In 1993, the Ohio General Assembly passed legislation enabling local communities to create special-purpose districts known as Joint Economic Development Districts (JEDDs). Since that time, the legislation has undergone two significant rewrites in separate House Bills adopted in 2014 and 2016. The statutory code governing JEDDs is contained in ORC Section 715.70–715.72. ORC 715.70 and 715.71 apply only in certain limited circumstances. This document examines JEDDs based on ORC 715.72. The Ohio legislature also added changes to the JEDD process and procedures through H.B. 110. These changes are effective September 30, 2021, and are applicable only to JEDDs created under the general procedure available to subdivisions throughout the state, not to the two restricted types (see ORC 715.70 and 715.71).
A JEDD agreement enables townships, cities, and villages to cooperatively address concerns associated with economic development, diminishing local revenues, growth, and annexation pressures. A JEDD provides a local-community approach to solving economic development issues by allowing local governments to enter into legal agreements that have the potential to increase revenues and create jobs. JEDD contractual agreements, which vary by jurisdiction, serve as a significant economic development tool for local communities.
What Is a JEDD?
A JEDD is a special-purpose territorial district created by contract between municipal corporations and townships for the purpose of encouraging economic development, creating jobs, and improving the economic welfare of citizens (DeWine 2017). Typically, such objectives are accomplished by levying an income tax in the district. The tax revenue is shared by the parties to the JEDD and is used to provide additional services, new facilities or enhanced infrastructure in the JEDD, depending on the terms of the contract.
How Is a JEDD Formed?
A JEDD is formed when a township and a municipal corporation enter into a JEDD contract and adopt legislation approving the terms of the contract. ORC 715.72 provides that the JEDD contract:
- shall specify the type of contributions to be made by each party to develop and operate the district.
- may provide for the parties to share tax revenue and costs.
- shall include an economic development plan, consisting of a schedule for the provision of new or expanded services, facilities, or improvements.
- shall designate a procedure for appointing members to the board of directors and shall enumerate their powers, duties, and functions.
- may grant the board of directors the power to levy an income tax.
- shall specify that restrictions on annexation proceedings apply to unincorporated territory in the district.
- may designate property as a community entertainment district.
The 2021 updates to ORC 715.72 F8 (a–c) provide that the owner of property that is part of the territory of the proposed JEDD may opt out of the district if all or part of the property is:
- located within half a mile of a municipal corporation that is not part of the JEDD, or
- receives water or sewer service under certain agreements from a noncontracting municipal corporation (Ohio Legislative Service Commission 2021).
The new portion of ORC 715.72 requires contracting entities to provide notice of a proposed JEDD to noncontracting municipal corporations that are:
- located within a half mile of the proposed JEDD, or
- be obligated to provide water or sewer services to all or part of the proposed JEDD under certain agreements (Ohio Legislative Service Commission 2021).
In addition, if the territory of the proposed JEDD includes property to which any non-JEDD party would provide water or sewer services, the bill requires that the JEDD contract contains infrastructure details including a professional estimate of the cost to provide utility services to the JEDD, a projection of when such finds will be available and when such costs are likely to be incurred, and a funding analysis with evidence or estimates demonstrating that at least part of the necessary utility infrastructure will be constructed within five years of the JEDD creation (Ohio Legislative Service Commission 2021).
The contracting entities must hold a public hearing after they have agreed to the terms of a JEDD contract, but before legislative action can be taken to approve the contract. Notice of the hearing must be published at least thirty days prior to the date of the hearing. Before the process reaches the approval stage all the following documents must be made available for public inspection:
- a copy of the JEDD contract, including the economic development plan
- a map and description of the area to be included in the district
- a schedule for the collection of income tax, if authorized by the contract
The contracting parties must also circulate a petition to the owners of all real property and businesses within the district, seeking their consent to the creation of the JEDD. Following expiration of the public comment period, and upon receipt of petitions supporting the JEDD that are signed by a majority of the property and business owners, each entity can then adopt legislation (a resolution or ordinance) approving the contract and create the JEDD. Within 10 days following the adoption of the legislation, notice of the creation of the JEDD must be given to any property owner or business owner within the district who did not sign the petition to form the JEDD.
