Annexation fight begins: With one vote remaining, New Albany City Council hears other side of annexation story

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September 1, 2010

By DANIEL SUDDEATH Daniel.Suddeath@newsandtribune.com The News and Tribune Wed Sep 01, 2010, 03:45 AM EDT

NEW ALBANY — Now is not the time to constrain land owners with higher property taxes that could possibly force small businesses to close their doors, opponents of the proposed annexation of a predominately commercial corridor of Charlestown Road argued Tuesday.

On second reading, the New Albany City Council approved, by a 5 to 4 count, incorporating about 219 acres of land near the Interstate 265 interchange along Charlestown Road.

Realtors, attorneys and proprietors pleaded with the council to vote down the annexation during a public hearing before the ballot was taken.

The council still must pass an amended fiscal plan and the annexation on third reading Sept. 30 to keep the process on its current schedule that would see the property switch into the city’s possession Jan. 1 of 2013.

“It’s all about a four letter word ... jobs,” said local Realtor Pat Harrison.

“If we raise the taxes, these businesses will be gone — the jobs will be lost.”

Attorney Spencer Harmon represents two of the largest businesses in the proposed annexation area — Meijer and Great Escape 16 — and he said the corporations could see an increase of 49 percent in their property taxes if the proposal passes.

In addition to county levies the businesses already pay, the annexation would also require those establishments to pay city property taxes.

“Quite frankly we see no benefit at all from this annexation to any of the landowners out there,” he said.

Another point of contention raised was the debt New Albany would be responsible for if it annexes the land.

The Tribune reported Aug. 4 on the disputed total the city would owe the New Albany Township Fire Protection District if it takes the property proposed in the plan.

Floyd County officials put the district’s debt at about $2 million, and New Albany would be responsible for paying on the portion of that debt equivalent to the land it annexes.

An attorney and member of the New Chapel Fire Department — the agency that serves the district currently — said the city could be looking at a steep price tag for taking over its firehouse and portions of it coverage area.

The amount New Albany would have to pay was not placed into the original fiscal plan for the annexation passed in June. Deputy Mayor Carl Malysz said an exact figure was left out because the property tax bills had yet to be distributed when the plan was formed.

But he said the city is looking at taking less than 5 percent of the district’s coverage area, which would equate to a payment of about $16,000 a year.

That pales in comparison to the about $700,000 a year the city would receive in additional tax revenue by annexing the land, Malysz added.

“I do not see that as a material reason to not annex,” he said.

The district and Floyd County could have eliminated some of that debt obligation by agreeing to build a firehouse on property the city was willing to donate instead of insisting it be constructed a few hundred feet away outside New Albany city limits, Malysz said.

Officials at the county and city level knew New Albany would eventually seek the land, he said. Malysz added the entities formed a tax-increment financing zone, or TIF district, along the corridor to build infrastructure knowing the future plans of the city.

“Annexation was never some secret kept under a basket,” Malysz said.

As for the rise in property taxes for businesses, Malysz argued there are many successful establishments in the city limits that pay New Albany and county levies.

He said the council is supposed to represent the residents of New Albany that would benefit from the added revenue of the annexation.

Council members Diane McCartin-Benedetti, Kevin Zurschmiede, Dan Coffey and Steve Price voted against the annexation.

Zurschmiede said he needs firm numbers on what kind of impact the move would have on businesses in the area before he would support the plan.

Though it’s in the fringe area, Zurschmiede said New Albany residents work at those establishments.

“It may drive some of them out of business, frankly,” he said.

By law, the final reading on the annexation ordinance cannot be taken less than 30 days after the public hearing. But the public can still comment on the matter at the Sept. 30 meeting.

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Annexation fight begins: With one vote remaining, New Albany City Council hears other side of annexation story

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