Jankowski v. Monclova-Maumee-Toledo Joint Economic Development Zone Board of Directors

185 Ohio App. 3d 568 · Ohio Court of Appeals · 2010

Facts

Monclova Township, Maumee, and Toledo created a Joint Economic Development Zone (JEDZ) and levied a 1.5% income tax. Appellants challenged the tax, arguing improper revenue distribution, lack of consideration for a service contract with Monclova Township, and the JEDZ contract's failure to specify required improvements. The trial court granted summary judgment for the JEDZ, leading to this appeal.

Issue

1. Can JEDZ income tax revenues be distributed to contracting municipalities for general purposes, or must they be used exclusively for the JEDZ's benefit? 2. Is a contract between the JEDZ and Monclova Township for "usual and customary governmental services" valid when the township already has a pre-existing legal duty to provide those services? 3. Is the 2003 JEDZ contract valid under R.C. 715.691, despite provisions disclaiming specific obligations for improvements, when it incorporates an economic development plan detailing projects?

Holding

The court affirmed in part and reversed in part. It held that JEDZ income tax revenues may be distributed to contracting municipalities for general purposes as specified in the contract. However, the contract between the JEDZ and Monclova Township for governmental services was invalid for lack of consideration, as the township had a pre-existing legal duty to provide those services. The 2003 JEDZ contract was found valid, as its incorporated economic development plan satisfied statutory requirements.

Rule

R.C. 715.691(H) permits JEDZ income tax revenues to be used for both the purposes of the zone and the contracting municipal corporations pursuant to the contract. A contract lacks valid consideration when one party promises to perform a legal duty already owed to the other party. A JEDZ contract, including an incorporated economic development plan, can satisfy statutory requirements for specifying improvements even if specific financial arrangements are deferred.

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