April 11, 2008

School Board Members to Serve on Committee around Financing for Uptown Worthington

Malvern, PA – At the Great Valley School Board meeting in March, representatives from O'Neill Properties Group made a presentation to the Great Valley School Board about the development of Uptown Worthington, a shopping/entertainment/residential development along Rts. 202 and 29. The developers also made a request that the School Board appoint representatives to a committee that also includes County and Township officials. The purpose of the committee is to discuss a possible financing structure designed to expedite development. Called a Tax Increment Finance Bond (TIF), the financing option allows funds for infrastructure development to be borrowed through the Chester County Industrial Development Authority (CCIDA). CCIDA is able to secure money at lower costs to governmental organizations. Essentially, the three government entities (the school district, the township, and the county) would borrow the development money on behalf of the O'Neill Group who would pay back the debt to those entities through the yearly collection of real estate taxes. In the case of the O'Neill development, the annual real estate payable to the Great Valley School District is approximately $4 million. From that collection, the district would use approximately $1 million a year (for 20 years) to pay back the debt to CCIDA. 

"TIF is a most popular financing option in areas where development is not likely or where there are severe environmental issues," said School Business Administrator Charles Linderman. "A TIF enables development in those areas to happen faster because the developer is able to secure less expensive financing; therefore requiring less capital to begin the project."

According to Linderman, TIF serves as an incentive to expedite economic growth, most often in a blighted area. The option allows government entities to begin collecting real estate taxes from the new development sooner. In return, the taxing entities in this case would forgive approximately $20 million in taxes over the life of the 20-year financing term. None of the government entities involved have made any decision about their participation in the TIF to date.

"The School Board listened to a public presentation from the developer in March," said School Board President Elizabeth McGarrigle. "To date, we have simply accepted an invitation to send representatives to serve on a committee that will examine the TIF more closely."

Eugene Kozik, Nick Vastardis, and Kevin McTear will represent the Great Valley School Board on the committee and will report back to the entire School Board.

"Our Board members will participate in a process that simply explores potential benefits for each party involved," said McGarrigle. "Their participation in no way implies that we are ready to support the option before us."

While the committee meetings to discuss the TIF are not open to the public, the process does require a public hearing. That hearing will be open to all members of the Great Valley community.

"While the public hearing is not one that is organized by the district, we will use our web site (www.gvsd.org) and cable access channel (GVTV Comcast Channel 14) to share information with our community," McGarrigle said.

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