MOUNT VERNON — Mount Vernon City Council heard what residents said about offering incentives to developers and postponed decisions until their next meeting.
Legislation up for a third reading at Monday’s meeting included allowing the proposed Arista Villas development to join the city’s New Community Authority.
It also included legislation creating tax increment financing (TIF) districts for Arista Villas and Founder’s Grove subdivision on Upper Gilchrist Road.
Councilman James Mahan voted to postpone the legislation. However, he wants a resolution on the incentives by the Aug. 10 meeting.
“I do think we need to get what we need to bring this in for a landing. The people involved in this deserve an up or down vote,” he said. “I won’t vote for another postponement. I think we need to get the legislation straightened out.”
Don Carr opposes the tax incentives. He believes the city has not presented enough detailed information on the NCA and TIFs.
“What I came to believe is there is so much more harm, known and unknown, about this financial arrangement than there are benefits to the residents who you represent,” he said.
Carr said the city is putting a lot of faith in a property owner who represents an out-of-state equity company that knew the financial responsibilities when planning started in 2023.
He said if all 100 planned homes sell as advertised, the developer could potentially see a $6 million profit.
“Why are we the residents of Mount Vernon contributing millions of dollars to a developer’s building campaign?” he asked.
“Many residents believe the use of the New Community Authority tool should be used to generate funds to improve the surrounding streets and infrastructure of a development to help all of us deal with the increase in population and road improvements.”
Resident calls for evidence, transparency
Jennifer Shoman questioned what evidence shows the developments would not occur without incentives. She also asked when the incentives expire.
Referencing the oft-quoted statement “growth pays for growth,” Shoman said it appears the homeowner ultimately bears much of the cost rather than the developer, who profits from building and selling the subdivision homes.
Homeowners in an NCA pay a fee in addition to property taxes. The legislation calls for authorizing up to a 10-mill additional fee. However, the final number is not settled.
“How do you approve tax incentives without being fully aware of the details?” Shoman asked. “… What measurable public benefit has previously been seen by the incentive?
“Has the city actually evaluated these benefits to justify the long-term costs imposed on the homeowners?”
Shoman called for transparency when approving developments that include ongoing assessments that the home buyer might not realize are included in the deed.
In addition to giving a tax incentive to an out-of-state developer, Susan Homan was concerned about losing the existing woodlands.
“Most people that we spoke with before the election said they wanted this property to stay R1 because they did not want all the woods leveled,” she said.
Councilwoman Amber Keener said the development plan fits the current R1 zoning.
Additionally, Homan noted concerns about stormwater retention plans and lowered home values.
“I believe this developer should pay a larger tax due to the problems that this project may cause the city,” she said.
Residents still have questions
Bob Beck appreciated the public hearing on the tax incentives but said it was not long enough and questions remain.
He also is concerned about the schools receiving their money.
City Auditor Daniel Brinkman said TIFs do not raise taxes on anyone, they redirect tax revenue on new growth/improvements. By law, the schools must still receive their portion of revenue that growth/improvements generate.
“Before, you could take the growth in school dollars and redirect that. You can’t do that anymore,” he said. “The schools are completely unaffected by the new TIFs.”
Darby Dooley, an attorney with Bricker Graydon representing the city, responded to some of residents’ questions.
A third-party entity would issue bonds to generate the money needed to pay for the development’s infrastructure. TIF and NCA revenue will secure the debt, not the city.
If the TIF and NCA do not generate enough money to repay the bonds, the financial risk falls on the third-party entity bears the risk, not the city or taxpayers.
Regarding the lack of specific numbers in some areas, Dooley said the paperwork and process takes much time.
The city has limited the amount the developer can be reimbursed and the amount of the NCA fee (10 mills). Dooley said the final number might be less than 10 mills.
He estimates home buyers will pay between $1,000 and $1,500 annually on a 10-mill NCA fee. That roughly equates to an additional month’s rent.
Regarding home buyers being aware of the NCA fee, he said the charge is recorded and will surface in a title search when buying the property.
Several council members thanked the residents for attending the hearing and council meeting and voicing their thoughts.
