CANFIELD City sees farmland as hedge for future

The city most likely will take out a loan to pay some of the purchase price.
By IAN HILL
VINDICATOR STAFF WRITER
CANFIELD -- City council will have "invested money to make money" if it buys 288 acres of farmland in the township for $2.4 million, Mayor Lee Frey says.
Exactly how the city could make money off the land, however, is yet to be determined. The city most likely would have to annex the land if it would want to collect tax revenue from it.
"There's a ton of different things that we all have to look at now," Frey said.
City Manager Charles Tieche, representing the city, was the winning bidder for all but about 10 acres of the 298-acre Red Gate Farm at auction Saturday. The farm, also known as Kilcawley Farm, is at the intersection of U.S. Route 62 and Leffingwell Road.
City council is expected to approve the purchase tonight at 6 in council chambers. Information about who bought the other 10 acres was not available Tuesday.
Frey said no decision has been made for the future of the land.
Financial preparation
He said city officials saw Saturday's auction as an opportunity to prepare for financial difficulties they may have in the future.
"In 10 years, when the city is developed and the revenues are decreasing, what do you do?" Frey said. "We are creating a stronger economic base. In the future, that stronger economic base will pay off.
Frey added that the city believes it can sell the land for more than $2.4 million if it decides that the land couldn't be used to increase revenue.
Several area communities, including Canfield, are facing an uncertain financial future because of decreases in revenue and increases in health-care costs.
Most of the city's general fund revenue comes from income tax. The city collected $2,069,000 from income taxes last year -- about $5,000 less than it collected in 2001.
Frey stressed, however, that the city's budget remains "very good and solvent."
Annexation likely
The farmland most likely would have to be annexed to the city before city officials could collect income taxes from any residents living on it. Frey noted that officials may look at making the land part of the city.
The city couldn't annex the Red Gate Farm land without annexing other land between the city border and the farm. The owners of that property would have to seek the annexation of their land; the city would not try to coerce annexation. Tieche said the city did not have any options on buying that land.
If the land isn't annexed, city officials would have to ask the township to change its zoning if they want to use it for anything other than agriculture.
Tieche said he will suggest that council spend three to five years working to determine what it should do with the land. He said during that time, council could lease the land to a farmer. The city also would collect revenue from gas wells on the farm.
Royalties from the wells were about $8,000 last year.
Source of money
Council appropriated $750,000 for a land purchase this year in an effort to prepare for its financial future. The city also has about $250,000 in a contingency fund it also would use for the Red Gate Farm purchase, Tieche said.
Tieche said he has talked to Farmers National Bank about using a short-term loan to pay the remaining $1.4 million. In an executive session meeting, council had endorsed spending as much as $3.8 million on the land.
Both Tieche and Frey stressed they would not have to cut services for residents to pay for the land.
hill@vindy.com