With annexation virtually at a standstill for almost four decades, Toledo has come to embrace a different approach to boosting its municipal tax revenues - joint economic development agreements with the 'burbs.
One of those agreements, built on the ashes of a failed annexation attempt in Monclova Township in the 1980s, is today generating more than $600,000 a year in tax revenue.
The latest example is the proposed creation of a large "joint economic development district" with Perrysburg Township.
The deal was born out of FedEx Ground's tentative determination to leave its Toledo facility and build a new shipping hub in the township, off I-75 at Buck Road.
While Mayor Carty Finkbeiner initially reacted angrily to Wood County's efforts to attract FedEx Ground to its jurisdiction, the mayor has come to see the deal as an opportunity to cement Toledo's image as a cooperative community.
"This is a first step in realizing we are in a bigger pie than the pie of Toledo or the pie of Perrysburg Township," Mr. Finkbeiner said last week as he presided over an outdoor news event attended by more than two dozen government and economic development officials from Lucas and Wood counties.
"This indeed is what we all must do if we want our children and grandchildren to enjoy the north-west Ohio that we grew up in," said the mayor, who says his family has roots in Perrysburg Township as far back as the Civil War.
On July 19, Mr. Finkbeiner held a news conference to publicly accuse Wood County of "poaching" in Toledo for new businesses.
The deal - for which a memorandum of understanding was approved last week by both Toledo City Council and the Perrysburg Township trustees - involves a simple exchange:
•Perrysburg Township needs water and sewer service to offer FedEx.
•Toledo needs tax revenue to continue paying for basic services for its nearly 300,000 residents.
Under the memorandum of understanding, a 2.25 percent payroll income tax would be levied on new industrial businesses - not residents - in the development district in return for Toledo selling water and sewer services. Toledo would continue to receive the same level of income tax revenues from FedEx that it currently receives, about $200,000 a year, and any growth in tax revenues would be split evenly with the township.
The tax revenue is a bonus for the township, which can only levy an income tax in conjunction with a municipal corporation. In addition, the agreement will discourage attempts at annexation by Perrysburg, Rossford, and Northwood because it removes the greatest incentive for annexation - water.
Township Trustee Craig LaHote said the agreement makes the township less desirable for annexation because "most of our annexation has occurred because of water and sewer."
It still depends on FedEx Ground deciding to buy an approximately 120-acre parcel east of I-75 near the Buck Road interchange. The shipper, with about 600 employees, operates out of a smaller facility in South Toledo off Reynolds Road.
Despite the mayor's conciliatory words at last week's news event, the administration is planning to take a harder line in the future against so-called "poaching."
An ordinance from the administration would prohibit any community that signs a future water contract with Toledo from aiding or soliciting any business to relocate from Toledo or from offering any economic development assistance, including tax abatements. One of the first to have to deal with this condition - if council approves it - could be Rossford, whose water deal is up for renewal next May.
Bob Reinbolt, Mr. Finkbeiner's chief of staff, said the intent is to encourage communities to enter into economic development agreements, such as the proposed JEDD in Perrysburg Township.
James Hartung, president of the Toledo-Lucas County Port Authority, cast the agreement in larger terms and tossed in southeast Michigan as a partner.
"This is truly a significant achievement. I hope it's an event that occurs with increasing frequency," Mr. Hartung said. "Northwest Ohio and southeast Michigan share an ideal of becoming a hub for transportation. Selling the region to those engaged in global commerce will require global thinking, global marketing."
The new district will abut on the other side of Glenwood Road an even larger district that has been in place since 1992 with the city of Rossford. That district includes the Bass Pro Shops retail store going up in the southeast corner of State Rt. 795 and I-75.
Toledo has three joint developments with Maumee, two of which also involve Monclova Township. Together, those agreements cover the Briarfield Business Park, the new Dana research campus, part of Arrowhead Industrial Park, and the Shops at Fallen Timbers. Much of the development stands on land Toledo purchased secretly in the early 1980s in hopes of having it annexed into the city.
In all, Toledo garnered $654,365 in revenues last year from its four tax-sharing agreements with Maumee, Monclova, Rossford, and Perrysburg.
The joint development agreements have emerged as the city has failed to expand its boundaries through annexation. Toledo's last significant annexations occurred in the 1950s and 1960s when it gobbled up all of Adams Township and most of Washington Township.
In the late 1980s, with Donna Owens as mayor, Toledo spent more than $14 million secretly buying 1,187 acres in Monclova.The city wanted to expand and attract new industry. It hoped to annex the Monclova land by buying a strip of land - including an apartment complex, a golf course fairway, and a utility easement - that connected the city and the township.
Maumee and Monclova fought the plan, and a Lucas County Common Pleas judge ruled the annexation illegal.
In 1991, Maumee and Toledo called a truce and struck a deal: Maumee would annex Toledo's Monclova Township land, instigating a tax-sharing agreement that would benefit both cities.
Future development agreements are in the works with Oregon over the proposed coke plant, Monclova and Swanton townships in connection with development at Toledo Express Airport, and with Lake Township over Toledo Metcalf Field Airport.
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