Can Elyria afford new city buildings?

Elyria Mayor Kevin Brubaker had good reason to be excited when plans to build a mixed-use development off Reaser Pointe Crossing in southeast Elyria were announced Monday. "You're bringing something very good to the city of Elyria," Brubaker gushed at the conference with developer Dan Reaser. "It's going to benefit the city of Elyria as residents, it's going to benefit the city of Elyria from a commercial standpoint, and it's going to greatly benefit our Elyria City School District." Immediately north of Chestnut Commons, the area has long been ripe for development, but progress was delayed by a dispute between Reaser and the city over flooding along the road, which leads into the back of Chestnut Commons. Those issues thankfully appear to have been resolved. The 55-acre development would include commercial space and 422 townhouses, which would sell for between $250,000 and $300,000. That would bring in new residents, including students for Elyria Schools, and businesses, which would need workers. Details regarding zoning and a tax-increment-financing plan still need to be sorted out, but the development would be good for Elyria and its tax base. Reaser sweetened the announcement by pledging to donate roughly two acres of land, valued at around $2 million, to the city for construction of a new fire station. It was a generous gift. Fire Chief Joe Pronesti and others have argued that a fourth station would improve safety on city's fast-growing southeast side. Kramer and Associates Group, a consulting firm hired by the city, determined that a new fire station in the area would be justified. That might well be true, but the city also needs to pay for it. Brubaker didn't go into those details Monday, but when we asked him about it on Tuesday, he had an answer: The city would borrow the money. He said Elyria Finance Director Ted Pileski had estimated that the city had the capacity to borrow up to $20 million in the form of bonds to be repaid over the course of 30 years. The consultant pegged the cost of building a new station at around $6.5 million, but Brubaker told us he believed the cost would come in between $4 million and $5 million. The project would be cheaper because of Reaser's property donation, although the $6.5 million estimate didn't include the cost of land, Brubaker said. He also told us that if a new fire station were constructed, the Fire Department would relocate the few remaining personnel still working out of its largely unused station on East Broad Street and sell the building. If the city can find a buyer, that might help defray the cost. So, too, might an agreement with Lorain County Community College, which is considering opening a firefighter training academy. A partnership with the city has been discussed, but no deal has been struck, Brubaker said. A new fire station isn't the only big project the city is contemplating. Elyria has long needed a new central maintenance garage, which it would likely build on land it owns on Garden Street, close to where its existing garage is located. Brubaker said that project would cost an estimated $12 million to $15 million. Between a fire station and a maintenance garage, the city could exhaust its ability to borrow money. (Brubaker did say that if interest rates fell, the city would be able to seek better terms through refinancing.) The question is whether the city can afford to make payments on $20 million in bonds. Again, Brubaker was optimistic that the city could swing the cost, even though it will have to begin paying for 45 police officers and firefighters out of the general fund next year. Their salaries for now are being covered by American Rescue Plan Act funds. Yes, the city has set aside around $14 million to cover those expenses in the coming years, but that money will last only so long. Another question is whether additional firefighters would be needed to staff a new station. Pronesti has said he could manage four stations with his existing staff. (On the other hand, he's also suggested that a few more firefighters wouldn't hurt.) Brubaker said the city would manage all of these costs without raising taxes. Instead, he contended that development in the city would increase tax revenues. Although the city took a blow to its revenue stream when Bendix Commercial Vehicle Systems relocated to Avon a few years ago, it has managed to recoup some, but not all, of that money. Reaser's new development should help with that, as we hope would whatever happens with the Lorain County Port Authority's efforts to redevelop Midway Mall. Brubaker teased other economic development efforts as well. For all of his enthusiasm, Brubaker acknowledged that it was still early in the decision-making process. He also said he would work closely with City Council. That's good. Elyria officials shouldn't commit to expensive projects without taking a hard look at whether the city can afford them.