Abatement & Taxing Authority Compensation

Abatement Guidelines

Projects involving the construction of new structures and the remodeling of existing structures, determined to be eligible for the Community Reinvestment Area (CRA) Program by the Sidney City Council, may be considered for 100% exemption from real property taxation for the following periods:

  1. Ten years for the remodeling of every residential dwelling unit containing not more than two family units and upon which the cost of remodeling is at least $5,000, as described in ORC Section 373567, and with such exemption being one hundred % (100%) for each of the ten years.
  2. Fifteen years for the new construction of every residential dwelling unit containing no more than two family units, and with such exemption being 100% for each of the fifteen years.
  3. Up to twelve years and up to 100% for the remodeling of existing commercial or industrial
    facilities, the term and percentage of which shall be negotiated on a case-by-case bases in advance of construction occurring.
  4. Up to fifteen years and up to 100% for the construction of commercial or industrial facilities, the term and percentage of which shall be negotiated on a case-by-case basis in advance of construction occurring.
  5. If remodeling qualifies for an exemption, during the period of exemption, the exempted percentage of the dollar amount of the increase in market value of the structure shall be exempt from real property taxation. If new construction qualifies for an exemption, during the period of the exemption the exempted percentage of the structure shall not be considered to be an improvement on the land on which it is located for the purpose of real property taxation.
  6. Apartment dwellings containing three or more family units will be considered commercial structures for the CRA program.

Taxing Authority Compensation for Abated Revenues

All property-taxing authorities in the City of Sidney have a stake in the promotion of a successful Community Reinvestment Area program. It is the policy of the City of Sidney to share with all property-taxing authorities income tax growth benefits the City may receive from projects that benefit from the application of the Community Reinvestment Area program.

The formula for distribution of income tax proceeds from CRA benefiting projects is as follows:

  1. The City agrees to deposit 75% of income tax collections that are specifically associated with any new business or incremental expansion of an existing business that has benefited from the granting of a Community Revitalization Area tax abatement into a trust account.
  2. Commencing from a point in time which is at least 12 months from the beginning of economic activity associated with a benefiting project and throughout the term of the Commercial Revitalization Area tax abatement, the City shall distribute to the Sidney City Schools and other tax authorities monies from the trust account on the following basis:
    1. The property taxes that would have been due on the benefiting real property had the abatement not been granted are calculated by the City Finance Officer. The calculation shall occur at the times of the year when real property tax payments would otherwise be paid. In determining the property tax receipts that would have otherwise been due, the City's Finance Officer shall use the property valuation prepared by the Shelby County Auditor and the tax millage rates that are in effect at the relevant time.
    2. The proceeds within the trust fund shall be distributed to all taxing authorities in the City of Sidney on a rationale of relative millage levied on real property in Sidney. This distribution, if suitable funds are available, shall occur in the second week of May. An example of the rationale for distribution of the proceeds is provided below:
      Type
      Mills
      Percentage for Distribution
      Edison State College2 mills 4
      Inside millage10 mills 20
      MRDD6 mills12
      Sidney City Schools30 mills 60
      Upper Valley Joint Vocational2 mills 
      Total50 mills100
    3. Any distribution from the trust fund would not exceed the amount the taxing authority would have otherwise received had the project proceeded without abatement. Excess proceeds shall be distributed to the City of Sidney. In the event that evidence indicates that income tax collections from an applicant are declining from the pre-abatement level for the subject property or benefiting business, the City shall meet with representatives from the various tax authorities to discuss a modification to the distribution formula. If agreement is reached on the modification to distribution by the various taxing authorities, the matter shall be forwarded onto the City Council for their resolution.
    4. In the event that the compensation received during the entire term of the abatement through this tax-sharing program is less than the amount the taxing authorities would have received had there been no abatement, then this distribution program shall continue for an additional year beyond the term of the tax abatement.