SHARON-Property tax breaks to lure a $179 million ethanol plant into the village received preliminary approval Thursday night.
The village plan commission gave the first of three approvals necessary to create at tax incremental finance district for the proposed ethanol plant.
The commission voted 5-1 following a brief public hearing. The tax district still needs approval from the village board and a special joint review board.
The new tax district would cover 518 acres of recently annexed land on the village's west side along Highway 67.
Money from the increasing property taxes in the district would go toward infrastructure improvements to support the ethanol plant and other industry that might locate in the area, village attorney Brian Schuk said.
"We're thinking this is going to help the village and community as a whole bring in future development," he said. "It will lower the tax burden in the future by bringing in more development."
The improvements will cost $9 million to $11 million and include possible land acquisition, water and sewer line extensions, well improvements, natural gas line extension, installation of a railroad loop, electrical system upgrades and upgraded fire equipment that could include a new truck, said Phil Cosson, executive vice president at Ehlers and Associates, the village's financial planner.
Equalized property value in the tax district would start at $1.1 million but go to more than $70 million when the ethanol plant is complete. Equipment and machinery in the plant can't be included in the property value. The new value will go onto the tax rolls after improvements are paid off and the tax district is closed.
Village President Charles Dorn said that without the tax district, Global Renewable might build somewhere else.
"You need to do something to attract businesses now-a-days," Dorn said. "A lot of people are against TIFs. But if you're not going to have them, a lot of that value could go to other states."
Global Renewable hopes to break ground in July or August and open the $179 million plant in late 2008 or early 2009. It expects to employ 50 to 55, produce 110 million gallons of ethanol and make 365,000 tons of dried distillers grains annually.
How does a TIF work?
After a tax incremental finance district is defined, the existing assessed values and taxes are set as a baseline. Any increase in property values within the district resulting from new construction, expansion or renovation results in an "incremental" increase in taxes above the baseline. All or part of the increase is used to pay for infrastructure improvements in the district.
