Dayton City Council hears plan for pay-as-you-go tax abatement to cover Parkway infrastructure gap

City consultants and the developer presented a financing concept to the Dayton City Council on Jan. 14 to cover an estimated $5 million–$6 million infrastructure bill for a proposed multi‑phase rental project in the Parkway neighborhood.

Jason Arzewald of Ehlers, the city’s financial adviser, told the council the developer’s initial pro forma shows the project cannot absorb the extraordinary roadway and intersection costs without public help. Arzewald said the firm’s review found the project’s rents and costs “meet what we would expect to see” but that “when we run that analysis, we determine that that return on investment at the end of the day is less than would be required to attract, equity and debt for this project.”

Arzewald outlined a pay‑as‑you‑go tax abatement as the preferred option to fill the remaining financing gap. Under the concept, the city would abate a portion of its share of property taxes (Ehlers proposed roughly a 75% abatement in the example) and the developer would borrow from private lenders and rely on future abatement receipts to pay that debt. Arzewald summarized how it…