Thursday, September 19, 2002
Mall builders want tax break
Critics contend they're not necessary
By Jennifer Edwards, firstname.lastname@example.org
The Cincinnati Enquirer
WEST CHESTER TWP. The competition to attract retailers to proposed malls in Butler and Warren counties is becoming a battle for tax incentives.
A West Chester mall developer is asking the township and Butler County for $6 million in tax incentives up front to be paid off over 15 to 20 years with:
County sales tax revenues from the development.
A township tax increment-financing district already in place where the mall is located, on the southeast corner of Union Centre Boulevard and Interstate 75.
David Kass, president of Continental Retail Development of Columbus, is building a $100 million lifestyle center with a movie theater, shops, restaurants, offices and 400 apartments.
He said he wants the incentives in part to stay competitive with Deerfield Towne Center, a smaller lifestyle center Casto Realty and Anderson Real Estate are planning on Mason-Montgomery Road.
Deerfield Township leaders are expected to approve $9.5 million in tax-increment financing for that center and another strip center north on Mason-Montgomery at Socialville-Foster.
The Deerfield TIF would set aside tax revenue from the developments to pay for road improvements to Mason-Montgomery, Wilkens Boulevard and Irwin-Simpson Road.
Mr. Kass said Casto would be able to offer reduced rents to retailers in Deerfield Towne Centre as a result.
Mr. Kass wants incentives to pay for on- and off-site improvements to his mall, he said particularly turn lanes off Union Centre Boulevard and a main road to link Union Centre to Allen Road.
It helps you to be more aggressive with retailers, Mr. Kass said. I think Deerfield Township developers are getting some help, and we would certainly expect to get some help at some point.
But some residents and leaders strongly object to tax incentives, particularly for malls. Four shopping centers have been proposed in West Chester, plus two malls and the Deerfield center in Warren County. Neighbors question the need for public subsidies when developers insist there is a demand for retail.
Many residents say they also loathe tax incentives in principle.
If there's such a demand for all this retail, there's no reason why we should be subsidizing them, said Susan Hendel, a 24-year West Chester resident. It's not fair to the community. The community is tired of hearing about this mall war, and it's really kind of stupid to have all these malls and developers who think they need to be here.
A tax increment-financing district was established in the Union Centre Boulevard area at I-75 in 1990, but it is the township's choice to use money from that TIF to pay for infrastructure improvements at the mall, said Judith Carter, the township's assistant administrator.
Should the township agree to Mr. Kass's request, property taxes from his land would be used to fund his improvements.
Trustee President Jose Alvarez wasn't too keen on the idea, saying tax incentives for retail developers create more problems than they solve.
You distort the marketplace and also end up increasing the ante for developers to offer more and retailers will try to take more, he said. It's a never-ending battle and in the end I'm not sure that's a benefit to the citizens because I'm having citizens pay for roads, development, traffic congestion and other things that aren't part of the amenities that we do want to bring to the township.
Mr. Kass privately met with West Chester Township Administrator Dave Gully and Ms. Carter on Monday to discuss the incentive. He repeated his request to Butler County Commissioner Mike Fox that night.
The county would use sales tax revenues from the lifestyle center to pay a portion of the incentive to Mr. Kass. The Streets of West Chester is expected to generate about $500,000 a year in sales tax revenues. Mr. Kass said he already has spent $30 million on the project.
The incentive is worth exploring, Mr. Fox said, because he fears West Chester is losing the mall war to Warren County.
There's two questions we have to review, Mr. Fox said. Is the Deerfield Township offer putting Butler County at a competitive disadvantage? Is this worth the investment? There's three reasons you want malls: convenience for your residents and they provide jobs and tax revenues. ... But if you're giving away the tax revenue, what's the point?
West Chester recently lost a $20 million manufacturing center with up to 100 employees to Monroe in part because West Chester's tax incentives are lower, according to a Tuesday e-mail sent to county and township leaders and the superintendent of Lakota schools from Melissa Koehler, executive director of the West Chester Community Improvement Corp.
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