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Council approves two tax relief requests

$60,000 total for two businesses

SOLON– They were similar requests.
At a Nov. 20 meeting, Solon City Council members approved two Tax Increment Finance (TIF) applications for two separate buildings on the city’s south side.
Both requests sought an amount equal to three years of property taxes. Both failed to qualify for the city’s existing tax abatement program.
Both were approved by council members.
But there were some significant differences.
Council approved a total of $60,000 in TIF funding– $45,000 for a new building constructed by Eric Waddell at 100 Windflower Ln. which houses The Empire Fitness and Nutrition, and $15,000 for Steve Yakish and the existing site of Jim’s Septic Service at 1500 S. Market St.
According to City Administrator Cami Rasmussen, Waddell’s property is zoned for industrial use, but did not qualify for tax abatement because the use is not industrial.
Waddell submitted a TIF application seeking the equivalent of a three-year, 100 percent tax abatement which the council’s finance committee reviewed, Rasmussen noted.
She indicated the non-industrial use had not been considered when the city’s tax abatement program was established.
“It wasn’t anticipated, so now here we are,” she said. “He’s looking for some financial assistance with the building.”
Council member Steve Duncan, a member of the finance committee, reported Waddell was originally asking for $75,000.
“Our guiding principal basically on TIF is what financial position are we in, or can be in, as a city to help any business that makes those requests,” Duncan explained.
He said the committee started its considerations in the $30-35,000 range and then asked Rasmussen to estimate the impact of a $45,000 contribution.
Rasmussen provided council members with a projection of the impact of both TIF requests on the city’s general fund.
She told council members the amount was difficult to estimate because property valuations will not be released until January.
“We just want to make sure we are always increasing our general fund, we are not ever dipping below the previous year or getting too close to the previous year because as we know, expenses for city operations increases each year,” she said. “Looking at these numbers I feel comfortable with the $45,000 request.”
Duncan said Rasmussen’s estimates have been accurate in the past.
“I think this is a good alternative for us as a city,” he said. “Great project. Business is open and moving, going to do nothing but grow in our community.”
Council members approved $45,000 in TIF funding on a 4-0 vote with member Shawn Mercer absent.
The Yakish project also did not qualify for industrial tax abatement, but for a different reason– it was located outside the city limits when the program’s boundaries were established.
Rasmussen said Yakish originally requested assistance from the city in 2017 when the new location of Jim’s Septic Service was constructed. Council members at the time agreed to reimburse $15,000 in property taxes over three years.
But that award was based on estimates provided to Yakish by the Johnson County Assessor’s Office, she said, and the actual tax turned out to be approximately double the estimate.
No error was made by the city, Rasmussen said, and the city is under no obligation to increase the amount, although council members could consider a second tax rebate as a gesture of good will.
Yakish submitted a second application seeking an additional $15,000 over three years.
The request did not go to the finance committee, she said.
The city is currently in the second year of the three-year agreement approved in November of 2017, Rasmussen noted. If approved, the new agreement would begin in the 2022 fiscal year.
There were no questions from council members and a motion to approve the request was approved on a 3-1 vote with Lauren Whitehead opposed.