Explanation
BACKGROUND: The need exists to amend the geographic boundary of the TIF district created pursuant to Columbus City Council Ord. No. 0671-2004, approved April 26, 2004 (the "Ordinance"), declaring improvements to certain parcels of real property within the area known as the former AC Humko site (525 W. 1st Avenue) to be for a public purpose and requiring owners, thereof, to make service payments in lieu of taxes to finance public infrastructure improvements under Ohio Revised Code Section 5709.41; Tax Increment Financing (TIF).
Royal Tallow Holdings Ltd., one of the AC Humko site developers, has been engaged in environmental clean up activities at the site since the summer of 2004, where, with Harrison Park Development, Ltd., it intends to begin constructing approximately 300 owner-occupied residential units.
Since the approval of Ord. No. 0671-2004, Royal Tallow Holdings Ltd. and Harrison Park Development, Ltd. have acquired additional parcels of real property contiguous to the boundary established under the Ordinance and desire to include these parcels for the benefit of helping to finance capital improvements through additional residential construction on these parcels.
The City and Royal Tallow Holdings Ltd. and/or Harrison Park Development, Ltd. will enter into a TIF and Development Agreement under ORC Section 5709.41 to pay for infrastructure and other development costs associated with the former AC Humko site and other property added to the TIF district pursuant to this ordinance. Under Ordinance 1838-2005, the City agreed to acquire title to the property affected by this amendment and transfer title to the current property owners in order to comply with the requirements for an O.R.C. Section 5709.41 TIF.
This ordinance continues the process of establishing the TIF by establishing that improvements to the site are for a public purpose, requiring the owners to make service payments in lieu of taxes while establishing an urban redevelopment tax increment equivalent fund for the deposit of such service payments.
FISCAL IMPACT: No funding is required for this legislation.
Title
An ordinance amending the geographic boundary of Columbus City Council Ord. No. 0671-2004; declaring improvements to certain parcels of real property contiguous to the area known as the former AC Humko site, to be a public purpose; requiring the owners thereof to make service payments in lieu of taxes; establishing an urban redevelopment tax increment equivalent fund for the deposit of such service payments; describing the improvements to be made; and to declare an emergency.
Body
WHEREAS, the City is committed to improving existing neighborhoods and providing new neighborhood housing; and
WHEREAS, Columbus City Council Ord. No. 0671-2004, approved April 26, 2004 (the "Prior Ordinance"), established a Tax Increment Finance (TIF) district under Ohio Revised Code Section 5709.41 designed to improve the former AC Humko site within the Harrison West Neighborhood of Columbus; and
WHEREAS, Royal Tallow Holdings Ltd. and Harrison Park Development, Ltd., collectively the "Developer" of the former AC Humko site, have acquired additional real property described on Exhibit A, attached hereto (the "Property"), contiguous to the TIF area created pursuant to the Prior Ordinance and desires to amend the existing TIF boundary to include the Property; and
WHEREAS, the City has determined that it is necessary to pass an ordinance declaring the Project to be a public purpose under Ohio Revised Code Section 5709.41; and
WHEREAS, Ohio Revised Code Sections 5709.41, 5709.42 and 5709.43 provide that this Council may declare improvements to a parcel of real property located in the City to be a public purpose, thereby exempting those improvements from real property taxation for a period of time, provide for the making of service payments in lieu of taxes by the owner(s) thereof, provide for the distribution of the applicable portion of those service payments to the overlapping Columbus City School District, and establish an urban redevelopment tax increment equivalent fund into which the remaining portion of such service payments shall be deposited and specify the purposes for which money in that fund shall be expended; and
WHEREAS, the City finds that certain determinations must be made prior to the adoption of an ordinance amendment under Ohio Revised Code Section 5709.41; and
WHEREAS, Ohio Revised Code Section 5709.41 requires that the City have held title to the Property prior to the adoption of an ordinance declaring that its development is for a public purpose; and
WHEREAS, pursuant to the authority of Ordinance 1838-2005, the City acquired title to the Property from the current owners prior to the passage of this ordinance and has transferred title back to the current owners; and
WHEREAS, the City finds that a portion of the Project will include residential real estate and to declare such improvement to be a public purpose under Ohio Revised Code Section 5709.41, such improvement must be constructed in a blighted area of an impacted city (each as defined in Ohio Revised Code Section 1728.01); and
WHEREAS, the City's Department of Development has undertaken a blight assessment and study of the Property which assessment and study concludes that the Property is a "blighted area" as that term is defined in Ohio Revised Code Section 1728.01, and that assessment and study and those findings have been submitted to this Council; and
WHEREAS, the Director of the Ohio Department of Development has certified Columbus to be an "impacted city" within the meaning of Ohio Revised Code Section 1728.01; and
WHEREAS, to carry out its public purposes of the elimination of conditions of, and prevention of the recurrence of blight, and in furtherance of other public purposes, the City has determined to facilitate the development of the Project by passing an Ordinance declaring the development of the Property to be a public purpose under Ohio Revised Code Section 5709.41; and
WHEREAS, the City has determined that it is necessary and appropriate and in the best interests of the City to provide for service payments in lieu of taxes with respect to the Property pursuant to Ohio Revised Code Section 5709.42; and
WHEREAS, this City Council finds and determines that notice of this proposed Ordinance has been delivered to all affected school districts in accordance with Ohio Revised Code Section 5709.83 and hereby ratifies the giving of that notice; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is necessary to proceed as quickly as possible to facilitate without delay the urban redevelopment of the property through the Project for the preservation of the public health, peace, property, safety and welfare; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the City has previously acquired title to the Property and transferred title to the Property back to the Developer or the current owners of certain portions of the Property, as applicable, prior to the passage of this Ordinance.
