Toledo officials hope increased investment in the city’s downtown could help pay for infrastructure improvements in the Central Business, UpTown, and the Warehouse districts.
Toledo City Council is considering establishing a new Tax Increment Financing (TIF) area that would take the taxes generated from increased property values and use it specifically for public improvements within the designated TIF area.
“All you need to do is walk around downtown and see the need for public improvements,” Councilman Rob Ludeman said.
The way a TIF works is based on a property’s increased value.
If a property grows in value because a building is redeveloped, or a new building is constructed on a lot, or the Lucas County Auditor’s office deems the value has increased, the corresponding property taxes are likely to grow.
A TIF then takes the difference in property taxes between the old value and new value and places that money in a specific city fund that can only be used for public improvements.
Toledo typically has implemented the financing model when there is a large development project, such as the Overland Industrial Park or Cleveland-Cliffs iron ore plant, said Brandon Sehlhorst, the city’s commissioner of economic and business development.
“This is really the first time that we’re putting it in proactively hoping that it will generate revenue,” he said.
Council is considering a 30-year TIF that shares some revenue with Lucas County. For the first 12 years, the city would take 75 percent of the TIF revenue and the county would take 25 percent.
For the remaining years, the county would take 100 percent of the TIF revenue collected from Lucas County-owned parcels in the TIF area while the city would take in 100 percent of the remaining TIF revenue.
The funds dispersed to the county could only be used on public infrastructure improvements as well, officials said.
City officials said the transportation and downtown master plans will serve as a roadmap for which infrastructure improvements should be prioritized. Some examples include sidewalk improvements, curb construction, or planting trees.
Mr. Sehlhorst said it is difficult to estimate how soon the TIF could start generating revenue and how much revenue that could be. It’s all dependent on property values increasing, he said.
“This is perhaps something we should have done 10 years ago,” he said. “When looking at other cities in Ohio, downtown Cincinnati implemented their Tax Increment Financing area in 2002 and they are just now receiving the benefit of putting that in place and funding infrastructure improvements and parking structures.”
Downtown Columbus followed suit in 2008, he added.
Councilman Tyrone Riley expressed concerns that the TIF revenue only would benefit downtown and not the city as a whole.
Councilman Gary Johnson countered he believes any TIF-funded downtown improvements would attract more people to want to work, live, and spend time and money downtown.
“This is basically how the entire city benefits from the downtown TIF,” he said.
Mr. Sehlhorst said he would like to have the TIF in place by the end of the year.
City council is scheduled to vote on the financing model Oct. 15.
First Published October 9, 2019, 10:03 p.m.
