City Manager wants $140,000, but only $12,000 May be Needed at Reserves of Loveland
Loveland Already Has $80,000 to fix $12,000 Problem
When Mark Bradley Zaring and Robert Krohngold abandoned the twenty-two home, Reserves of Loveland subdivision before all the public improvements were completed, they left behind more than enough money for the City of Loveland to do the work - with money left over.
Loveland Magazine has completed a review of more than 168 pages of documents and blueprints obtained through a request to the Loveland Building Department using the Ohio Open Records law. The documents show that all that remains to be completed at the subdivision is a final one-inch layer of asphalt on the subdivision’s streets. The estimated cost according to the City Engineer for the final asphalt layer is $9,920. The figure goes to $12,058 after adding a four-year inflation rate of 5%.
However, Loveland City Manager Tom Carroll persists in pushing through a Tax
Increment Financing (TIF) District scheme whereby $140,000 of property taxes that would normally go to the Loveland City School District, The Great Oaks Vocational District, the Clermont County Board of Developmental Disabilities (MRDD) and other taxing entities would be diverted into a City fund that Carroll will use for unnecessary expenditures in the subdivision of $500,000 homes. Carroll’s original estimate of the dollar amount needed was $115,000, but on July 8 he issued new calculations that bring the figure to $139,783. Every taxpayer in the Loveland City School District, which includes residents of Warren, and Hamilton Counties, and every taxpayer in Clermont County from, Moscow to Chilo will have tax money diverted into the Loveland fund.
Entanglement and Mudding
Carroll devised the plan after telling City Council that the developers had left town, leaving City taxpayers holding the bag because the Letter of Credit (LOC) the developers had given the City to cover the remaining work, expired. The review of the Development Department documents shows that this never happened, and Fifth Third Bank who issued the Letter of Credit on behalf of Zaring and Krohngold, now will pay the City the $67,000 face value of the LOC, plus $8,000 for inflation factors. Fifth Third says the total amount they will now pay is, $75,000. Carroll says that the Bank is doing this only because of their generosity, and wants to reward them by building a picnic shelter in Nisbet Park with the money - instead of using the money for the remaining public improvements at the Reserves. In a settlement agreement Carroll signed with the Bank, the City will put a plaque on the shelter honoring the Bank’s benevolence. This entanglement and mudding of the issue have unnecessarily complicated discussions and infuriated school officials, because if the Fifth Third money is used for a purpose other than the subdivision’s infrastructure, the result is that even more money can be diverted that under normal circumstances would go to educating the community’s children.
City Already has Enough Money in Hand
Add to the $75,000, another $5,000 the City already has in its coffers from an unused “Nuisance Bond” Zaring and Krohngold gave the City in 2005, and the total the City
has at its disposal to use at the Reserves is $80,000. Cash on hand so to speak, all without adding any more by making the subdivision a TIF District. The $5,000 has been earning interest for the City since 2005.
A review of the public records shows that there is only the $9,920 worth of work remaining to be done - the one-inch layer of asphalt on the roads. The City has calculated that an additional $14,350 may be needed to maintain erosion controls already installed at the site, and possible repairs if any of the existing sidewalks or curbs need repair while construction continues. In summary: $9,920 of known work, and $14,350 of possible but unlikely work equals $24,270. A four-year inflation factor of 5% per/year brings the cost to no more than $29,500. Given that the City already has $80,000 to spend, they will have at least $50,500 profit.
Taxpayers to Improve Building Lots Now Owned by Fifth Third Bank
Remaining sticking points is that Carroll wants to collect $55,417 for “Seeding” Fifth Third’s building lots and he also says that 1,300 feet of sidewalk needs to be installed across the vacant lots. He says he needs $26,000 for the sidewalks. These figures will increase by 5% per-year using Carroll’s inflation factor; $67,360 and $31,603 respectfully.
In an interview with two local and well respected Loveland area developers, it is learned that after a developer installs sewers, water lines, and other utilities in the streets, they run taps far inside each individual home lot. The builder will eventually use these taps to connect the utilities to the individual homes. Then, the developer puts an initial layer of asphalt on the street and installs storm gutters at the edge. The developer also installs erosion controls such as silt fences and seeds bare soil to prevent the disturbed dirt from entering local streams. The only sidewalks a developer ever installs are those that extend in front of public areas where no homes will later be built. The developer never installs the sidewalks in front of individual vacant home lots. These sidewalks are one of the last items installed on individual building lots, and they are the responsibility of the individual home builder and buyer. After the sidewalks are in, the lawns are seeded or sod is laid along with the other landscaping the home buyer has purchased. The developers interviewed by Loveland Magazine said that the sidewalks are always one of the last items “installed by the builder” because to do otherwise would be foolish - they would be destroyed by the heavy equipment used while building the home. The builder will also never have to dig into the curb or the streets to access utilities, because everything they need are already in the front lawn of the new home.
Driving through the subdivision, one can see that they have also already installed the sidewalks promised in the development plan approved by Loveland’s Planning and Zoning Commission. Eva Parker, who serves as secretary to the Commission and is the Building Departments, Assistant Administrator, said that no separate landscape plan was submitted or approved. Therefore, Zaring and Krohngold did everything ever promised, or were required to do to complete the subdivision except the final layer of asphalt. Even that final layer would not yet be installed, because as in every other uncompleted subdivision in Loveland, the final layer of asphalt has not been laid, and won’t be - until most of the homes have been built.
