce revenue for both political subdivisions, Pascarella said.
Under the Brimfield/Tallmadge JEDD, a graduated income tax was imposed on the new development that began at 0.25% and would increase to 2% over 20 years, Pascarella explained. "We're now collecting 1%" from the JEDD, he reported, which today includes a large commercial plaza, industrial concerns and many other existing businesses.
Both communities share in this revenue: Tallmadge receives 50% of the income tax generated from the JEDD, Brimfield Township receives 40%, while another 10% is set aside for improvement projects within the designated JEDD.
That 10% is essentially Brimfield's to use because since the size and scope of the JEDD encompasses about two-thirds of the entire township, just south of Interstate 76, Pascarella said.
Tallmadge agreed to provide water and sewer services and economic development incentives to businesses within the JEDD. Brimfield would provide services such as police and fire protection, planning, emergency-medical, and street maintenance.
This year, the JEDD generated revenues of $904,000, said Sauner, Tallmadge community development dirBrimKLMK was collected by Tallmadge, $362,000 collected by Brimfield Township, and $90,000 was earmarked for internal improvements.
Next year, revenues should be higher, since Rubbermaid has since moved into an 850,000-square-foot building, along with 89 employees.
Much of the new development in the JEDD is just east of the city at Cascades Plaza. A new Walmart, Lowe's, Kohls, Applebee's, and Marshall's department store have constructed shops there, Sauner said.
Yet the real benefit from the Brimfield/Tallmadge JEDD is that the development has elicited strong job creation. To date, 700 jobs have been added to the 102 businesses in the designation. These businesses range from large companies – Carter Industries employs 300 – to small enterprises with fewer than 10 employees, he added.
Sauner said it was also important to have these companies on board with the idea of a JEDD, and in some cases led to tweaking the original plan to accommodate them. Initially, for example, the city proposed an immediate 2% income tax, but larger companies such as Carter Industries balked, arguing that its employees were accustomed to paying no income tax and would be too much for them to absorb at once.
This led to altering the plan and adding the incremental tax, Sauner noted. "It seemed like a reasonable compromise and it's worked out well for everyone," he said. "People were a lot more receptive about signing up because we went out and talked to them about it and explained it. It wasn't as difficult as I thought it would be."
The prospect of landing a large industrial development led to similar discussions between the city of Warren and Vienna Township, noted Warren Safety Services Director Enzo Cantalamessa.
Last year, chamber officials informed the city that a manufacturer of flat-screen TVs, whose president has ties to Warren, was interested in locating its operations there. Unfortunately, no suitable buildings existed.
"The timeline was critical," Cantalamessa said. "We needed a partner."
The city turned to Vienna Township, which had a building and location that would have been perfect for the project. For the first time, the idea of a JEDD was broached between the city and the township.
"Just the willingness to enter a JEDD was important," he recalled.
In the end, however, the company opted to move the project to South Carolina, Cantalamessa said. "But the process of going through the parameters was valuable."
Vienna Township Trustee Phil Pegg noted that once representatives of the two communities began talking, "we got over our issues in an hour. We've laid the groundwork for a future JEDD."
Other communities in the Mahoning Valley are also contemplating future JEDDs. Newton Falls is working on a project with Braceville Township, while the city of Youngstown wants to develop a JEDD with Austintown Township.
A plan advocated several years ago by then Youngstown Mayor Jay Williams to create large JEDDS along commercial corridors in Boardman and Austintown went nowhere.
And, the latest proposal, related to the development and operation of Penn National Gaming Inc.'s new racino under construction in Austintown, has also been met with opposition.
"Conflict got us nowhere," Tallmadge's Pascarella said. "Once we trusted one another, really positive things began to happen."
Copyright 2013 The Business Journal, Youngstown, Ohio.
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