Following approval of the contract, the township trustees must determine whether to submit the resolution approving the JEDD to the electors of the township. The trustees can elect to not submit the matter to the voters if all the following conditions are satisfied:
- The resolution approving the JEDD was passed by the unanimous vote of the township trustees.
- A majority of the property and business owners in the proposed district have signed a petition approving the creation of the JEDD.
- The area within the JEDD is appropriately zoned.
After the above conditions are satisfied and each party has formally approved and signed the JEDD contract, copies of all JEDD documents must be submitted to the director of development services. The estimated timeline needed to create a JEDD is 105 days.
|30 days (minimum)||Discussion, negotiation, legislation preparation, and meetings with city, village, and township entities. Must also provide notice to non-contracting municipal corporations within ½ mile of the proposed JEDD or will be obligated to provide water or sewer services to all or part of the proposed JEDD.|
|30 days (mimimum)||Public hearing notice after draft legislation is created|
|15 days (minimum)||Communities review input from public hearings and amend legislation, if needed|
|30 days||The JEDD becomes law 30 days after legislation is passed by municipality and fomally adopted by the township|
|105 days (total)||JEDD is submitted to the Ohio Development Services Agency|
How Is a JEDD Governed?
A JEDD is governed by an independent and impartial board of directors. Board member appointment is detailed in the JEDD contract, in accordance with ORC 715.72. Generally, if businesses operate within a JEDD, the JEDD is governed by a five-person board, with one person representing each of the following interests:
- all municipalities that are contracting parties
- all townships that are contracting parties
- the owners of businesses located within the JEDD
- all persons working within the JEDD
- the counties, if any, that are contracting parties
If no parties are counties, then the fifth member of the board shall be selected by the other board members. If a fifth member is selected by the board, that person shall serve as the JEDD chairperson.
If no businesses operate in the JEDD when it is formed, ORC 715.72(P)(2) governs the selection and composition of the board. Members should have staggered four-year terms and a member can be reappointed but can serve no more than two consecutive terms.
Generally, the board has the powers delineated in the JEDD contract, provided they do not exceed the powers granted by ORC 715.72. While the powers of JEDDs are not clearly defined by Ohio law, JEDDs generally have the following powers (Bricker & Eckler 2020):
- to levy an income tax within the JEDD at a rate not higher than the highest rate being levied by a municipality that is a contracting party, with an amount being set aside for the long-term maintenance of the JEDD
- to determine the substance and administration of zoning and other land-use regulations, building codes, permanent public improvements, and other regulatory matters for public purpose
- to limit and control annexation of unincorporated territory within the JEDD
- to limit the granting of property tax abatements and other tax incentives within the JEDD
- to create a JEDD in a mixed-use area where both residents and businesses are located
- to create a community entertainment district within a JEDD
How Does a JEDD Work?
Consider the following scenario: a municipality does not have land available for industrial development, but it has a business interested in constructing a facility in the area. While the municipality does not have the land available for industrial development, it does have infrastructure available near a parcel of vacant land located in an adjacent township. In this case, the municipality and the township could create a JEDD that includes the township parcel. The JEDD could enable the parties to collaborate, provide utility services and infrastructure for the parcel, and ultimately enable the land to be sold and developed. Creation of a JEDD would offer the municipality access to developable land and would generate infrastructure services revenue. It would also enable the township to access the infrastructure needed to make the land developable. Both parties would benefit from new jobs, an enhanced property, and income tax revenue for long-term maintenance of the JEDD. The JEDD would allow the parties to meet their economic development objectives without having to consider annexation. In addition, it would generate increased revenue for the parties through the collection of income taxes—a revenue source that would otherwise be unavailable to the township.
What Are the Advantages of a JEDD for a Township, City, or Village?
