Subdivision funding criticized
Councilman says city should not subsidize road, sewer improvements for project
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.”
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.”
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.