Section 2. That, based on the findings of the Department of Development referred to above, the Property is a blighted area within the meaning of Ohio Revised Code Section 1728.01(E).
Section 3. That, subject to any tax exemptions subsequently granted pursuant to Ohio Revised Code Sections 3735.65 through 3735.70 (a "CRA Exemption") and pursuant to and in accordance with the provisions of Ohio Revised Code Section 5709.41, this Council hereby finds and determines that 100% of the increase in the assessed value of the Property subsequent to the acquisition by the City (which increase in value is hereinafter referred to as the "Improvement" as defined in Ohio Revised Code Section 5709.41) is hereby declared to be a public purpose, and shall be exempt from taxation for a period commencing on the effective date of this Ordinance and ending on the expiration of the TIF district created pursuant to the Prior Ordinance, all in accordance with the requirements of Ohio Revised Code Sections 5709.41 to 5709.43.
Section 4. That as provided in Ohio Revised Code Section 5709.42, the owners of the Property are hereby required to, and shall make, service payments in lieu of taxes to the County Treasurer on or before the final dates for payment of real property taxes, applicable portions of which service payments shall be (i) distributed by the Franklin County Treasurer to the Columbus City School District, or (ii) deposited in the ACH Urban Redevelopment Tax Increment Equivalent Fund established pursuant to the Prior Ordinance (the "Fund"), all pursuant to Ohio Revised Code Sections 5709.41 and 5709.42, and as provided in Section 5 of this Ordinance. Each payment shall be in the same amount as the real property taxes that would have been charged and payable against the Improvements (after credit for any other payments received by the City under Ohio Revised Code Sections 319.302, 321.24, 323.152 and 323.156, hereinafter referred to as the "Property Tax Rollback Payments") had an exemption for taxation not been granted, and shall otherwise be in accordance with Ohio Revised Code Section 5709.41 through 5709.43. Any late payments shall be subject to penalty and bear interest at the then current rate established under Ohio Revised Code Sections 323.121 and 5703.47, as the same may be amended from time to time (the payment of penalties and interest, along with the payments in lieu of taxes are collectively referred to herein as the "Service Payments"). This Council further hereby authorizes and directs the Director of the Department of Development, the City Auditor, the Director of Law, or other appropriate officers of the City, to make such arrangements as are necessary and proper for collection from the owners of said service payments in lieu of taxes, including the preparation and filing of any necessary exemption applications.
Section 5. That pursuant to Ohio Revised Code Sections 5709.41 and 5709.42, the County Treasurer shall distribute to the Columbus City School District from the Service Payments and any Property Tax Rollback Payments, and at the same time and in the same manner as real property tax payments, amounts equal to the amounts that School District would otherwise receive as real property tax payments derived from the Improvement absent the passage of this Ordinance.
The Fund shall be in the custody of the City and shall receive all Service Payments and Property Tax Rollback Payments not distributed to the Columbus City School District. Those Service Payments and Property Tax Rollback Payments so deposited and distributed pursuant to law as provided in Ohio Revised Code Section 5709.42 shall be used for the following purposes authorized in Ohio Revised Code Sections 5709.41, 5709.42 and 5709.43: Paying for or financing the costs of improvements to or on, or servicing the Property or the Project, including but not limited to water, sewer and storm sewer improvements; road, sidewalk and streetscape improvements; parks and recreation improvements; the acquisition of real estate and interests in real estate, and site preparation, for those improvements and for the Project; together with all necessary appurtenances and related costs, including but not limited to construction of improvements on the Property and all costs enumerated in Ohio Revised Code Section 133.15(B). The Fund shall remain in existence so long as such service payments are collected and used for the aforesaid purposes, after which said Fund shall be dissolved in accordance with Ohio Revised Code Section 5709.43.
Section 6. That pursuant to Ohio Revised Code Section 5709.41, the Clerk of this Council is hereby directed to deliver a copy of this Ordinance to the Director of the Department of Development of the State of Ohio within fifteen days after its passage. On or before March 31 of each year that the exemption set forth in Section 1 hereof remains in effect, the Director of Development or other authorized officer of this City shall prepare and submit to the Director of the Ohio Department of Development the status report required under Section 5709.41(E) of the Ohio Revised Code.
Section 7. That the TIF district boundary established under Columbus City Council Ord. No. 0671-2004, approved April 26, 2004, is amended as described on Exhibit A, and attached hereto.
Section 8. That the Director of the Department of Development of this City (the "Director"), for and in the name of this City, is hereby authorized to execute one or more tax increment financing and development agreements by and between the City and the Developer or its assignee(s) for the purpose of developing the Project on TIF district created pursuant to the Prior Ordinance and the Property (which shall be included in the TIF district) in such form or forms as the Director shall approve, with such approval evidenced conclusively by the execution thereof by the Director,
Section 9. That the Service Payments and Property Rollback Payments deposited in the Fund shall be deemed appropriated for the purposes set forth in the TIF Agreement and authorized to be expended therefrom in accordance with the TIF Agreement and the City Auditor is hereby authorized to make payments to the Developer or its designee from the Fund upon receipt of invoice(s) approved by the Director of Development.
Section 10. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this Ordinance is declared to be
an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after
passage if the Mayor neither approves or vetoes this Ordinance.