City Eyes TIF Cash For WJU Project
WHEELING – City Council will vote Tuesday whether to provide $300,000 in Tax Increment Financing money to help Wheeling Jesuit University move its physical therapy program into the Stone Center downtown.
The university plans to move about 100 physical therapy doctoral students and 25 faculty members into the Stone Center by this fall, and offer a free clinic for residents there. WJU officials believe the downtown location will help the clinic reach more people than the once-a-week physical therapy clinic offered on the college’s main campus.
The Regional Economic Development Partnership, which owns the Stone Center, is assisting WJU with financing for the approximately $3 million project. The city’s contribution will allow the university to defray startup costs associated with the free clinic, including outfitting exam rooms and purchasing expensive medical recordkeeping software that complies with federal privacy laws, according to the Rev. James Fleming, who will take over as WJU’s president on July 1.
“We are so blessed … we really couldn’t afford this without the city and RED,” said Fleming.
The $300,000 from TIF would be transferred to the city’s nonprofit development arm, the Ohio Valley Area Development Corp., which is operated by RED.
Council will vote on this and other matters – including an ordinance to send Mayor Andy McKenzie’s plan to enact a 0.5-percent municipal sales tax to the West Virginia Municipal Home Rule Board for approval – during its meeting at 5:30 p.m. Tuesday in council chambers on the first floor of the City-County Building. Council’s Finance Committee will meet at 5 p.m. in the same location.
City Manager Robert Herron believes Wheeling Jesuit’s expansion into the Stone Center has the potential to serve as a catalyst for downtown revitalization.
“This is what we think is a first-class project,” he said.
According to Herron, the city provided similar assistance to West Virginia Northern Community College years ago in the form of $150,000 for elevators at its 17th Street Education Center, though that was not a TIF project.
To date, the city has spent about $1.1 million of the revenue generated by a $3.1 million TIF bond sale in December 2011. Those expenses include $693,600 for demolition of buildings in the 1100 block of Main and Market streets, $265,000 for purchasing two of those building from Dr. Manny Velez and compensating him for moving his dental practice to Elm Grove and $140,000 for the purchase of the parking lot just north of the Century Equities building – property the city hopes to market for development, along with the 1100 block land.
TIF money set aside for specific projects but not yet spent includes $500,000 for renovations to Market Plaza, $400,000 for restoration of the 1100 block site, $300,000 for WJU’s Stone Center project and $200,000 for upgrades at the Capitol Theatre. That leaves approximately $600,000 for other development projects downtown, according to Herron.
TIF is a tool that allow cities to issue bonds for development projects with the expectation they will be repaid through additional revenue from future gains in property values, known as the city’s “increment,” within a specified district. Herron said city officials have been careful to base TIF spending on a known increment rather than hopeful speculation about development.
The city has 12 years to repay the 2011 bonds, and Herron noted Wheeling was able to repay its $715,000 TIF debt incurred to purchase the remainder of the 1100 block buildings a year early. Although the city’s ability to repay TIF debt depends on property tax revenue from within the eligible district, Herron said the banks which purchased the bonds – WesBanco, Main Street Bank, Progressive Bank and Chase Bank – assume all risk associated with those bonds.
“In West Virginia, TIF debt is not an obligation of the general fund,” Herron said.
Property values within the TIF district have increased from about $100 million in 2003 to about $153 million a decade later – about $13 million more than anticipated – and Herron said the city would have to see a significant crash in assessments to be in danger of not making its payments.
In other business, City Council will vote on a proposed zone change at 111 Park View Lane, from R-1B to Education, Medical and Office; a transfer of property on Glen Hollin Drive to the West Virginia Division of Highways; extending the city’s 1988 franchise agreement with American Electric Power; and several traffic rules.