Sub­di­vi­sion fund­ing crit­i­cized

Coun­cil­man says city should not sub­si­dize road, sewer im­prove­ments for project

The Morning Journal (Lorain, OH) - - FRONT PAGE - By Richard Pay­erchin

As plans go forward for a new neigh­bor­hood on Lorain’s west side, the city should not sub­si­dize road and sewer im­prove­ments for a pri­vate de­vel­oper, said Lorain Coun­cil­man-atLarge Joe Koz­iura.

How­ever, an as­sess­ment on the de­vel­oper is a way to pay for pub­lic in­fra­struc­ture work that Lorain needs to do even with­out the new sub­di­vi­sion, said Ward 8 Coun­cil­man Joshua Thorns­berry and Mayor Chase Rite­nauer.

On Oct. 16, Lorain City Coun­cil will con­sider re­vok­ing a Sept. 18 res­o­lu­tion of in­tent to im­prove Kolbe Road from Jaeger Road to 2,555 feet north.

The project would ben­e­fit the new Cor­ner­stone Farms sub­di­vi­sion, which plans 151 new home lots on al­most 53 acres at the north­east corner of Jaeger and Kolbe roads.

The new neigh­bor­hood is

planned by de­vel­oper Tom Oster of Lorain Cor­ner­stone Farms LLC.

How to pay?

The Oct. 16 res­o­lu­tion will fol­low sev­eral weeks of dis­cus­sion about how to pay for roads, sew­ers, wa­ter lines and other pub­lic im­prove­ments for the new neigh­bor­hood.

Lorain City Coun­cil on Sept. 18 stated its in­ten­tion to as­sess Lorain Cor­ner­stone Farms LLC for up to $450,000 worth of work, ac­cord­ing to the city leg­is­la­tion.

But that amounts to the city fi­nanc­ing im­prove­ments for the de­vel­oper, in­stead re­quir­ing the de­vel­oper to pay for the work to get the project go­ing, Koz­iura said.

“I am to­tally op­posed to the city of Lorain as­sess­ing prop­erty for a pri­vate de­vel­oper,” Koz­iura told his fel­low Coun­cil mem­bers this month.

Since then, Koz­iura added he is not against new devel­op­ment in Lorain gen­er­ally or the Cor­ner­stone Farms neigh­bor­hood specif­i­cally.

But the de­vel­oper should pay for the road im­prove­ments, not the city, Koz­iura said.

That’s the way it is done in nearby com­mu­ni­ties such as Avon, Avon Lake, North Ridgeville and West­lake, all cities that have had growth in re­cent years, he said.

“Peo­ple say well, we’re not Avon, we’re not Avon Lake, we’re not West­lake,” Koz­iura said. “Well dammit, so what? We’re Lorain

and we have ev­ery right to do the same thing every­body else does.”

Find­ing sup­port

Thorns­berry and Rite­nauer have voiced sup­port for the method of fi­nanc­ing.

Thorns­berry com­piled project facts and fig­ures he pre­sented to Coun­cil.

Koz­iura coun­tered that “man­i­festo” was “smoke and mir­rors” to ob­scure the fact the city of Lorain will not get much fi­nan­cial ben­e­fit from the new homes.

The as­sess­ments are a way for Lorain to cover costs of in­fra­struc­ture work that the city needs to do any­way, Thorns­berry and Rite­nauer said.

The ad­min­is­tra­tion con­sulted the Law Depart­ment and in terms of how to get those dol­lars, this was the way forward, Rite­nauer said.

He noted Koz­iura sup­ported a zon­ing change for Cor­ner­stone Farms.

“So, that is not the is­sue, the is­sue is this as­sess­ment,” Rite­nauer said to Koz­iura this month. “Frankly, I can cer­tainly re­spect your po­si­tion in terms of a philo­soph­i­cal dis­agree­ment.

“We just hap­pen to dis­agree with re­gard to this par­tic­u­lar as­sess­ment be­cause I don’t liken it to a lot of the as­sess­ments that have got­ten us into trou­ble over the years.”

Dif­fer­ent meth­ods

Koz­iura ex­plained the dif­fer­ence in fi­nanc­ing the im­prove­ments that will help the new homes.

If the de­vel­oper paid for the work, the de­vel­oper could get that money back later by charg­ing more for the lots and homes in the

new sub­di­vi­sion, Koz­iura said.

That is how it should be done, he said.

In Lorain, the city does not have the cash to pay up front for the Cor­ner­stone Farms road work, Koz­iura said.

Lorain will have to bor­row the money to pay for it; that money could be paid back over the life of the project, he said.

If the land for Cor­ner­stone Farms goes un­de­vel­oped, the de­vel­oper has made a per­sonal guar­an­tee to pay the city as­sess­ment, ac­cord­ing to the city res­o­lu­tion.

How­ever, Koz­iura called that a “shell com­pany,” mak­ing fu­ture col­lec­tions dif­fi­cult.

To im­prove an ex­ist­ing road, the city may bor­row money to pay for the project, then as­sess the prop­erty own­ers along the street, he said.

The prop­erty own­ers ben­e­fit be­cause the im­prove­ments help their prop­erty value, Koz­iura said.

“You don’t go out and as­sess even­tual own­ers,” he said.

Cor­ner­stone Farms is to be built in phases, but if a fu­ture res­i­dent does not pay the as­sess­ment, the city still must re­pay money the city bor­rowed for the im­prove­ments, Koz­iura said.

In Coun­cil de­lib­er­a­tions, Rite­nauer noted Lorain res­i­dents in the past have pe­ti­tioned the city to im­prove streets, so the city used its bor­row­ing power to pay for im­prove­ments.

But when houses went va­cant or went into fore­clo­sure, no one paid prop­erty taxes and the city had to sub­si­dize the debt for some of those projects, the mayor said.


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