Grace Kirchner, Leader Correspondent
The sale of an assisted living facility in Clintonville apparently violated the terms of a tax incremental financing district payback plan and could cost the city hundreds of thousands of dollars.
Interim City Administrator Chuck Nell told the Common Council last week that the sale of the Angelus Retirement Community, an assisted living facility, to MHDC Clintonville, LLC, parent company of Aster Retirement Community, violated the terms of the TIF.
Nell said the development agreement required Angelus to maintain tax payments to the city until the debt for the TIF borrowing was eliminated and precluded Angelus from selling the property to a tax-exempt entity without council approval.
The sale was not brought to the Common Council for approval.
“The TIF agreement has been turned over to the city attorney to handle this and have them make good on what they signed,” Nell said. “It was agood agreement that protected you.”
At an earlier meeting, Nell said the loss in TIF revenue could cost the city $300,000 over the course of the payback term (four years).
Nell said MHDC has proposed paying about 50 percent of what the city’s tax rate would have provided in taxes, or about $20,000 per year.
Aster Retirement is located at 35 Anne St. and is the former Clintonville Hospital.
TIF districts are areas where municipalities invest in infrastructure, such as sewer and water, to attract development where it might not otherwise occur, or to make improvements, such as eliminating blight.
Whatever increase in tax revenue that results from development in those districts goes to paying back the debt the municipality incurred from making improvements to the district.
The district would have no effect on taxes unless improvements are made to a property that raise that property’s assessed value.