Beware the Haunted Farm Field: An Ohio Tax Increment Financing (TIF) Horror Story
This Halloween, we're telling a real-life public finance horror story about a tiny Tax Increment Financing (TIF) rule that spooks more Ohio communities than you'd think.
So here's your map through the haunted field: (I) what TIF is and why communities use it, (II) how a single penny (R.I.P.) can lock a parcel out of a future Residential Incentive District TIF, (III) why counties have it the scariest, and (IV) how to prevent or escape the nightmare.
It Started with a Quiet Field — For Now
It started the way these horror stories normally do. A quiet, undeveloped field, a white picket fence, and a two-lane road glistening in the Ohio fall.
Yet many Halloweens ago, a well-meaning City Council, Township Board of Trustees, or Board of County Commissioners authorized a TIF on the field and a few hundred acres around it.
But this Halloween, a residential developer knocks on the door with plans for new homes, roads, and water and sewer lines. Either the developer wants a TIF to help pay for the infrastructure, or the community wants one to capture revenue from the development.
Then someone in the back of the room screams: "Those parcels have already been in a TIF!"
Dun. Dun. Dun.
Once a community authorizes a TIF on a parcel and that parcel generates even a single penny (R.I.P.) of service payments in lieu of real property taxes, the community can never again authorize a new Residential Incentive District TIF on that parcel.
Beware the haunted farm field.
But First, a Happy Story: What Is TIF?
TIF is one of Ohio's most widely used economic development tools. A community authorizes a TIF on specific parcels, setting a "base value," like a line in the sand. As private improvements raise values, the increase, i.e., the increment, is exempt from real property taxes, and the owner makes service payments in lieu of taxes in the same amount instead. The County Auditor and County Treasurer settle those payments with the community, which spends them on "public infrastructure improvements"[1] that benefit or serve those parcels.[2] No new taxes are levied.
Some communities use TIF to make a specific project happen because a developer requests a portion of the revenue. Just as often, a community is positioning itself to harness growth that may arrive regardless and offset its future capital spending.
Ohio endows municipalities, townships, and counties with this authority.[3] Each may generally authorize "Commercial Parcel TIFs" slated for commercial projects[4] and "Residential Incentive District TIFs" slated for residential projects.[5]
Ready for the horror?!
The Legend of the Farm Field Parcel
Communities, big and small, like to plan ahead. It's exactly what my public policy professors taught us at The Ohio State University's John Glenn College of Public Affairs. So many communities have blanketed farm fields and vacant ground with Commercial Parcel TIFs or Incentive District TIFs years before anyone breaks ground, often with a business park in mind. The problem? Nobody can predict what will happen with a particular parcel over the next several decades.
Years go by, and the business park never comes. Then a residential developer shows up and asks for a new Residential Incentive District TIF to pay for roads and utilities, or the community wants one to capture the upswing in value. Everyone loves the idea. And that's when the field starts to scream.
The Curse: One Penny Is All It Takes
So what's the curse? The municipal and township TIF statutes share the same short, scary sentence:
"A proposed district may not include any parcel, other than a nonperforming parcel, that is or has been exempted from taxation under division (B) of this section [i.e., a parcel TIF] or that is or has been within another district created under this division [i.e., an incentive district]."[6]
In plain English, once a parcel has been in a TIF, its history follows it like a ghost. Letting the old TIF expire won't lift the curse, and neither will repealing it after the fact.
There is one way out: the magic spell of the "nonperforming parcel." The spell works only if the owner has never made any service payments to the County Treasurer since the TIF commenced.[7] If the owner ever paid even a single penny (R.I.P. to the penny), the parcel is "performing," and the community can never place it in a new Incentive District TIF.
Why so scary? Because the community is stuck with the TIF it already has, and that old TIF may have only a few years left on its clock.[8] A few years of service payments may not cover the roads, water, and sewer lines the project needs. Worse, if the old TIF is a Commercial Parcel TIF, it may not capture the value of the new homes at all.[9] And if the numbers don't work, the developer may take the project, its jobs, and its tax base to a neighboring community.
County Friends? Run!
For our county friends, the story is even more diabolical. The county TIF statute bars a new county Incentive District TIF from including any parcel that "is or has been" in a county Commercial Parcel TIF or another county Incentive District TIF.[10] And there is no "nonperforming parcel" exception at all! Spooky.
The lesson for the Board of County Commissioners is simple. Know every parcel the county has ever placed in a TIF, and treat every new county TIF as a decision that will follow that land forever. There are workarounds, but the county will need its municipal or township partners to lift the curse.[11]
How to Prevent or Escape the Nightmare
As a professor of mine used to say, "Prior preparation prevents poor performance."
Keep the Ghosts Away
- Pick the right trigger. Every TIF ordinance or resolution sets a "trigger," i.e., the moment the exemption starts, and Ohio law offers several options.[12] Many communities pick the year new value first appears on the tax list, which on a farm field can be nothing more than a routine reappraisal bump. Tie the trigger to completion of an actual structure instead. No building? No scary penny.
- Watch the DTE-24. The exemption doesn't commence until someone files a DTE-24 and the Ohio Tax Commissioner approves it.[13] New legislation allows earlier filing,[14] so ask whether anyone already has.
