Committee hears City of Ashland TID plan aimed at funding downtown apartment project

Members of the Ashland County Finance and Economic Development Committee discussed the City of Ashland’s proposed Tax Increment District (TID) plan, which the city intends to use to finance infrastructure and developer incentives for a downtown housing development.

Why it matters: The TID would capture future increases in property tax revenue within a defined district to pay for infrastructure, developer incentives and other projects. That captured “tax increment” does not change historic base allocations to the county, school district or technical college, but the distribution of future increments affects who pays for improvements and how much of the increased value is available as incentives.

A county speaker who detailed the mechanism described a TID as follows: the district’s base property value remains distributed to taxing jurisdictions; as property values rise because of development, the increase — called the tax increment — is retained for the TID to pay for infrastructure, debt service and incentives. The presentation included an estimate of about $19 million in total tax increment over the life of the district (to 2051), with a planned $3.5 million incentive to the developer and approximately $3.775 million in proposed city borrowing for immediate infrastructure needs. The city is evaluating whether to use general-obligation borrowing or TIF revenue bonds; using TIF revenue bonds would place repayment on the increment rather than the city’s full-faith-and-credit and could preserve the city’s general-obligation borrowing capacity.

Supervisors raised local concerns: whether contiguous parcels in the district could lead to future condemnation (speakers said the city had no present plan to condemn and would likely make market offers for properties) and how the district’s borrowing could impact the city’s ability to issue other general-obligation debt. A county finance advisor noted that general-obligation borrowing tied to the city can limit the city’s future bonding capacity and that TIF revenue bonds are an alternative that relies on the increment to repay debt.

Committee members discussed potential county benefits (new housing supply, more business activity and future property-tax base growth) and risks (added city debt load and the possibility that incentives reduce short-term increment available for infrastructure). Several supervisors asked for additional clarity on the city’s financing decisions and the district map, and staff said they would follow up with more detailed materials.

Ending: The committee did not take formal action; members requested additional financial detail from the city to understand the district’s projected increment, planned debt service, and developer incentives.