Community Reinvestment Area (CRA):
A CRA lets cities exempt the value of new construction from property taxes to attract investment. The exemption applies to the building value, not the land, and lasts up to 15 years.
Tax Increment Financing (TIF):
A TIF doesn’t remove taxes—it redirects them. When new buildings raise a property’s value, the owner pays service payments in lieu of taxes equal to what the property-tax bill would have been.
Those payments go into a TIF Fund that the City controls, and can be used for public infrastructure (roads, water, sewer, storm drainage, etc.) or, under Ohio law, to reimburse the developer for eligible public-infrastructure costs.
In 1994, Ohio changed its CRA law to limit exemptions and require school-board approval.
Piqua’s CRA #3, established in 1992, predates that change. Under the old statute:
• It can grant a 100% exemption for 15 years on all new building value.
• It does not require school-board consent.
• It can be paired with a TIF, but the CRA takes priority under R.C. 5709.911, so the TIF does not begin until the CRA ends.
• This combination allows 15 years of tax exemption followed by 15 years of TIF, extending the incentive period to 30 years.
Supporters say:
This structure makes Piqua competitive with larger regions that can offer big incentives. It attracts investment without requiring public borrowing.
Critics say:
Because it’s a pre-1994 CRA, it sidesteps today’s transparency and school-approval rules. Schools lose their normal tax relationship to the property for 30 years, and citizens didn’t have a formal say in the terms.
Highlights
• Each building completed under the project is fully exempt from property taxes for 15 years.
• The TIF exists legally but is “subordinate to any real property tax abatement … provided under R.C. Chapter 3735, including … the CRA Exemption.” (TIF Ordinance §1)
• Within 90 days of the agreement, the company deposits up to $75 million into a jointly controlled escrow account for design and construction of public infrastructure:
“Within ninety (90) days of execution … the Parties shall establish an escrow account … Customer shall deposit funds into the Escrow Account for the estimated design and construction costs.” (Water & Wastewater Addendum 1)
• The City draws from this escrow to pay contractors. No bonds or borrowing are issued.
• The Development Agreement PILOT begins:
“In tax years 1 through 5 … seven hundred and thirty-five thousand dollars ($735,000) per Building that satisfies the PILOT Building Trigger.” (§4.3(A)(i))
These are per-building annual payments to the City’s General Fund.
• The company also begins direct payments to the Piqua City Schools and Upper Valley Career Center:
“It is the intention … to pay to the Piqua City School District and Upper Valley Career Center … compensation payments … in the amount of the taxes that would have been payable … but for this Commission’s authorization of this Ordinance.” (Ordinance O-18-25)
These are made directly by the company, not by the City or the TIF.
• The City also begins earning normal utility-service revenue once connections are active.
Supporters say:
• The City avoids debt. Instead of borrowing to build utilities and roads, the company funds them in cash.
• Taxpayers are insulated from financial risk: the City draws from an escrow funded entirely by the developer.
• Schools receive payments from day one, even though the property is tax-exempt.
Critics say:
• The school payments are private contractual obligations, not collected or published by the county auditor. There’s no public ledger showing whether they equal what the schools would earn under full taxation.
• Because payments go directly to the districts, the amounts are not reflected on the public tax rolls, making them effectively invisible to the public and to the county’s accounting of school revenue.
• The City is receiving fixed PILOT amounts per building, but the actual taxable value of the data-center improvements could be far higher, meaning the PILOT might represent only a small fraction of what normal property taxes would be.
Highlights
• The CRA’s 100% exemption continues; the TIF still cannot collect payments.
• The developer’s escrow funds continue to pay for infrastructure.
• The City begins certifying the total cost of those projects so they can be reimbursed later from TIF revenues.
• The company’s PILOT payment schedule steps up:
“In tax years 6 through 20 … the greater of $735,000 per Building or $1,470,000 aggregate, plus CPI (not to exceed 3%) and $1.80 per square foot for any Building over 350,000 square feet.” (§4.3(A)(ii))
• The schools continue receiving their separate direct payments.
Supporters say:
• The City gains ownership of modern water, sewer, and roadway infrastructure with no municipal borrowing.
• The company carries the cash flow risk; if costs exceed estimates, the City’s exposure remains limited.
• The PILOT and school payments create predictable annual revenue streams.
Critics say:
• For 15 years, no normal property-tax revenue reaches any public entity—only contract payments. That removes the project from the same funding formula that supports every other business and homeowner.
• Because the CRA period overlaps with depreciation and growth in the rest of the city, the schools’ compensation payments may not track inflation or rising costs. Without being tied to assessed value, they could effectively decline in real terms.
• Residents and even the county auditor cannot easily verify compliance because CRA-based exemptions and private contracts operate outside the county tax duplicate.
Highlights
• When the CRA exemption expires after Year 15, the TIF takes effect for the remaining 15 years.
• The company begins paying service payments in lieu of taxes equal to the full property-tax amount that would otherwise be due:
“Each service payment … will be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged … if this Commission had not authorized the TIF Exemption.” (TIF Agreement §2)
• Those payments are collected by the county treasurer and placed in the City’s TIF Fund.
• The City must use them according to §5 of the TIF Agreement:
“The City shall use the Service Payments … (i) up to fifty percent (50%) to reimburse the Company for the cost … of the Public Infrastructure Improvements … and (ii) up to fifty percent (50%) … for City public infrastructure improvements.”
• The City reimburses the developer until its certified costs (up to about $75 million) are repaid. The other half stays in the TIF Fund for public projects.
• The company continues paying the school-compensation amounts directly; none of the TIF revenue goes to schools.
• The Development-Agreement PILOT continues through Year 20, then reverts to $735 000 per building (§4.3(A)(iii)).
Supporters say:
• The TIF creates a self-funding loop: only successful development generates the revenue used to reimburse the developer. If the project underperforms, reimbursements shrink.
• The City permanently owns all the infrastructure that was privately funded.
• Because 50% of TIF revenue stays with the City, it can fund future road, utility, or safety improvements in the same area without raising taxes.
Critics say:
• Half of all property-tax-equivalent revenue for 15 more years is redirected to reimburse the developer, rather than supporting schools, or the city/county.
• The agreements do not cap the total years of reimbursement—only that up to 50% of annual service payments may be used—so the payback period depends entirely on future valuation, which the public cannot see until audits are filed years later.
• Schools remain outside the normal tax rolls for three decades, which matters because the state’s school-funding formula assumes local property value. With no taxable value recorded, the districts could appear poorer on paper and distort state-aid calculations (also seen as a positive locally)
• Because the TIF Fund is controlled by the City administration and not the county auditor, there is limited public reporting of annual inflows, outflows, and reimbursement balances unless the City voluntarily discloses them.