By Linda Dillman
The city of Canal Winchester joined with Violet Township in a Joint Economic Development District for a DHL-owned parcel in the southwest corner of Basil Western and Amanda Northern roads.
Canal Winchester City Council approved the JEDD resolution during its June 19 meeting, but the action is a consolation prize of sorts after the city previously turned its back on a potential annexation into Canal Winchester by the developer.
Under the contract approved by council, the city collects all income tax revenue from the project and then distributes 87 percent back to the township, where the parcel is located. Canal Winchester keeps 10 percent and distributes the remaining three percent to RITA.
“The agreement DHL made with the county is that their payroll would be no less than $2 million,” said Canal Winchester Development Director Lucas Haire. “It’s really going to depend which tenant goes in there. It’s being built as a speculative DHL project. It depends on the client they get to locate there.”
Councilwoman Laurie Amick said the agreement felt like a win for the city, which is not providing roads or related improvements.
“We’re just collecting the taxes,” Councilwoman Jill Amos said.
However, Councilman Bob Clark reminded council that, while there are no negatives connected with the JEDD, the city lost out on more revenue than it will collect through the agreement.
“There was a big negative in that we lost a big opportunity on this project,” Clark said. “We were told it was going to be built in Violet Township (instead of Canal Winchester). It cost us millions and millions of dollars over the next five, 10, 15 years from now. That’s what is a shame. I just hope we learn from this that in economic development, you gotta be fast on your feet. You gotta be ready. You gotta be welcoming or they’re going to go the path of least resistance and they did with this one and we lost millions of dollars.”
According to Canal Winchester Law Director Thaddeus Boggs, a JEDD is a legal entity created by an agreement between municipalities and townships that is used for economic development purposes.
The contract includes an economic development plan and one of the tools the JEDD uses to fund the plan is to levy an income tax on businesses and employees within the JEDD district boundaries.
“In the case of the contract before you, the income tax would be levied at the rate of two percent, which is equal to Canal Winchester’s income tax,” Boggs said.