How does the Bridge Street District impact the Dublin City School District?As part of the early analysis conducted for the Bridge Street District, the City initiated a residential market analysis to study short- and long-term housing demand trends for the Dublin region as well as the demand for the type of housing typical to a walkable urban environment. Laurie Volk with Zimmerman/Volk, a nationally recognized expert in housing markets, found that there is significant market demand for a much broader variety of housing types in the Bridge Street District over the next few years, and in particular, the housing market increasingly demands compact, walkable, mixed use settings.
The market also indicates that singles, couples, and families each comprise about one-third of the demand in the U.S. housing market. This is very different from the market of the previous 50-60 years, where families exerted more than half of overall market demand. As a direct result of the aging Baby Boomers – many of whom are choosing to “downsize” from their larger family homes, as well as the Millennials and their preferences for smaller homes in walkable areas – the development community is responding to the demand for housing by building housing suited to these changing market demands and demographic trends.
A significant number of these units will be one-bedroom and marketed to empty nesters and younger singles. Typically, these units have much less of an effect on the school system than a traditional single family subdivision of equal size would have.
The following information was taken from the study prepared for the City by Zimmerman/Volk:
Basic Housing Demand Characteristics
- Over 47% of residents are between the ages of 18 and 34
- 70-80% will have no children at home
- 53% of housing demand is for multiple-family for rent
- 28.3% of housing demand is for multiple-family for sale
- 11.7% of housing demand is for single-family attached for sale
- 6.2% of housing demand is for single-family detached for sale
Many local developers who have already built these types of multiple-family and smaller single-family units in walkable, urban areas such as Harrison West near the Short North, Grandview Yard in Grandview Heights, and Crawford Hoying Development Partners’ Lane Avenue project in Upper Arlington confirm the findings of the market analysis. They have found that, despite these projects being located in desirable school districts, there are very few families with children electing to live in smaller one or two bedroom residences.
As a result, the impact of the Bridge Street District development on the Dublin City School District in terms of the number of children in the schools is expected to be very low. In fact, the City projects that the development of the Bridge Street District will provide a substantial net fiscal benefit to the school district.
The school district stands to gain from the Bridge Street District via the increase in property values resulting from dense, walkable, mixed use development when compared to property values generated by the existing low density development in the area. The anticipated net fiscal impact (net new revenues from property taxes vs. new costs resulting from minimal increased demand on the schools) of the Bridge Street District on the schools will be significantly more favorable than would a standard suburban development pattern. The City of Dublin and the Dublin City School District have been participating in discussions to identify opportunities for ongoing partnerships in this regard to make sure the interests of all parties are fully considered.
Dublin’s economic development strategies over the past forty years have served the fiscal needs of the Dublin City School District extremely well. The City of Dublin has demonstrated a very good track record regarding the implementation of successful development policies that benefit the Dublin City School District, and view the quality of the Dublin City School system as one of our community’s more important assets.
What is tax increment financing?Tax increment financing (TIF) is a mechanism that local governments often use to help finance public infrastructure improvements using the increased taxes realized by the increased property values that result from development and redevelopment.
Property taxes are based on the taxable value of a property, as determined by the County Auditor, as well as the tax rate (based on millage) where the property is located. In Dublin, most properties are located in tax districts 273 and 274 (Washington Township/Dublin City Schools). The City of Dublin receives approximately 2% of property taxes, and remaining property taxes are directed to the township, county, schools and other agencies (other taxing entities).
After establishing the taxable value of a property when a TIF district is authorized, the net new (or incremental) taxes that result from the redevelopment of a vacant or underutilized property within the TIF district are captured by the City for a period of years. A portion of the incremental tax revenues received by the City are used during that time to help finance public infrastructure projects. Most of the construction costs of the City’s Emerald Parkway, for example, has been funded via the adjacent office development through such a TIF mechanism.
New development made possible by tax increment financing can create significant new property tax revenue, but the revenue will be generated and collected over time – typically up to 30 years. Many public infrastructure projects are funded up-front through the City’s Capital Improvement Tax Fund or the General Fund and repaid through the funds collected via the TIF.
At the end of the TIF period, usually 30 years or when the TIF obligation has repaid the City for the stated public infrastructure improvements (whichever comes first), the incremental tax revenues will be directed to each of the original taxing entities. This results in a win-win situation in which the City’s up-front investment in public infrastructure has been partially or fully repaid and the tax base significantly increased from valuable new development projects, which benefits all taxing entities.
The City of Dublin currently has 24 active commercial TIFs. Of the 24, 21 are currently “non-school,” meaning the Dublin City School District is made whole, receiving an amount equal to the amount the school district would have received if the TIF had not been in place (the school district is held harmless). The three straight TIFs (those TIFs in which all the service payments are paid to the City) are the Historic Dublin Parking TIF, the Bridge & High TIF, and the Perimeter West TIF. Recognizing the unique nature of the Bridge Street redevelopment, Dublin City Schools approved the use of straight TIFs for both the Historic Dublin Parking and Bridge & High TIFs in 2001 and 2008, respectively.
