Development zone ruled dissolved
4/9/2005A 579-acre joint economic development zone in Monclova Township might not legally exist, according to a ruling issued this week by a Lucas County Common Pleas Court judge.
After years of disputes between the township and the cities of Maumee and Toledo over the land, the zone was set up in 2003 so the three entities could split taxes, initially pegged at about $150,000 a year for each, from the area while sharing the cost of infrastructure improvements and services within the zone.
The zone is located southwest of I-475 and Salisbury Road and includes the Briarfield Business Park.
Township voters approved creation of the zone, but the ruling by Judge Charles Wittenberg states that the contract regulating the zone dissolved on March 3, 2004.
"I don't know what the actual effect of the decision is," said Walter Celley, attorney for the township. "We haven't had time to digest it, analyze it, and determine its effect on the zone itself."
The contract establishing the zone states that it would be "automatically terminated" three months after its creation if the zone's governing board did not adopt a resolution to levy an income tax. The governing board voted in February, 2004, to levy a 1.5 percent income tax, but the court ruled that the levy was invalid.
The court ruling says that state law requires voters living in a joint economic development zone to approve an income tax before it goes into effect. There were two registered voters living in the zone when its governing board levied the tax, the ruling says, but the board never put the issue on a ballot.
The court decided that because the governing board did not put the tax before voters, the board did not properly levy a tax and the enterprise zone contract automatically dissolved.
"It's hard to say what's going to happen now," Maumee Mayor Tim Wagener said. "We have to find out what options we have. We may have to go back to the voters of Monclova Township and redraw the zone."
The courts began looking at the development zone in March, 2004 after a group of residents filed a lawsuit to stop the income tax.
David Jankowski, a township resident and business owner; Nancy Deeds, a Maumee resident who works in the development zone, and Toledoan Robert Barnhart, who also works in the zone, filed the lawsuit against the zone's board of directors, the township trustees, and the cities of Maumee and Toledo.
Sheilah McAdams, attorney for Maumee, said she was disappointed by the judge's ruling. She said that after an initial review of the court decision, she believes the ruling eliminates the joint economic development zone.
But Mr. Celley said the zone might still be valid.
"The decision dissolves the contract, but the contract is somewhat different from the zone itself," he said.
The court ruling could affect another tax-sharing agreement involving Maumee, Toledo, and the township.
The three entities have a cooperative economic development area that covers the site of the Dana Corp.'s Automotive Systems Group Technology Center in Maumee.
That agreement is partially dependent on the joint economic development zone, and if the zone is invalid, officials said, it could affect whether the township can collect taxes through the other agreement.
The battle over land where much of Lucas County's growth is occurring began in the mid-1980s when Toledo spent more than $14 million secretly acquiring 1,187 acres in the township, which the city intended to annex.
However, Maumee successfully battled the annexation in court, arguing that the acreage wasn't immediately adjacent to Toledo, a necessary element to permit annexation.
Most of the land was sold, but Toledo still owned about 300 acres. Plans for a joint economic development zone involving the acreage were made between Toledo and Maumee. But unresolved at the time was what part the township would have in the deal, or whether the land would be annexed by Maumee.
Finally, Toledo, Maumee, and the township agreed to stop fighting over annexation and share income tax revenues over the entire 579 acres of the joint economic development zone.
Blade staff writer Tad Vezner contributed to this report.
Contact Rachel Zinn at:
rzinn@theblade.com
or 419-410-5055.