Star City debates future of properties purchased through tax increment funds

STAR CITY— After purchasing properties on Boyers Avenue in 2012 through tax increment funds, Star City councilmembers must now decide whether the properties would best serve the town by being placed on the market.
Councilmember Dominick Claudio said in a phone interview  the properties on Boyers Avenue — block 4, lots 13-20 — used to have residential and commercial buildings before they were purchased through the Star City TIF project in 2012. The city tore down the buildings and made green space.
One property owner would not sell, and that building remains at the corner of Boyers and University Avenue.
“All of that property was bought through TIF funds,” he said.
Claudio said the city  discussed various ways to use the property, but because that hadn’t happened, the city needs to discuss whether selling the property is the best option.
“The best thing this has done so far is take out the blighted buildings,” he said. “The only thing it’s provided after the buildings has been that [Star City] sign. That’s the only value that has been added to TIF project because we had problems acquiring the corner property, and we had to leave it alone.
“The purpose of TIF is to add value to properties, either through sales tax or property tax, and [removing those buildings] has definitely helped property value. But where do we go from here is the next problem.”
At a recent council meeting, councilmember Emma Luzader said a meeting with the Monongalia County Commission  to discuss the sale of the property went well, but this sale would be new for both entities.
“This is the first TIF property sale, so it’s new for the county commission,” she said. “County commission doesn’t have anything to do with how we market the property. We are free to market it on our own or with a Realtor.
“The county commission has no stipulations regarding the use of the land by the purchaser. For example, whether or not it generates revenue or is used for green space. The use of the land is dictated by the town zoning regulations. If we are approved to sell the property, we can have the property appraisal paid for with TIF dollars.”
Luzader said the sale process and purchase must follow the West Virginia Ethics act and its conflict of interest standards.
She said she  received an email from Tom Aman, a TIF lawyer representing the county, that said the county commission must approve the purchaser, the sale price and the purpose for which the purchaser plans to use the property.
“A modification to the project plan to permit the sale must be approved and the dollars from the sale must be paid to the bond,” she said. “The amount owed as of Oct. 18 was $884,569.70.
She said Star City council would have to vote to consider marketing the property, and  compile a list of questions for the TIF attorney to present with the approved motion to the county commission. Then, there will be a meeting with the county commission and the attorney.
Luzader said Aman would prepare the town’s TIF project modification plan if the council decides to sell, and the West Virginia Development office in Charleston must approve the modified plan.
Councilmembers discussed whether green space was an acceptable use of the property or if the property should bring in revenue or B&O tax.
County Commission President Tom Bloom said there are no stipulations concerning the sale of a TIF property, but the commission will take into account TIF’s purpose when discussing whether a sale is appropriate.
“You can have a park or something there, but it’s going to be very difficult to say how that increases the value of the land,” he said.
Claudio said he hoped if sold, the property would go to a business that would help improve the town.
“From my perspective, a business that we look for the most is something with high foot traffic to bring in the rail trails, and that area of Star City with the riverfront and all of those things to the town,” he said.
“Green space doesn’t add a ton of value to the town. The way the TIF should work is its property tax that repays the bond, and the bonds are [currently] being repaid down there.”
City Recorder Bob Williams said the property would have parking needs for a commercial business.
Luzader said in some of the previous conceptual drawings for the property, parking was included.
Claudio said parking challenges may be able to be addressed under the TIF project.
“That’s not unique to us as far as parking is concerned,” he said. “Many of our once urbanized areas have parking issues, but how are they going to solve it? Part of the TIF fund is supposed to allow county funds to be into things like parking. So, if we had a good enough purchaser, we would figure out the parking issue.”
Claudio said the biggest challenge facing the property is how close it is to the road.  He said the original TIF project included three lanes going out of town, and currently, the road is not wide enough to accommodate the project.
Star City Police Chief Thomas Varndell said at the recent council meeting, the new lane is in the process of being approved by the state.
“The dotted line is not painted yet,” Varndell said. “The only thing we are waiting on is easement that has to be granted by the state that says we are giving that five feet of right-of-way to the state.”
Council  also discussed adding properties and amending the TIF project to add  appeal, but no action was taken.
Council expects to resume discussions on the TIF property at its   Dec. 18  meeting.