Multiple government agencies will likely face a reduction in future tax revenue due to yet another issue with one of the City of Marion’s tax increment financing districts.
The City of Marion, Marion Community Schools, Marion Public Library and other governmental agencies face paying back hundreds of thousands of dollars out of future tax revenue to Cafe Valley. The company’s president claims the business is owed the money due to a mistake in the handling of the bakery’s TIF district.
Business personal property, typically equipment or machinery, valued at a little bit more than $10 million in 2015 and more than $15 million in 2016 was never added to the company’s allocation area for its tax increment financing when it should have, according to city and county officials.
When a TIF district is established, the parcels included in the TIF district are sent to the Auditor’s Office, which then marks the parcels as ones that will contribute to TIF.
In 2013, when the bond agreements were written and approved regarding Cafe Valley, Grant County Auditor Roger Bainbridge said his office was told that the allocation area would have personal property included. However, no parcel information was included at that time.
That’s because the the parcel number wasn’t created until 2015 under the name of CV East, LLC by the County Assessor Gary Landrum at an assessed value of $10.3 million, according to county tax records. At that time, Bainbridge said his office was never notified that the CV East, LLC parcel was the personal property talked about in 2013 and meant for Café Valley’s TIF, according to Bainbridge in emails dated June 15, 2017 between Polhill, Bainbridge and other local government officials obtained by the Chronicle-Tribune.
Bainbridge added in an email that his office had searched their snail mail and email for any reminder or notification that the personal property parcel should be added. Not notification was found, though Bainbridge said Tuesday it’s possible the office did receive it but simply lost it.
“Did we let down some people’s expectations of us? Yes,” Bainbridge said. “But were those expectations reasonable? That’s the real question. I don’t think it was fair to think we could have remembered such a small detail from three years ago. That’s kind of a tall thing to ask. We’re just human beings.”
As a result, the personal property Cafe Valley bought has been taxed as if it isn’t in the TIF area, sending revenue to the City of Marion, Marion Community Schools, Center Township, Marion Public Library and Grant County instead of being designated as TIF revenue, as originally planned.
Cafe Valley has threatened to sue Bainbridge over the shortfall, though no lawsuit as yet to be filed as of Tuesday.
In an email to Bainbridge, Polhill describes Banbridge’s excuses as a “guilt trip” and that it will not work.
“Cafe Valley is a good neighbor and (corporate) partner with the city and extended community,” Polhill writes. “You have no right to misappropriate our funds for other needs ... you need to fix your budgets. Not effectively double tax our companies.”
To fix the issue, Bainbridge writes in an email that his legal counsel has suggested to withhold the amounts owed from the various governmental units, adding that State Auditor Tera Klutz has proposed an agreement be made by the aforementioned government agencies, the city’s redevelopment commission and Cafe Valley to spread out the withheld payments over the next two to four years, starting in 2018.