COLUMBIANA - A Columbiana family accusing a local attorney of presenting a proposed development to council as a facade were so angry Police Chief Tim Gladis called for backup after the Tuesday council meeting.
Rob and Bob Struharik and Bob's wife shouted and cursed at attorney Mark Hutson following the two-hour meeting in which he suggested using a TIF, or tax increment financing, for infrastructure improvements for the new development that would consist of a hotel geared toward workers in the oil and gas industry.
In a TIF the debt used to finance a project is paid using future tax revenue from the projected property value increase that would occur. TIFs can be used for streets, roads, sewer and water lift stations.
The Struhariks told Hutson they "couldn't believe" he would support such a plan, and that the "hotel" was not a hotel, but a "privately owned motel" with infrastructure supported by taxpayer dollars through the TIF.
They were also upset he described the TIF as a tax exemption, and claimed it was not an exemption, but a deferral. That claim was also supported by planning commission member Ron LaLonde.
"The way I have read with respect to TIFs is it is not a tax exemption, it is a tax deferment. That might be a minor point but I think it should be stated the way it really is," he said.
LaLonde was also upset the project had not yet come before the commission, but Councilman Dick McBane said it would later as the plan is only in the conceptual stages.
Hutson said he was not asking council to vote on a TIF at this point, although an agreement with the city would be required later.
Specifically, the TIF would fund the roughly $1.8 million needed for a new lift station and the required water and sewer lines at the former Lakefront Golf Course property, which is where the hotel would be constructed, and to surrounding areas, including west on state Route 14.
Hutson presented the project alongside Jeffrey Stoy and Summer Barker of Pittsburgh-based Architectural Design Solutions.
Stoy said the plan is to construct a hotel, office buildings, retail, medical and possibly a surgical center on the vacant 52-acre Lakefront property near South Avenue that is owned by Hempfield Partners of Pittsburgh. The development would extend to the mostly vacant 30 acres owned by Earl Corey on state Route 14 and later tie in commercial properties that run west along state Route 14.
The one-story, 88-bed hotel would be constructed on the west half of the Lakefront property, with parking on the surrounding half, he said.
"The hotel is based for the needs of the oil and gas industry. We are asking the city to get the proper sewer and water to the property. When we started this project we were under the impression we had water, electric and sewer, so we thought. We do not have enough sewer in this town to support this development," Stoy said.
According to Hutson, the undeveloped property along the north and south sides of state Route 14 near the intersection of Old 14 Road was annexed into the city several years ago and medical facilities were planned but the project was nixed when the stock market dipped.
A portion of the property is owned by Corey.
"You have approximately five lift stations that are outdated. The problem is the sewer system in this town is pushing from one lift station to the next lift station before it even gets to the sewer plant," Stoy said.
The plan is proposing the elimination of five of the city's existing lift stations that are outdated and replacing those with one lift station that would service the Lakefront development, including the Corey and surrounding property and along state Routes 14 and 46 for a total of 411 acres serviced.
According to Stoy, the city would only be responsible for providing the utility services and pointed out the project will be a benefit since it will add more water and sewer customers, which will help with the new water treatment plant project cost.
"With the city proposing a new water treatment plant and a way to pay for it, this would be a great start," he said.
The company anticipates the hotel alone will use about 12,000 gallons of water per day. The facility is already designed and out for bid, Stoy said.
"My preference for this over the sewer assessment is everybody is going to pay real estate tax," Hutson said of the TIF. "In this case the golf course is vacant and Mr. Corey's property is largely vacant. If you take property that is vacant and put an improvement on it, 10 years down the road the school district benefits."
He also said the benefit to the city is additional income tax and number of people and users of public utilities.
McBane said eliminating the existing lift stations would reduce the city's maintenance costs, and all on council supported the plan, which only further upset the Struhariks and LaLonde, who said they were "putting the cart before the horse."
"We are here simply mainly saying is this an idea the city would engage in. We have not done anything other than that. All the details still have to go before the planning commission," McBane said.
Council members did show some concern about the city being left on the hook like it was with the Firestone Farms development more than 10 years ago.
The city agreed to extend water and sewer service to that property along state Route 14 for potential housing developments but was left footing the bill when the developer defaulted on the loan.
In that case the city took out bonds, which it paid on until the last few years. The property was purchased and the debt repaid to the city and affected public school district in 2012.
"In theory, over the 10-year life of the TIF the entire cost of the public infrastructure improvement is paid," Hutson said. "If not, Mr. Blasdell (municipal attorney) will likely draft an agreement that provides that the developer/owner would be responsible for receiving any shortfall, so the risk of the city with the TIF is not the same as a lot of other methods of extension of public utilities," he said.
He also said the comparison was not the same since Firestone Farms was a residential development while this project is commercial.
"I think the persons behind this project are not about to default on anything. Can I assure you of that? I wish I could. Nobody thought that would happen with Firestone Farms but I guess when I look at this I think the funding is in place for the cost of this improvement," he added.
The TIF would not affect the public school district unless it chooses to participate and extend the TIF beyond 10 years and 75 percent, he said.
As president of the board of education he would not vote on the matter should the district get involved.
Council supported the conceptual site plan for the project.
"I am disgusted council would even approve a conceptual drawing and tax deferral for an 88-room man camp. It's a privately held man camp. It's a single story motel and according to our planning commission there is nothing standing in the way but a lift station," Rob Struharik said.
Chief Gladis requested an officer stand by in the parking lot of City Hall after the meeting to ensure the argument didn't escalate outside as the Struhariks continued shouting at Hutson.
On Wednesday Hutson provided a statement to the Journal in response to the situation.
"I as well as other presenters, Summer Barker and Jeff Stoy, are lifelong residents of the City of Columbiana. My children have been raised here and graduated from high school and none of us would ever be part of any endeavor to bring anything but quality development to the city," he said.
As for the tax exemption comment, he said the exemption would only be for a period of time, he explained.