Council approves tax abatement

WORTHINGTON —The Worthington City Council cast the first vote in favor of a downtown Sterling Drug on Monday, approving its share of a tax abatement plan requested by Astrup Drug Inc.

Astrup has requested tax abatement of 15 years or $80,000, whichever comes first, for property it intends to develop at 507 and 515 10th St. The city, county and school district are each expected to abate a portion of taxes collected, but the county and district have not yet voted.

No one addressed the council during a public hearing before the vote, and council opinion was split, with Alderman Lyle Ten Haken registering the lone vote against the proposal.

“Our current tax abatement guidelines are at 10 years. ... It seems to me we would be overstepping our bounds here if we go up to 15 years,” Ten Haken said.

A vast majority of the city’s tax abatement projects have been for 10-year terms, though Director of Community and Economic Development Brad Chapulis said a 2007 amendment allows the council to abate taxes for up to 15 years.

The city’s portion is expected to be about $27,500 during the 15-year term, “that’s assuming zero change in property valuation and zero change in the tax levy,” Chapulis explained.

Abatement works by stabilizing the devaluation of the property in question and putting the difference in taxes monies collected toward eligible redevelopment costs. In this case, the funds will go toward Astrup’s demolition and redevelopment costs, which are estimated at about $151,000.

In other business, the council on Monday:

- Accepted the city’s 2009 audit report.

- Approved changes to the Worthington Fire Department Relief Association Board of Trustees’ articles of incorporation and bylaws. Active membership in the relief association will now coincide with active membership on the fire department, the lump sum pension amount has been converted to an amount calculated per year of service, and the ex-officio members on the board of trustees will now include the fire chief, one elected official of the city and one elector or appointed official of the city.

- Gave a first reading to the Economic Development Authority’s request for its land southwest of the 27th Street-U.S.59 intersection to be rezoned for general business use.

- Approved moving the beer garden for the Regatta Windsurfing and Unvarnished Music Festival to the area near the entertainment stage; the children’s activities area will be in the garden’s former location.

- Reviewed the proposed special services charge for street lighting; agreed to set a public hearing on the issue at a yet-to-be-determined date.

Tags: city council, sterling drug, news, worthington, abatement, project, tax