In a letter to former Assistant City Manager, Jeff Wright, in January of 2007, Krohngold said, “I have completed the development of this subdivision. The builder will build the sidewalks as he completes homes. This is the only item remaining.” Krohngold was requesting that the $5,000 Nuisance Bond is returned. Wright apparently agreed that everything was completed, only saying in a fax reply to Krohngold eight days later that the money could not yet be released because it must be held for one year after the subdivision was complete.
Nowhere in any document provided by the Building Department did Zaring and Kronhgold ever agree to install sidewalks along the frontage of home sites. Nor did they promise, or were they required to do, any seeding except for the initial erosion control. If they were required to install these sidewalks and final seeding, it would have to be in the City “Engineer’s Estimate” of the cost of the public improvements required for the subdivision. The total of the estimate when the subdivision started was $604,039, and the amount was reduced each time the developer completed major work. Whenever the developers completed work, they sent a letter to the City requesting the LOC be reduced. These many requests then went to the City Engineer for approval, the Development Director for approval, the Planning and Zoning Commission for approval, the City Manager for approval, and finally a vote of City Council. Sidewalks and final seeding are not line items in any of the documents approved by these individuals and public bodies.
In a memo dated December 19, 2005, then City Engineer Chad Ingle said the bond could be reduced because the erosion and sediment control had been installed. A few days later on January 24, 2006, Carroll wrote to City Council saying the erosion controls were installed. He says in the same memo, “The remaining items to be completed are sidewalks and landscaping,” However, the sidewalks and landscaping at the entrance to the subdivision and at a small common area, are now complete.
Where'd the Sidewalk Line Item Come From
The first time the sidewalk requirement is seen in the city documents as a line item is after Zaring and Krohngold walked away - and about the same time that Carroll began his quest to fix things for the new residents of the Reserves of Loveland, and began negotiating with Fifth Third Bank. It was then he directed the new City Engineer, Cindy Klopfenstein to prepare a new “Engineer’s Estimate” - that is when these new line items appeared for the first time.
There is no reason to do additional seeding on vacant subdivision lots, and it would be highly unusual. Visiting other Loveland subdivisions that are still under construction and not completely built out, reveals that no vacant unsold lots have any vegetation growing other than natural weed growth and original grasses sowed for erosion control. The unsold lots at the Reserves look no better or no worse than lots that have been vacant in some subdivisions for ten years. The appearance of the lots 
is only distinguished by how often they are bush-hogged.
None of the existing, unfinished subdivisions in Loveland, including White Pillars, Bares Creek, Sentry Hill, Sugar Tree Estates, The Sanctuary, and Butterworth Glen, have “seeded" lots, or sidewalks where no homes have yet been constructed. If only one home exists on a street, it is the only one with a seeded lot, and it has a sidewalk that abruptly ends at each end of the property line.
Shoot Now - Ask Questions Later
On July 13, during a public hearing about the TIF, Loveland resident and School District Treasurer and Chief Financial Officer Brett Griffith said, “City Council seems to be jumping in blind with no credible projections of cost.” He called the TIFF scheme a “money grab” to bail out private developers. “It seems like the sentiment for this TIF is shoot now and ask questions later,” he said. Griffin then asked Carroll about the $55,000 line item for seeding, “Why would you even seed vacant lots?”
Carroll didn’t deny that he intends to seed the 15 vacant lots now owned by Fifth Third Bank, but deflected Griffith’s question back, without answering the question. Carroll’s response was to ask Griffith, “How much would you estimate for the seeding of vacant lots? What is your cost estimate? You don’t have a cost estimate?”
In a deal with Zaring and Krohngold, Fifth Third Bank took ownership of the remaining building lots at the Reserves and is now selling the home sites. By default, Loveland now owns the streets and right of way.
James Constable from Goshhen Township has attended recent council meetings to express opposition to the TIF. He told council at their July 13 meeting that he served on the Clermont County MRDD Board for six years, and that he has a disabled son that needs the services they provide. Constable questioned Loveland Mayor Rob Weisgerber about why the City would seed the lots owned by Fifth Third Bank, “That ain’t your responsibility. I don’t know where that would be this City Council’s responsibility to seed those lots. The bottom line is that those lots are owned by Fifth Third Bank. Fifty-five thousand dollars to seed those vacant lots? That ain’t your responsibility. Tell Fifth Third Bank, ‘They're your lots - seed em.”
It was then that Loveland Mayor Rob Weisgerber gave a confusing explanation for what the $55,000 would be used for. He said the money wouldn’t be used to seed the vacant lots, but be used, “When the infrastructure is done, which will include sidewalks and other improvements, the damage that is done to individual properties that are currently there, or others that need to be improved, will need to be brought back - and that is where the seeding and other improvements will be done,” he struggled to explain.
Constable also questioned the legality of using the TIF scheme. He claimed that by Ohio law, a
TIF could only be used if the properties were declared “blighted.” He suggested that the Mayor might have a hard time doing that where these expensive homes are being built.
An Additional Insult
School Board President, Dr. Kathy Lorenz also spoke about the TIF at the public hearing. She said the Board opposed the TIF in general, but the possibility of using the $75,000 from Fifth Third Bank for a park shelter in Nisbet Park, instead of at the subdivision, is, “A great concern of the School District that seems to be an additional insult, when huge tax dollars are diverted.”
Lorenz also said the Board was “A bit dismayed” after seeing an e-mail that Carroll recently sent to a resident of the Reserves where he speculates about who may have “tipped off” the Board about his TIF idea. Lorenz said of the e-mail, “It struck us as possibly indicating there was some desire to hide something from the Board of Education.”
Loveland City Council meets Tuesday night. The TIF ordinance is on their agenda for a final vote. The ordinance will allow the $75,000 Fifth Third money to be used to build the shelter in Nisbet Park.
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