Compromise Struck Over Possibility of Annexed Property
The city has been eyeing the property since last year but has met resistance from the Canaan Twp. Board of Trustees, who are worried that the annexation process will cost the township too much in lost tax revenues, according to Mike Noel from Panich and Noel Architects.
“One of the issues we ran into when we approached the township was that they have been losing real estate properties within their region over the last probably 15 years,” said Noel. “Several of them [were] worth quite a bit of money and they were seeing a decrease in their potential revenues or income.”
Ohio’s annexation law states that once a property has been annexed a greater percentage of property tax revenues will be gradually transferred from the township to the municipality. The state provides a formula for this transfer over a 12 year period – in the first three years following annexation the township would receive 80 percent of the tax revenues, and by the 12th year they would receive only 42.5 percent of the revenues.
In order to ease the township’s tax burden, Noel has proposed a revenue-sharing agreement that would delay this “step-down” process and allow Canaan Twp. to retain a greater percentage of the property tax revenues until development begins on the property.
This agreement would result in a short-term loss of revenues for Athens, which Noel estimated to be about $1,500 a year. However, Noel felt that the long-term revenues that would be gained if the site were to be developed would far outweigh this initial loss.
Noel said that the 15 acre property has great potential for economic development, and that annexing it would increase the property’s value and make it more profitable for both Athens and Canaan Twp. “Everyone will benefit from this,” he said.
At-Large Rep. Elahu Gosney questioned the necessity of the proposed agreement, expressing concern that it might set a precedent in which the city would be expected to negotiate extensively in future annexation petitions.
Noel said that he recommended this agreement in hopes of speeding up the annexation process, as well as avoiding the risk of having to take legal action against Canaan Twp. in order to get them to sign off on the annexation.
“Let’s face it,” he said, “for $1,500 it seems a lot more practical to do it this way than spend tens of thousands of dollars [in court costs] arguing back and forth about it even though we know what the outcome is.”
Council member Chris Fahl, fourth-ward rep., said that she would like to move forward with this agreement and commended Noel for his efforts to bring the city and the township together.
“The Canaan Twp. trustees should realize that they are being afforded an excellent opportunity,” she said. “They have not necessarily been team players in a lot of the things we’ve done in the past; this is a hand out to them to be able to … play together in the future.”
Fahl noted that regardless of whether the Canaan Twp. trustees approve the revenue-sharing agreement that they cannot legally prevent the annexation from taking place.