- Plan for the long haul. Match the tool to the use, since a parcel that stays commercial can generally go into another Commercial Parcel TIF later.[15] Don't blanket every acre that might someday grow something besides soybeans. And keep an inventory of every TIF, its parcels, its trigger, and its payment history, update it with the annual March 31 TIF status report,[16] and check it before authorizing any new TIF.
Escape the Haunted Parcel
Already met the farm field parcel? Don't grab the garlic and run just yet. Every situation turns on its facts, but there are often ways to escape alive:
- Catch it before it triggers. A City Council or Township Board of Trustees can terminate a TIF that hasn't generated its first penny and start fresh with a new Residential Incentive District TIF.
- Confirm the parcel never performed. Check whether anyone filed a DTE-24 and pull the County Treasurer's payment history. A municipal or township parcel that never generated a service payment may still qualify as a "nonperforming parcel."[17]
- Look for other paths. The community may be able to amend the old TIF, draw the new district around the haunted parcel,[18] or pair a New Community Authority with a Community Reinvestment Area.[19] A municipality may also be able to use an "Urban Redevelopment TIF," which is immune from the curse.[20]
Don't Go Into the Field Alone
TIF is a powerful tool, and the legend of the haunted farm field parcel is no reason to avoid it. It's a reason to think about the next several decades, not just the next project.
Bricker Graydon Wyatt's public finance teams help communities across Ohio inventory their TIFs, untangle haunted parcels, and structure incentives that hold up. If a haunted farm field parcel might be lurking in your community, reach out to Tyler Bridge at tbridge@bricker.com or 513-892-9383.
Happy Halloween, and beware the legend of the haunted farm field parcel!
This article is for general informational purposes only and is not legal advice.
[1] R.C. 5709.40(A)(8) (defining "public infrastructure improvement"); see also R.C. 5709.73(A)(6); R.C. 5709.77(H).
[2] R.C. 5709.42 and 5709.43 (municipalities); R.C. 5709.74 and 5709.75 (townships); R.C. 5709.79 and 5709.80 (counties).
[3] R.C. 5709.40 (municipalities); R.C. 5709.73 (townships); R.C. 5709.78 (counties, in unincorporated territory).
[4] A township Commercial Parcel TIF cannot exempt property used or to be used for residential purposes. R.C. 5709.73(A)(2). A municipal Commercial Parcel TIF can exempt residential property only if the parcel is located in a blighted area of an "impacted city," a statutory label that fits only a small handful of Ohio municipalities. R.C. 5709.40(B); R.C. 1728.01.
[5] Whether property is "residential" turns on how the County Auditor classifies it. The County Auditor classifies each parcel by its principal and current use, and classifies vacant land by its highest and best probable legal use. The residential class covers land and improvements used and occupied by one, two, or three families, so larger apartment projects generally fall outside it. R.C. 5713.041; Ohio Adm.Code 5703-25-10.
[6] R.C. 5709.40(C)(1); R.C. 5709.73(C)(1) (same).
[7] R.C. 5709.40(A)(9); R.C. 5709.73(A)(8) (defining "nonperforming parcel").
[8] Generally, absent school district approval, an exemption may last no more than 10 years and exempt no more than 75% of the improvement; with approval, it may last up to 30 years and exempt up to 100%. R.C. 5709.40(C)(4), (D), (G); R.C. 5709.73(C)(4), (D), (G); R.C. 5709.78(B)(4), (C), (F).
[9] See note 4.
[10] R.C. 5709.78(B)(1).
[11] For example, the township statute's prior-exemption bar reaches only prior township TIFs, so a township incentive district may include a parcel previously exempted under a county TIF. A township incentive district cannot, however, include territory currently within a county incentive district. R.C. 5709.73(C)(1).
[12] R.C. 5709.40(G); R.C. 5709.73(G); R.C. 5709.78(F).
[13] R.C. 5709.911 (community filing on behalf of property owners); R.C. 5715.27 (property owner filing).
[14] H.B. 479, 136th General Assembly (effective September 23, 2026); R.C. 5715.27(I)(1).
[15] The "is or has been" bar appears only in the incentive district provisions. Compare R.C. 5709.40(B), 5709.73(B), and 5709.78(A) with R.C. 5709.40(C)(1), 5709.73(C)(1), and 5709.78(B)(1).
[16] R.C. 5709.40(I); R.C. 5709.73(I); R.C. 5709.78(H).
[17] Including a nonperforming parcel in the new incentive district ends the old exemption for that parcel. The exemption application under the new ordinance or resolution must identify each nonperforming parcel, the original ordinance or resolution, and the parcel's value history. R.C. 5709.40(C)(1); R.C. 5709.73(C)(1).
[18] R.C. 5709.40(A)(5) (an incentive district must be enclosed by a continuous boundary); R.C. 5709.73(A)(4).
[19] R.C. Chapter 349 (New Community Authorities); R.C. 3735.65 to 3735.70 (Community Reinvestment Areas).
[20] R.C. 5709.41 (available to a municipal corporation engaged in urban redevelopment that has acquired fee title to the parcel).
