Thousands of dollars in property tax revenue that normally would go to Kent City Schools, the city of Kent and Portage County has been or will be taken off the table by Kent State University's Esplanade extension.
In the past five years, Kent State bought 41 properties bought from private entities to build the pedestrian path that will link downtown to the campus. Those properties, about 7.3 acres total west of campus, will become tax exempt under Kent State's ownership as a state entity.
That means the more than $97,000 in total annual taxes the properties would have contributed will no longer be paid once all the parcels are approved for tax exempt status by state officials.
Debbie Krutz, treasurer for Kent City Schools, said the school district receives about 73 percent of the property tax revenue paid per parcel in the school district.
Based on their latest valuations, the properties bought so far for the Esplanade contributed a total $97,783 in annual property taxes, according to the Portage County Auditor's Office.
Krutz anticipates a total loss of about $71,000, or about 73 percent of that $97,783, once all the Esplanade properties are given tax exempt status by the state.
"Any loss in property taxes is a concern for us," Krutz said.
Esplanade supports redevelopment
The city stands to lose $5,238 in annual property tax revenue once the land becomes tax exempt. And the county will lose $2,494 annually, according to the auditor's office.
Gregg Floyd, vice president for finance and administration at Kent State, said without the Esplanade linking downtown to the campus some of the redevelopment projects might not have come to fruition.
"The fundamental answer is, there are so many public benefits that are being driven by this," Floyd said. "It was critical in doing this that we kept every (redevelopment) partner."
The Esplanade is the on-campus section of The Portage Hike and Bike Trail, a pedestrian path managed by the Portage Park District with segments in Ravenna, Kent and Franklin Township.
The Esplanade starts near Dix Stadium, picks up The Portage and weaves through campus. Right now, the Esplanade ends near Franklin Hall and the Kent State Fashion Museum on campus.
By this time next year it will have been extended west from the fashion museum to its new terminus at Haymaker Parkway. Across the street stand PARTA's Kent Central Gateway transit center and parking garage and the new Kent State University Hotel and Conference Center — both of which are under construction now.
Kent City Manager Dave Ruller talked about the Esplanade as itself being a signature element of Kent's redevelopment in his speech during the Fall 2011 Bowman Breakfast.
"Think of the Esplanade extension as a Kent version of old Route 66 and the Appalachian Trail — opening up a whole new town gown frontier by physically reconnecting Kent’s commercial district with Kent’s largest group of customers in a park-like setting that is full of its own surprises and amenities," Ruller said.
Floyd said some retail tenants in the new Davey Tree and AMETEK buildings were unwilling to sign leases in the project unless the new hotel was included, and parking for the new hotel depends largely on the transit center, which received a $20 million federal transportation grant due in part to all the projects planned around it.
"On the public benefits side, it’s going to be a much bigger gain because of all these projects coming together," he said.
Project cost, opening date
To date, Kent State has spent more than $8.9 million buying land for the Esplanade.
The university's board of trustees approved spending an additional $3.28 million on the actual construction of the wide pedestrian path.
The project may eventually incorporate public art work similar to the sculptures that adorn the Esplanade on campus.
A new building for the Kent State College of Architecture and Environmental Design will stand on the new segment of the Esplanade near South Willow Street.
The new section of the Esplanade linking campus to downtown is set to open in spring of 2013.
Big picture improvements
The school district understands the big picture, Krutz said.
That's why the district agreed to sign a Tax Increment Financing agreement with the city in 2010 in order to stimulate redevelopment of the block that is now home to Davey Tree and AMETEK.
The TIF identifies property in the downtown redevelopment block and stipulates that the land and improvements will be 100 percent tax exempt for up to 30 years. In exchange for the tax exemption, which was used to entice developer Fairmount Properties to build on the land, the city will make annual payments to the school district based on the valuations of the finished redevelopment.
"Just like the property that was yielding $39,000 in the block downtown, we’re no longer getting that right now, but instead we’re going to start getting TIF payments," Krutz said.
She described the TIF agreement and lost tax revenue via the Esplanade properties as investments by the school district to play its part in redeveloping downtown.
"It’s win-win for the school district and the community because it does net out additional revenue for the school district in that redeveloped block of downtown, and of course it redevelops our community with a vibrant downtown area," Krutz said.
You can read the entire TIF agreement, which is attached to this article, for more details.