Salem council sets hearing on Perry Township annexation agreement amid questions about 70/30 split and deed‑restriction abatements
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Summary
Council introduced Resolution 251202‑72 to set a public hearing on a cooperative economic development agreement with Perry Township. Members pressed staff on whether the '70/30' arrangement is a fee or income‑tax split, who will monitor disbursements, and how 12½‑year abatements on deed‑restricted parcels affect economic development.
The Salem City Council voted Dec. 2 to set a public hearing on a Cooperative Economic Development Agreement concerning annexations with Perry Township, while several council members raised unresolved questions about the pact’s financial mechanics and long‑term development effects.
Council member Mister Noll moved to waive rules to introduce Resolution 251202‑72, which the clerk described as a resolution to set a public hearing on the Cooperative Economic Development Agreement concerning annexations with Perry Township and declaring an emergency. The body agreed to introduce the resolution and set the hearing.
During the discussion members pressed staff on how a proposed '70/30' arrangement would operate. Council member Mister Salvino asked whether the split refers to income tax or real‑estate receipts and who would monitor the 30% disbursement. ‘‘Well, the 70 30, would that would be the income tax, or would that be on the real estate side?’’ he asked. Law Director Zellers replied he would “get with Rita” to confirm which disbursements were involved.
Councilors also discussed whether the arrangement constitutes a tax split. One councilor stated, “It’s a fee, not a tax,” clarifying that the agreement calls for a fee to be paid “in lieu of 70% of the income tax.” That distinction was offered as a legal and administrative difference for monitoring and auditing purposes.
Council member Mister Harrington summarized his prior economic analysis and cautioned that even if all revenue were new money, “the outcomes of those housing analysis was still not very favorable,” arguing the residential side alone would not necessarily drive commercial development. Members questioned whether a 12½‑year abatement on certain deed‑restricted parcels would prevent the agreement from generating the commercial growth the city seeks. Law Director Zellers said some exempted deed‑restricted parcels would not be affected, and that a fuller analysis from staff (Miss Sneads was referenced) could provide more detail.
The resolution as introduced sets a public hearing so councilors can collect public comment and staff can supply further economic and legal analyses before any final action.