Explanation
Background: City Council passed Ordinance No. 1237-2015 (the “2015 Ordinance”) on June 8, 2015, creating a tax increment area between Dublin Road and the Heritage Trail (the “Old Dublin Road TIF”). Ordinance No. 0669-2021, passed by City Council on March 22, 2021, authorized the City to enter into the Tax Increment Financing and Cooperative Agreement dated May 12, 2021 (the “TIF and Cooperative Agreement”) by and among the City, Columbus-Franklin County Finance Authority (“CFCFA”) and Hallmark Dublin Road, LLC (the “Developer”). The Developer had completed its 270-unit apartments on Franklin County Auditor Tax Parcel ID No. 560-211803 (the “Property”). Under the TIF and Cooperative Agreement, the CFCFA agreed to issue bonds (the “Bonds”) to reimburse the Developer’s costs of the City’s P650145-100000 (Old Dublin/Trabue Sanitary Sewer Extension) involving the extension of public sanitary sewer and water lines along Trabue Road and Dublin Road to the Property. Subsequently, the City pledged the Old Dublin Road TIF revenue from the parcels exempted by the 2015 Ordinance to repay the Bonds. In addition, the City, CFCFA, and the Developer’s affiliate who owned the Property (the “Property Owner”) entered into a thereafter recorded the Declaration of Covenants and Imposition of Continuing Priority Lien (Revised Code Section 5709.91 Tax Lien) dated June 8, 2021 (the “Declaration”) for the imposition of a minimum service payment obligation against the Property in order to provide additional security for the repayment of the Bonds. As a condition of a potential buyer’s acquisition of the Property, the Developer has agreed to deliver an amount sufficient to permit the repayment of the Bonds if the CFCFA and City terminate the TIF and Cooperative Agreement and the Declaration. This legislation will authorize the City to enter into the Termination and Release Agreement by and among the City, CFCFA, Developer, and Property Owner, and execute a certificate evidencing the termination of the Declaration. This legislation will authorize the termination of the TIF and Cooperative Agreement as well as the Declaration pursuant to the terms and conditions of the Termination and Release Agreement.
Emergency Justification: An emergency exists in the usual daily operation of the Department of Development to immediately allow for the execution of the Termination and Release Agreement otherwise the sale of the Property may not happen by the end of the tax year, which could mean the Developer may opt to not repay the Bonds, and the City would still be obligated to use the Old Dublin Road TIF revenue to repay the Bonds therefore not providing any financial benefit to the City without delay.
Fiscal Impact: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to execute and deliver the Termination and Release Agreement by and among the City, Columbus-Franklin County Finance Authority, Hallmark Dublin Road, LLC, and Quarry Lofts Partners, LLC to terminate the Tax Increment Financing and Cooperative Agreement dated May 12, 2021 and the Declaration of Covenants and Imposition of Continuing Priority Lien dated June 8, 2021; to authorize such Director to also execute and deliver a Release and Termination of Declaration certificate between City and the Columbus-Franklin County Finance Authority evidencing the termination of the declaration; and to declare an emergency. ($0.00)
Body
WHEREAS, City Council passed Ordinance No. 1237-2015 (the “2015 Ordinance”) on June 8, 2015, creating a tax increment area between Dublin Road and the Heritage Trail (the “Old Dublin Road TIF”); and
WHEREAS, Ordinance No. 0669-2021, passed by City Council on March 22, 2021, authorized the City to enter into the Tax Increment Financing and Cooperative Agreement dated May 12, 2021 (the “TIF and Cooperative Agreement”) by and among the City, Columbus-Franklin County Finance Authority (“CFCFA”) and Hallmark Dublin Road, LLC (the “Developer”); and
WHEREAS, the Developer had completed the construction of both its 270-unit apartments on Franklin County Auditor Tax Parcel ID No. 560-211803 (the “Property”) and the extension of public sanitary sewer and water lines along Trabue Road and Dublin Road to the Property (the “Project”); and
WHEREAS, under the TIF and Cooperative Agreement, the CFCFA agreed to issue bonds (the “Bonds”) to reimburse the Developer for the Project, and the City pledged the Old Dublin Road TIF revenue from the parcels exempted by the 2015 Ordinance to repay the Bonds; and
WHEREAS, the City, CFCFA, and the Developer’s affiliate who owned the Property (the “Property Owner”) entered into a thereafter recorded the Declaration of Covenants and Imposition of Continuing Priority Lien (Revised Code Section 5709.91 Tax Lien) dated June 8, 2021 (the “Declaration”) for the imposition of a minimum service payment obligation against the Property in order to provide additional security for the repayment of the Bonds; and
WHEREAS, as a condition of a potential buyer’s acquisition of the Property, the Developer has agreed to deliver an amount sufficient to permit the repayment of the Bonds if the CFCFA and City terminate the TIF and Cooperative Agreement and the Declaration; and
WHEREAS, this legislation will authorize the City to enter into the Termination and Release Agreement by and among the City, CFCFA, Developer, and Property Owner, and execute a certificate evidencing the termination of the Declaration; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development to immediately allow for the execution of the Termination and Release Agreement otherwise the sale of the Property may not happen by the end of the tax year, which could mean the Developer may opt to not repay the Bonds, and the City would still be obligated to use the Old Dublin Road TIF revenue to repay the Bonds therefore not providing any financial benefit to the City without delay, all for the immediate 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 Director of the Department of Development, or his or her authorized designee (altogether, the “Director”), on behalf of the City, is authorized to enter into the Termination and Release Agreement by and among the City, the Columbus-Franklin County Finance Authority, Hallmark Dublin Road, LLC, and Quarry Lofts Partners, LLC presently on file with the Department of Development, along with any changes or amendments thereto not inconsistent with this Ordinance and not substantially adverse to the City and which shall be approved by the Director and the City Attorney, provided that the approval of such changes and amendments thereto, and the character of those changes and amendments not being substantially adverse to the City, shall be evidenced conclusively by the execution and delivery thereof, that such changes are not inconsistent or adverse to the City; the Director is authorized to terminate the TIF and Cooperative Agreement as well as the Declaration pursuant to the terms and conditions of the Termination and Release Agreement.
Section 2. That the Director, or other appropriate officers of the City, are authorized to execute such other agreements and instruments, subject to approval by the City Attorney’s Office, and to take all actions as may be necessary to implement this Ordinance and the transactions contemplated by the Termination and Release Agreement including, but not limited to, executing the Termination of Declaration certificate between City and the Columbus-Franklin County Finance Authority evidencing the termination of the Declaration.
Section 3. That for reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in full force from and after its passage and approval by the Mayor or ten days after passage if the Mayor neither approves nor vetoes the same.