Tax dispute adds new chapter to 'tale of two cities'

Toledo Councilman Frank Szollosi, left, and his brother, Oregon Councilman Matt Szollosi, discuss Duck Creek, whose rechanneling was the focus of a boundary dispute. ZAPOTOSKY / BLADE Enlarge

The dispute over the boundary between Oregon and Toledo appears to be resolved, with the mayors of the two cities agreeing to a 50-50 split of the tax bounty from a proposed coke processing plant.

But the unexpected boundary drama underscored the enduring rivalry and affinity between the two cities.

"It's always on our minds," Oregon Mayor Marge Brown said.

It's been that way for almost 50 years.

Oregon was born as a municipality a mere 47 years ago, the result of Toledo's attempts to annex the largely rural and industrial Oregon Township.

"The city of Toledo wanted to annex the oil refineries. They wanted the tax base," recalls Gene Hagedorn, a former Oregon city councilman whose uncle, Erwin Hagedorn, was Oregon's first mayor.

"You can understand the tension," he said.

The incorporation of Oregon is a source of pride in the sprawling municipality swept by the winds of Lake Erie.

And yet, close ties exist between the two communities.

Toledo City Councilman Bob McCloskey said many residents of Oregon moved from East Toledo. Among them are Matt and Frank Szollosi, brothers who both serve on city councils - Matt in Oregon and Frank in Toledo.

They said they've had to agree to disagree a few times.

The Szollosis lived in East Toledo's Birmingham neighborhood, across from St. Stephen's Church on Genesee Street. Their parents moved to Oregon in 1977.

Frank, 32, said he opted to move into Toledo after he returned from college in Utah. Matt, 31, lives in Oregon and commutes to his law office in downtown Toledo.

Matt and Frank, whose parents were both Oregon City Council members, said they have discussed the coke plant issue passionately, while remaining close.

"Frank has advanced the city of Toledo's position," Matt said. "I have advanced Oregon's position. We've had numerous discussions, always agreeing both municipalities want to see the project go forward."

Frank said that settling the dispute avoided a dangerous court battle.

"U.S. Coking certainly has the right to take this project to West Virginia," one of the other states vying for the economic development project, "or anywhere else where it's not the Hatfield and McCoys," Frank Szollosi said.

With its farmland, irrigation ditches, and lonely crossroads, Oregon strikes the casual observer as more like a township than a city.

Its "main street" is a busy five-lane commercial strip - Navarre Avenue from I-280 to Coy Road.

With 18,326 residents on 28.5 square miles, Oregon averages 643 persons per square mile - half the population density of Lucas County, and a fraction of Toledo's density, 3,729 persons per square mile.

The calls to incorporate started in the 1940s, after Toledo proposed to annex two large chunks of Oregon. The annexation would have moved two refineries into the city: the present-day British Petroleum refinery at 4001 Cedar Point Rd. and the Sun Oil Co. refinery at 1819 Woodville Rd.

That 1942 effort stalled, but the city of Toledo didn't give up and continued to press its effort to annex Oregon to bring income tax into the city government and property tax into the school system.

Incorporation fever burst into the open when the Oregon and Jerusalem Democratic Clubs voted April 5, 1957, to oppose any annexation effort by Toledo.

One Oregon resident charged that Toledo was after "the cream of our tax crop."

Another warned that by annexing to Toledo, Oregon residents would get "the poorest type of government known."

Oregon officials claimed that Toledo threatened to deny water to Oregon if it didn't annex, and Toledo didn't deny it.

On Aug. 6, 1957, residents of Oregon Township voted 2,934 to 736 to incorporate as the Village of Oregon. Oregon was deemed a city two years later. The new municipality moved quickly to establish its own freshwater and wastewater and water treatment plants.

Toledo's then assistant law director, John Burkhart, now 85, said "We did have plans to annex what was then Oregon Township.

"We had a lot to gain by annexing [Oregon], but it was not to be," Mr. Burkhart said.

During the late 1950s and 1960s, Toledo's territory west of the Maumee River grew through annexation of the former Adams Township and most of Washington Township. Toledo offered township residents water, trash collection, and police and fire protection.

But while Toledo chomped away successfully at Adams and Washington townships, it got barely a nibble out of Oregon - successfully acquiring in 1942 only the parcel on which the city's Collins Park water treatment plant is located.

Mr. Burkhart said Toledo's tough line of refusing water to communities that didn't accept annexation backfired with Oregon. "The city followed that policy, but it proved to be the wrong thing and it pushed those people into incorporating and setting up their own water system," he said.

Mr. Burkhart said the city of Toledo accepted the defeat. "I don't think people were really opposed to their incorporation," he said. "It's a free country. There wasn't any fight about it after it happened." But he said, "we lost a big tax base."

James Haley, a former mayor of Oregon, said, "Toledo had said if you don't allow us to annex we're not going to extend water lines further into the township.

"Oregon said OK, fine, we'll put it to the voters. So they went ahead and incorporated," Mr. Haley recalled.

Mayor Brown said Oregonians don't forget that Toledo had its eye on Oregon's tax-rich industrial areas.

"It seems that a lot of individuals don't take Oregon seriously," Ms. Brown said. But she believes that Oregon's successful courting of the $350 million coke plant - even if that plant now appears to be mostly in Toledo - is opening some eyes.

"I think now people are going to realize, 'Boy, there's someone to reckon with,' " she said.

The tentative agreement reached March 30 establishes a joint economic development zone on 51 acres near Millard Avenue for the coke processing plant.

A review of property surveys showed that Duck Creek, the boundary between the two cities, had been artificially rechanneled over the years about 500 feet into Toledo territory. That meant that the land designated for the coke plant was entirely within Toledo.

After that discovery by Toledo city officials about a month ago, Toledo Mayor Jack Ford offered an even split for 40 years of the income-tax and property-tax revenues that would flow from the construction work and the 200 permanent jobs, rather than engage in a court battle over the boundaries that could kill the economic development project.

Ms. Brown at first reacted angrily, demanding an automatic renewal of the tax-sharing agreement at the end of 40 years. She said she relented for the sake of area workers.

Toledo Law Director Barb Herring said, "This is a really prime example of regional cooperation, the fact that we were able to reach agreement and we're able to move forward." She said U.S. Coking was "very happy. They wanted an agreement to be reached," Ms. Herring said.

Matt Szollosi called it "a landmark agreement that will solidify the relationship" between the two cities.

Frank Szollosi hailed the settlement, although he noted it took a change in the boundary lines to get Oregon to the negotiating table.

"A year and a half ago, I was talking about a [joint economic development zone] with Oregon and there was no interest. When the project was in the city of Oregon, the city of Oregon didn't want to talk to the city of Toledo about sharing revenue," Frank Szollosi said. He said the deal "lays the groundwork for future job deals" on industrial land bordering the coke plant.

The brothers said this was not the first instance of cooperation. They noted the construction of the Millard Avenue overpass of train tracks in 1998, and more recently Oregon's dropping of environmental objections to Toledo's $450 million settlement of a lawsuit with the federal government over sewage discharge.

Mr. McCloskey said he often has breakfast with friends in Oregon to discuss issues of common interest.

Mr. Haley said, "Oregon progressed slowly. I think the animosity we created in the early 1950s has subsided. It's kind of a joke now."

Contact Tom Troy at: tomtroy@theblade.com or 419-724-6058.