The value of the improvements within all of the commercial TIFs is in excess of $480 million, which was expected to generate nearly $9.6 million in 2013 for Dublin City Schools and $6.9 million for the City of Dublin. The TIF revenue that has been or will be generated over the life of these TIFs has resulted in public improvements to date in excess of $101 million. Some examples of those improvements include the construction of Woerner Temple Drive, Rings Road improvements (widening and the bridge over I-270), construction of the roadway network supporting Dublin Methodist Hospital, utility burial, and parking improvements within Historic Dublin. Additionally, the use of TIFs has been instrumental in the construction of Emerald Parkway. Once the final phase of Emerald Parkway is completed in 2014, a significant amount of land will be opened up for commercial development. It is anticipated that approximately 60% of the construction costs of Emerald Parkway will have been paid for with TIF revenue.
As stated above, the City has typically used “non-school” TIFs. However, based on the level of public and other infrastructure investment that has been identified as needed in the Bridge Street District, the City will need a strong financial partnership with the School District. In order to advance the implementation of the Bridge Street District, the City will need to craft a partnership agreement with the Dublin City School District to provide a TIF structure that provides a higher level of service payments than what the City receives from a more traditional “non-school” TIF. The City of Dublin and the Dublin City School District have been participating in discussions to develop terms of a partnership agreement in this regard. The City does not expect that the types of development planned for the Bridge Street District will create any significant service or facility demands for the Dublin City School District. Refer to “How does the Bridge Street District impact the Dublin City School District?”
What is the financial impact of the Bridge Street District on the rest of the City?One the principal motivations for implementing the Bridge Street District plans is to help ensure Dublin’s long term economic competitiveness. Studies by Battelle and other nationally-recognized agencies have reaffirmed that the type of denser, mixed-use, vibrant, walkable area planned for the Bridge Street District will enhance our City’s ability to attract and retain young talent – a critical component to our community’s long term economic success.
Additionally, the City has conducted several studies on the financial impact of the Bridge Street District on the City’s finances, including estimates of public costs, increased property values, and potential returns from new employment and new residents. This study employed the services of an experienced financial analyst, TischlerBise, overseen by the City’s Finance Director.
The fiscal impact analysis results show that projected revenues generated by development within the Bridge Street District will provide cumulative fiscal surpluses over the long run and will be sufficient to cover the resulting operating and capital costs to Some of the planned public improvements within the Bridge Street District will also be addressing larger citywide infrastructure needs. While some public infrastructure projects will likely be funded up front by the Capital Improvement Tax Fund or the General Fund, the City will establish Tax Increment Financing (TIF) district(s), as it has done frequently in the past. TIF district(s), limited to specific areas of the Bridge Street District, will generate service payments from the property owners through property taxes resulting from increased property values. The service payments will help pay the City back for the costs of the necessary public infrastructure in the TIF district(s), including new streets, public parking, utilities, etc. Refer to “What is Tax Increment Financing?” for more information on TIF districts.
Unlike annexation or “greenfield” development that typically occurs in undeveloped land on the outskirts of the city, there are existing economies of scale from a service delivery perspective, since the Bridge Street District is located within the core of our community and the City already serves portions of the District with existing utility and roadway infrastructure. Also, the highly compact nature of this development substantially reduces the per unit costs of delivering public services, when compared to the rest of Dublin’s lower density, more dispersed patterns of development. However, due to the amount of some of the unique infrastructure required to implement the Bridge Street District vision, the fiscal results indicate that, without some form of Tax Increment Financing, the City’s existing tax base would have to subsidize the Bridge Street District infrastructure plan. Because the analysis assumes the Tax Increment Financing Districts are established immediately, with a 30-year life, the results indicate the faster (and more) development that occurs, the better the fiscal results due to timing of debt service.
How will the City pay for the major public improvements, such as the realignment of Riverside Drive, the roundabout at State Route 161, the new riverfront park, and the pedestrian bridge?The realignment of Riverside Drive, the roundabout at Riverside Drive/SR 161, the riverfront park, and the pedestrian bridge represent significant City capital improvement projects, and are currently programmed in the City’s recently approved 2014-2018 Capital Improvements Program. Funding for those projects has been identified and comes from the Capital Improvements Tax Fund, which receives 25% of the income tax revenue that the City receives.
In addition to the above mentioned projects, there will be a number of other infrastructure improvements that will be completed in tandem with the private developments. These include roadway construction, sidewalk/shared-use paths, and utility installation and relocation. While those projects will likely be funded up front by the Capital Improvement Tax Fund or the General Fund, the City will establish Tax Increment Financing (TIF) districts, as it has done frequently in the past, which will generate service payments from the property owners that will help to pay the City back for the costs of the improvements in those areas.
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