Should everyone pay property taxes?

(by Rachel Scofield, Staff Writer - May 14, 2009)

Bexley council members will vote on May 26 whether or not to charge property tax to residents of the new Bexley Gateway condominiums.

The council originally granted the condos a 50-percent property tax abatement, but the discount has not provided enough incentive to attract buyers during the economic downturn. Gateway developer Larry Ruben now seeks a 100 percent abatement for 15 years.

The condos, with prices starting in the $200,000-range, cater to empty-nesters who wish to sell their single-family homes, but remain in Bexley. Only five of the 36 units have sold, Ruben said.

In the long run, Bexley would benefit by keeping older residents, their income taxes and their estate taxes within the city, Ruben said. Additionally, "I see this as a very, very important matter for any future projects invited to Bexley.
"There is no reward or profit whatsoever for my family," Ruben said. "The fate (of the Gateway project) is now Bexley's to determine."

The properties that had previously occupied the land upon which the current Gateway project sits generated $18,000 in property taxes per year. Last year the property generated $200,000 in property taxes, Gateway attorney Leonard Carlson said.

"The issue is the future of Bexley," Councilman Mark Masser said. "I don't see this as a bailout. Larry is not making any money. This is a tool to make the project successful or it may not help at all, but in the long run we all benefit by giving the guy another chance."

Council member Rick Weber suggested the city compromise by granting a 75- or 80-percent abatement.

"I am very much in favor of giving an incentive," Weber said. "I think most people who live in the community would be thrilled by an 80-percent abatement when they have zero percent."

"My first choice is 100 percent," Masser said.

Resident Oded Shenkar spoke against the proposal.

"This is a pure and simple bailout," Shenkar said. "If the developer cannot sell the properties, then he needs to lower the prices. This would be a dangerous precedent and highly unfair."

But Ruben said if anyone is getting a bailout, it is Bexley.

"In the long run, the project won't be sold-out by the end of the abatement," he said. This is a very special project that we are asking (older residents) to pioneer.  The average Bexley home costs $165 per square foot and (our condos) cost $300 per square foot. We can't do any less. If we scale down we don't feel we will save enough money. A 50-percent abatement just isn't going to get us there."

Bexley resident and developer Emily Turner told the council if they granted the 100-percent abatement they would hurt the school district and it would open the door to other developers wanting the same benefit.

As a developer, "I would look at this and say 'you did it for this project' and whether my mine was bigger, better or more distressed, (my project should receive the abatement too)," Turner said.

Development Director Bruce Lagner said that developers are already approaching other central Ohio communities requesting the same abatement that Bexley is proposing.

"You would give away everything for 15 years," Turner said. "My son is in first grade. In 15 years he will hopefully be graduating from college. Fifteen years is a long time."

Lagner said the schools have been notified.

Emily also disagreed with Ruben's statement that the city would still collect income tax from the condo residents.

"Empty-nesters may not pay income tax," Turner said.

Emily's husband, Sean Turner, also spoke against the abatement.

He said someone who is considering the purchase of a $500,000 condo will not be deterred by $4,200 to $4,700 in property taxes.

"It will not make a difference whether they buy it or not," he said. "There is no benefit to city except to fill it up."

Resident Bob Duffy also spoke in protest.

"If a house with a 'For Sale' sign hasn't been sold, I'd assume the price is above the market," Duffy said. "It would benefit everyone with a sign in their yard to reduce their taxes 100 percent, but that would be down right ridiculous."

Masser told the Turners that they "brought up issues that haven't been discussed and were fairly new to me."

The finance committee will hold a special meeting at 5:30 p.m. May 26 to further discuss the matter before the council votes on the issue at 7 p.m.

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