Businesses fight New Albany’s annexation

How they voted

• The council approved the annexation on second reading Tuesday.
Voting in favor were:
John Gonder, Bob Caesar, Pat McLaughlin, Jack Messer and Jeff Gahan.
Voting against were:
Dan Coffey, Steve Price, Diane McCartin-Benedetti and Kevin Zurschmiede.

Related Photos

Meijer is the largest retailer located within the proposed annexation area along Charlestown Road in New Albany. Staff photo by Kevin McGloshen
Great Escape movie theater is located within the proposed annexation area along Charlestown Road in New Albany. Staff photo by Kevin McGloshen
Annexation Map Staff photo by Kevin McGloshen

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September 5, 2010

Tenants say move could force job cuts

By DANIEL SUDDEATH Daniel.Suddeath@newsandtribune.com The News and Tribune Sun Sep 05, 2010, 06:03 AM EDT

NEW ALBANY — Some also unhappy with lack of notification

An increase in property taxes caused by the annexation of the Charlestown Road commercial corridor could result in businesses in the area cutting jobs, said tenants that would be impacted by the move.

Though by law the city only had to notify property owners of the pending annexation, some renters felt like more could have been done to notify all parties involved prior to the New Albany City Council having a public hearing on the matter Tuesday.

“There was not a lot of notice — it’s almost like they were trying to sneak it through,” said Ralph Cole, who owns the franchise rights for the Jimmy Johns locations in Floyd and Clark counties, including the Charlestown Crossing Way establishment.

The rise in property taxes from having to pay county and city levies — estimated to be an increase of 49 percent, said a lawyer representing Meijer and Great Escape 16 — could put the corridor at a competitive disadvantage, Cole said.

With Veterans Parkway continuing to grow and other locations in Clark County touting higher traffic counts than Charlestown Road, Cole said one of the big draws to the fringe area was the lower property taxes.

“That’s going to make a lot of people second guess whether they go to Floyd County and the Charlestown Road area to start a new business or expand,” he said.

The two local locations employ about 45 people — a number that could be reduced to meet profit margins if the annexation is passed — Cole said.

But the city is not responsible for making landlords notify their tenants of annexation, Deputy Mayor Carl Malysz said during Tuesday’s sometimes heated public hearing and subsequent council vote.

Also, the city can increase its general fund base by about $700,000 a year through the annexation, Malysz said. New Albany has struggled during the past seven years to keep its services funded, as it’s looking at a $1.8 million budget shortfall this year due to public safety expenses.

The council approved the annexation that would take effect in 2012 on second reading, and will have a final ballot on the measure Sept. 30. The public will still be allowed to comment on the measure at that meeting.

Malysz contended that the plan has always been for the city to annex the corridor, as the county combined with New Albany to form a tax-increment financing district there to foot infrastructure upgrades including sewer lines.

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

The contiguous boundary to the city can be confusing. Even Jimmy John’s company website lists the Charlestown Crossing establishment as located in New Albany.

But Cole — who said he’s been considering opening a drive-thru Jimmy John’s along State Street in the former Wesley Chapel United Methodist Church — isn’t the only business leader complaining about the impact of the possible annexation.

Angie Bowser just moved her business, Click Portrait Studio, to 3773 Professional Court. She rents the spot, and said the increase in property taxes will likely feed down to her if the annexation is approved.

She described her knowledge of the proposal as minimal, and added she likely would have chosen a different location to move to if she knew the annexation was pending.

“I have not been educated about this at all,” Bowser said. “I mean a 49 percent tax increase could have an incredible impact” on her store.

Malysz said that with one of the lowest property tax rates among second class cities in the state, multiple stores are thriving in New Albany paying the city and county levies.

But Councilman Dan Coffey — who voted against the annexation — argued the city is higher on other fees such as sewer charges compared to other municipalities. He also contended New Albany’s services such as police and fire will be strained by having to cover the new territory despite letters from department heads suggesting they can adapt without a problem.

“I know this is not good for the city,” he said.

Councilman Bob Caesar voted in favor of the annexation but conceded the body will have to investigate the financial repercussions though the businesses that would be impacted are technically not represented by the council.

“The economy is an issue — how is this going to impact those small businesses out there,” he said.

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