The former Peters Cartridge Factory property has been annexed, despite opposition from the affected school district, enabling the developer to avoid property tax on improvements for the $25 million project.
Developer Bloomfield/Schon already figured to benefit from a $9.5 million bridge project, $7 million in state and federal historic tax credits, a $5 million environmental cleanup by U.S. EPA and a $491,000 reduction in tap-in fees from Warren County.
In a pre-annexation agreement with the developer, South Lebanon agreed to forgive - for 15 years - half of property taxes on improvements made to 14,200 square feet in commercial development and all property tax added through development of 130 loft-style apartments at the former ammunition factory property on Grandin Road.
“The Village of South Lebanon is pleased to join the partnership with Bloomfield/Schon and all of the public entities who have been a part of the redevelopment efforts of this site from the federal government on down,” Mayor Jim Smith said in a statement issued this week.
This was the second time a school district in Warren County has lost property tax as the result of annexation from Hamilton Twp.
In May, the Village of Maineville annexed the 160-unit, $22 million Hopkins Commons development, along Ohio 48 in Hamilton Twp.
Along with the annexation came a 10-year, 75-percent tax break, expected to cost the Little Miami Schools more than $800,000 a year, but bring in $279,000 in new money.
Hopkins Commons is expected to bring together senior citizens and others in the community at a restaurant and convention center operated by Warren County Community Services and students from Sinclair Community College.
The Peters Cartridge Factory redevelopment is expected to end problems with the vacant property, along the Little Miami River and multi-use trail.
“Without the contributions of the public entities, this project would not have been possible and the site would have continued to be a blight to the community,” the South Lebanon mayor said.
The South Lebanon annexation, approved on Sept. 21 by the village council, comes with formation of a community reinvestment area setting the terms of the tax break.
The school district objected in a statement issued this week.
“The district wants to partner and play a role in the economic development of the area, but it is important to the Kings Board of Education to look out for the financial health of the district and our taxpayers first,” the school district said in a statement issued on Sept. 27.
The school district said the annexation and tax break deal were negotiated after they proposed forgiveness of 75 percent of new property taxes on the 3.7-acre property after reassessment.
The district estimated this would have cost the district more than $140,000 a year, but generated $47,000 in new tax revenue a year over the course of the tax abatement.
Hamilton Twp. indicated the negotiations broke down when Warren County - which would have had to establish the tax-abatement zone for the township - insisted everyone agree on the terms of the tax abatement for the Peters Cartridge redevelopment.
“Hamilton Township has been fully committed to this project for years,” the township statement said.
The breakdown in negotiations was also related to the school district’s unwillingness to give up more than 75 percent of the new revenue, according to the township.
In supporting the project, township officials said they lobbied for the EPA cleanup and the county for the tap-in fee reductions.
In addition, Hamilton Twp. agreed to take ownership and accept any future liability for land behind the development where 40,000 tons of lead and contaminated soil from the former ammunition factory are buried, according to the statement.
“We are terribly disappointed. Hamilton Township has been slapped in the face. We strongly condemn the actions of Bloomfield-Schon and the Village of South Lebanon,” the township statement added.
Developer Ken Schon could not be reached.
On Thursday, school and South Lebanon officials were meeting over the dispute.
“We look forward to continuing the dialogue to an amicable conclusion,” Village Manager Jerry Haddix said.