MIAMI TWP., Montgomery County — Austin Landing workers who do not work in offices within the $150 million development may soon have to pay a 2.25 percent income tax.

Recently designated boundaries for a joint economic development exclude – at least for now – office buildings housing the Teradata headquarters and a growing list of tenants, including the developer, RG Properties. Also excluded from income taxation will be upper floors of buildings around the development’s town center, set aside as offices.

“The developer has agreed he will include hospitality, entertainment and retail (in the taxing district),” Assistant Administrator Greg Rogers said after the Miami Twp. trustees voted unanimously earlier this week to approve the boundaries.

So for now, workers at a recently opened Kohl’s department store, a Kroger supermarket expected to open before Christmas as well as employees of a hotel, cinema, restaurants and stores expected to open by August 2013 would pay the income tax. Construction workers in the district also would be subject to the tax, said Steve Stanley, executive director of the Montgomery County Transportation Improvement District.

“It’s obviously attractive to have office uses that are not subject to the tax,” Miami Twp. Administrator Greg Hanahan said, while referring subsequent questions about the buildings left outside the boundaries to RG President Randy Gunlock, who did not respond to requests for his perspective.

On Tuesday, Miami Twp. trustees designated the boundaries for the Austin Center Joint Economic Development District within the mixed-use Austin Landing development planned by the township and developer.

The setting of the boundaries is subject to approval by Springboro, Miamisburg and Montgomery County, the other partners in the district.

Part of development agreement

The setting of the boundaries concluded months of negotiations with RG, recently focused on whether Kohl’s would be included. The district boundaries also were set out in the phase II agreement, passed in November.

Together RG and the township are committed to $148 million in investment. RG has agreed to spend at least $124 million, including construction of 135 residences along streets — built by Miami Twp. and maintained through a contract with the developer.

Miami Twp. is committed to $24.3 million, including a $5.9 million park and ice rink on land leased from the RG and a $1 million bike and pedestrian path to the Great Miami River. RG also guaranteed the debt payments on the township’s Phase II improvements, in case tax incremental financing on building improvements within the development fail to cover the payments.

Developing the district

In the next two years, the development district boundaries are expected to change several times, perhaps after RG agrees to include office buildings, according to Steve Stanley, executive director of the Montgomery County Transportation Improvement District.

“The Phase II agreement leaves the door open for that to change,” Stanley said.

Inclusion in development districts can be imposed on business property owners, Stanley said. However, in all three districts already established in Montgomery County, boundaries have been created after businesses file petitions for inclusion, officials said.

Officials pointed out the taxes then can be used for maintenance of the districts, as well as other projects that improve the area. Hospitality, retail and entertainment businesses tend to be heavier users of the streets and other services in the district, Hanahan said.

Recouping investments

Once income taxes are collected, the township, Springboro and Miamisburg can begin recouping investments made to support the district during the early years.

To this point, the governments have contributed $170,000 – $90,032 by the township, $41,174 by Miamisburg and $38,794 by Springboro — with $112,000 still on hand, according to financial records.

First the governments are to be reimbursed. Then the development district’s expenses are to be covered by 0.5 percent of the income tax revenue in future years. Other tax revenue will be split — 57.2 percent to Miami Township, 22.3 percent to Miamisburg and 20.6 percent to Springboro.

There are no laws limiting use of these funds, officials said. Montgomery County is expected to recoup its investment through additional sales tax, officials said.

There are no revenue projections for the new district. According to financial records, a development district set up in 2009 around the Dayton Mall has collected $636,763 in income taxes, while one around the Dayton Wright Brothers Airport has collected $557,599.

The taxation at Austin Landing is to start following public hearings and passage of resolutions by the county, Springboro and Miamisburg. Dates haven’t been set yet for the public discussion about the creation of the district.

At first, the creation of the district only will affect construction workers or about the 150 Kohl’s full- or part-time employees within the district. Kohl’s officials declined to comment.

By Christmas, taxes from Kroger employees at the new store to be built at Austin Landing also should be going to the new district’s coffers.

“Kroger is aware of the prospects of this development district permitted by Ohio law and there are no foreseen impacts on recruiting. Pricing will not be impacted and Kroger will offer the same value to our customers found in all of our stores,” Rachael Betzler, public relations manager for Kroger, said in an email.

Varying tax implications

For workers, the tax implications will vary, depending on where they live and where they work, according to officials.

Except in development districts, those working and living in unincorporated areas, such as Miami Twp., pay no local income tax. The city of Beavercreek collects no income tax. While collecting 1.5 to 2.25 percent income tax, most cities in the Dayton area offer full reciprocity to residents who work in other municipalities. So workers in the Austin district would pay 2.25 percent there and nothing to municipalities where they live. Springboro, which taxes residents working locally 1.5 percent and collects an additional 0.5 percent from residents who work outside the city, is an exception.

Teradata moved from Dayton, first to another building in Miami Twp. south of Dayton Mall.

Benefits of the income tax break are offset by higher property taxes in the township, Teradata CEO Bruce Langos added.

“You’ve got to look at the whole enchilada,” Langos said. “You don’t get off the hook for taxes unless you live in Miami Twp. and work in Miami Twp.”

Langos predicted some Teradata employees would live in residences at Austin Landing — more to enjoy the restaurants, retail and entertainment options available within the village than for the income tax break.

The same tax break would be enjoyed by those working in areas outside the district’s tax boundaries and living in another unincorporated area, such as RG President Gunlock, a resident of nearby Clearcreek Twp.

By excluding the office buildings, Miami Twp. also helps the developer limit his financial risk in a difficult economy, Miamisburg City Manager Keith Johnson said.

“You do the best you can do to get as much property in there,” Johnson said.

Contact this reporter at (937) 225-2261 or lbudd@DaytonDailyNews.com.