- A JEDD provides increased revenues through income taxes and increased real property taxes on previously vacant or undeveloped land parcels.
- A JEDD agreement prohibits annexation by the city or village for a period of three years and creates a cooperative agreement with the city or village.
- The increased revenue enables the township to provide additional services to its residents at no additional cost.
- A JEDD enables the extension of utility services to previously unserved parcels.
- A JEDD provides a framework for cooperating with municipalities, enabling the parties to solve local economic development issues and provide new growth opportunities.
City and Village Advantages
- A JEDD enables a city or village to increase its income tax revenues.
- A JEDD typically results in new utilities customers, therefore generating additional revenue.
- The JEDD provides a framework for cooperating with townships, enabling the parties to solve local economic development issues and provide new growth opportunities.
The Joint Economic Development District is a creative, localized tool that allows municipalities and townships to collaborate outside of municipal limits to achieve greater economic growth. It provides a mechanism for the collaborators to work cooperatively to foster development activities without annexation. The additional revenues generated by such activities are then used to provide enhanced infrastructure and public services in the JEDD area. In this way, the JEDD improves the economic outlook of a community and provides enhanced services for its citizens.
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DevelopOhio Economic Incentives Toolkit: An Effective Economic Development Toolkit for Growth and Job Creation. 2020. https://www.bricker.com/Documents/
DeWine, Mike. 2017. Ohio Economic Development Manual 2017. Columbus: Ohio Attorney General’s Office. PDF e-book.
Galen, Matthew. “Joint Economic Development Districts (JEDDs).” The Ohio Real Estate Law Blog. July 10, 2008. http://www.ohiorelaw.com/search?q=JEDDs.
Mathur, Shishir, and Adam Smith. 2013. “Land Value Capture to Fund Public Transportation Infrastructure: Examination of Joint Development Projects' Revenue Yield and Stability.” Transport Policy, Volume 30, 327–35.https://doi.org/10.1016/j.tranpol.2013.09.016.
McCarthy, Robert. “JEDDs Remain a Flexible, Powerful Tool for Promoting Development.” Insights & Resources (blog). Bricker & Eckler Attorneys at Law, November 8, 2018. https://www.bricker.com/people/robert-mccarthy/
McDaniels, Joe. 2016. Final Analysis, Sub.H.B. 182. Columbus: Ohio Legislative Service Commission. https://www.legislature.ohio.gov/download?key=5593&format=pdf.
McGraw, Debora. “Revamping the Ohio JEDD.” The Buzz (blog). Zaino, Hall & Farrin LLC Attorneys at Law, June 14, 2016. https://www.zhftaxlaw.com/single-post/2016/06/16/Revamping-the-Ohio-Joint-Economic-Development-District-Law.
The Montrose Group, LLC. 2019. “Four Steps to Building the PPP for Site Development.” Posted July 8, 2019. https://montrosegroupllc.com/2019/
Ohio Legislative Service Commission. 2021. Comparison Document, House Bill 110—134th General Assembly. Legislative Budget Office, Office of Research and Drafting. PDF. https://www.lsc.ohio.gov/documents/budget/134/mainoperating/SP/comparedoc-hb110-cc.pdf.
Ohio Rev. Code, Section 715.70 Contract Creating Joint Economic Development District. Document #241850. H.B. 494. 130th General Assembly. (2015). https://codes.ohio.gov/assets/laws/revised-code/authenticated/7/715/715.70/3-20-2015/715.70-3-20-2015.pdf.
Randall, Megan, Kim Rueben, Brett Theodos, and Aravind Boddupalli. 2018. “Partners or Pirates? Collaboration and Competition in Local Economic Development.” Urban Institute. (December 20, 2018). https://www.urban.org/research/publication/
Schrader, Al. 1996. “Joint Economic Development Districts Parts 1 & 2.” Ohio Township News.
This fact sheet, originally published in 2007, was written by David Civittolo of Ohio State University Extension.