Transcript No Slide Title

EVALUTING TIF PROJECTS
Sean Fraunfelter, CPA
[email protected]
513-265-3045
BACKGROUND WORK ON TIFs
Grove City $17M*
 Liberty Interchange $41M*
 Austin Center $40-60M#  City of Trenton
 Dayton Mall Project $6M* West Carrolton
 City of Englewood
 SR747/Princeton Road
 3 for Butler Township
 Village of Mt. Orab
 Huber Heights $3M*
 Various CRA Analysis
 City of Springboro
 School District impacts

* bond deal
# expected bond amount
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?
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?
Always check their land values!
Type
Industrial
Retail
Acreage
89.42
7.78
Developer
Value
83,571
309,764
Average of
Surrounding Parcels
Difference
27,188
152,312
(5,041,806)
(1,224,974)
Net Decrease
AV Decrease
Annual Tax Difference
(6,266,780)
(2,193,373)
(138,045)
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
Get real

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
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.
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
Other key considerations




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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
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
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