Property tax abatement would be in effect for 8 years

 

If the Ninth Street development project comes to pass, it will mean more than an upscale hotel and a sit-down restaurant for Ironton.

It will also mean an influx of cash for several governmental agencies from a variety of taxes.

Current plans are to build a Holiday Inn Express and a Frisch’s Big Boy on approximately a four-and-a-half-block area from near Park Avenue to Adams Street and from U.S. 52 to Eighth and a Half Street. The initial phase of the complex would be the hotel and restaurant with possible retail stores and other restaurants to come later.

Funding for the almost $10 million project would come primarily from a partnership between the Lawrence Economic Development Corporation and private investors.

Right now plans have the hotel valued at $7.3 million and the restaurant at $2,150,000. That would translate to a taxable value for the hotel at $2,555,000 and the restaurant at $752,500.

If those appraisals hold, the hotel would bring in $104,827.39 in additional property tax that would be disbursed to the county’s general fund, the DD school district, Upper Township, Ironton City Schools, the City of Ironton and the vocational school.

The township would receive a total of $396.90 that would go solely to its general fund, even though Upper also has a levy to fund maintenance of its road and bridges and a fire levy.

“The township only gets general fund money because the residents of the city of Ironton are still part of the township,” Chief Deputy Auditor Chris Kline said. “The township isn’t responsible for roads and bridges inside the city limits. That is the city’s responsibility.”

Right now there is no city fire and EMS levy and also no money would go to the city or county health department, even though the county has a health department levy.

“The county health department doesn’t have jurisdiction inside the city limits and the city doesn’t have a health department levy,” Kline said.

If the restaurant appraisal remains at $2,150,000 that would mean $30,873 going to the same entities that would benefit from the hotel property tax.

However, there would be a tax abatement for the first eight years according to Ralph Kline of the Ironton-Lawrence Couty Community Action Organization. In other words, the only taxes to be paid would be on the land as it stands now. There wouldn’t any new revenue for that abatement period, even though there would be buildings on the property.

The city of Ironton would benefit exclusively from the two developments through an increase in income tax as developers anticipate a total of 61 full-time equivalent workers being hired. That figure could include full and part-time employees.

On top of the property tax the hotel would also bring in revenue from the hotel/motel tax, which is at the maximum of 6 percent tax of the fee charged to guests.

In 2012, the Comfort Suites in Chesapeake brought in $55,111.57. Of that 5 percent went to the county’s general fund to cover the costs of the auditor’s office handling the tax. One-sixth went to Fayette Township and the remainder to the Lawrence County Convention and Visitors Bureau.