In 2006, the City of Centerville entered into a
preannexation agreement with the owner of certain real property located in
Sugarcreek Township. The annexation was of
the sort termed a type-2 annexation, whereby the land is annexed but also
remains a part of the township. The
preannexation agreement between the property owners and Centerville also
required the City to adopt a tax increment financing (TIF) plan for the
property. TIF plans are a particular
method of financing public improvements wherein property owners pay a service
payment to a fund in lieu of property taxes, and that fund is used to pay bond
obligations. Sugarcreek Township had
previously adopted its own TIF plan with respect to some of the property. Greene County granted the annexation
petitions in July 2006.
In September 2006, FBT attorney Scott Phillips filed suit in
the Court of Common Pleas, Greene County, Ohio on behalf of Sugarcreek Township.
The Complaint requested a declaration that Centerville may
not implement a TIF on real property that was annexed by a type-2 annexation because
Sugarcreek is entitled to all real property tax receipts from the annexed land,
and because Sugarcreek had already implemented a TIF on the property.