Explanation
Background:
Pursuant to Ordinance No. 2822-2017, the City and Wagenbrenner Development, Inc. (the “Developer”) entered into an Economic Development Agreement dated December 22, 2017 (the “EDA”) for the Developer’s approximately 55.707-acre Grandview Crossing project that will redevelop property located at the northeast corner of Dublin Road and Grandview Avenue (the “Initial Property”). In the EDA, the City committed to cooperating with the Developer to establish tax increment financing (“TIF”) pursuant to R.C. Section 5709.41 to support the urban redevelopment of the Initial Property. By Ordinance No. 3009-2019, City Council established a TIF over the Initial Property (the “Grandview Crossing TIF”). The City further agreed under the EDA that if the Developer or an affiliate acquired property adjacent to the Initial Property that the City would agree to add that property to a TIF. The City further agreed under Ordinance No. 3009-2019 that the Developer may request the TIF to be amended or readopted to allow for more than one 30-year term. 810 Grandview LLC and the Grandview Crossing Community Authority have obtained control of adjacent property to the Initial Property that encompasses the rear portion of the Franklin County Engineer’s Office’s property at 970 Dublin Road (the “Additional Property”) to be developed with approximately 300 new apartments named 4 on the Line.
This Ordinance amends Ordinance No. 3009-2019 to remove undeveloped parcels and establishes on the Additional Property and undeveloped parcels in the Grandview Crossing TIF (collectively, the “GVX II Parcels”) a new TIF pursuant to R.C. Section 5709.40(B) (the “Grandview Crossing II TIF”) to provide a one-hundred percent (100%) exemption from real property taxation on the increase in assessed value of the GVX II Parcels for a concurrent period of not more than 30 years for all GVX II Parcels. Annual service payments in lieu of taxes will be made by the owners of each of the GVX II Parcels with respect to the increase in assessed value thereon. Columbus City Schools will receive, in the same manner as usual, all amounts that it would have received in real property taxes had this exemption not been granted. The applicable portion of the service payments will be distributed directly to Columbus City Schools. The remaining non-school portion of those service payments will be paid to the City for deposit into the TIF fund established by this Ordinance to then finance public infrastructure improvements pursuant to R.C. Section 5709.40(A)(8). This Ordinance will also appropriate and authorize the Grandview Crossing II TIF service payments in accordance with the first amendment (the “First Amendment”) to the Tax Increment Financing and Cooperative Agreement dated June 1, 2020 by and among the City, the Grandview Crossing Community Authority, and 810 Grandview LLC to be authorized by this same Ordinance.
Fiscal Impact: No funding is required for this legislation. The City is foregoing from taxation one hundred percent (100%) of the real property tax revenue that it would have received from the development of the Grandview Crossing II TIF parcels (tax revenue that is already foregone under the existing Grandview Crossing TIF and the Franklin County Engineer’s Office tax exemption). Instead, the non-school portion of that revenue will be diverted to the new Grandview Crossing II TIF Fund.
Title
To amend Ordinance No. 3009-2019 by removing undeveloped parcels from the Grandview Crossing TIF and affirming the exemption term phases for the remaining parcels; to declare the improvements to those removed parcels plus additional property adjacent to the Grandview Crossing TIF to be a public purpose and exempt from real property taxation pursuant to R.C. Section 5709.40(B) to create the new Grandview Crossing II TIF; to require the owners of those parcels to make service payments in lieu of taxes; to require the distribution of the applicable portion of those service payments to the Columbus City Schools; to establish a municipal public improvement tax increment equivalent fund for the deposit of the remainder of those service payments; to appropriate and authorize the expenditure and transfer of revenues deposited in the aforementioned Grandview Crossing II TIF Fund; to authorize the Director of the Department of Development to enter into the first amendment to the Tax Increment Financing and Cooperative Agreement dated June 1, 2020 by and among the City, the Grandview Crossing Community Authority, and 810 Grandview LLC to provide most of the revenues in the Grandview Crossing II TIF Fund to the Grandview Crossing Community Authority, or its designee, for costs and obligations of public infrastructure improvements thereunder. ($0.00)
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WHEREAS, Wagenbrenner Development. Inc. (the “Developer”) is redeveloping approximately 55.707-acres of property located at the northeast corner of Dublin Road and Grandview Avenue (the “Initial Property”); and
WHEREAS, the Developer planned a mixed-use commercial and residential development known as the Grandview Crossing project consisting of approximately 200,000 square feet of Class A office space, 900 apartment units, a 260-unit senior living facility, a 120-key hotel, 29,000 square feet of retail space, additional site improvements and amenities for the office and residential uses including surface and structured parking, roadway improvements, utilities, and green space; and
WHEREAS, to support the redevelopment of the Grandview Crossing project, Ordinance No. 2822-2017 authorized the City to enter into the Economic Development Agreement dated December 22, 2017 (the “EDA”) with the Developer to thereafter cooperate in the establishment of a tax increment financing (“TIF”) area for the Initial Property (the “Grandview Crossing TIF”), which was established by City Council with passage of Ordinance No. 3009-2019; and
WHEREAS, the City further agreed under the EDA that if the Developer or an affiliate acquired adjacent property to the Initial Property that the City would agree to add the adjacent property to a TIF; and
WHEREAS, 810 Grandview LLC and the Grandview Crossing Community Authority control the rear portion of the Franklin County Engineer’s Office’s property at 970 Dublin Road through leases of at least forty (40) years’ duration, options, or contracts to purchase (as depicted on Exhibit C, the “Additional Property”), which is planned to be developed with approximately 300 new apartments named 4 on the Line; and
WHEREAS, the City further agreed under Ordinance No. 3009-2019 that the Developer may request the TIF to be amended or readopted to allow for more than one 30-year exemption term or phase; and
WHEREAS, the City will remove the undeveloped parcels in the Grandview Crossing TIF (the “Undeveloped Parcels” together with the Additional Property, the “GVX II Parcels” and each individually, a “GVX II Parcel”), and the GVX II Parcels will be used to create a new TIF pursuant to R.C. Section 5709.40(B) (the “Grandview Crossing II TIF”); and
WHEREAS, R.C. Sections 5709.40, 5709.42, and 5709.43 (the “TIF Statutes”) authorize the legislative authority of a municipal corporation, by ordinance, to declare the improvements to certain parcels of real property located within the municipal corporation to be a public purpose and exempt from taxation, require the owner of each parcel to make service payments in lieu of taxes, provide for the distribution of the applicable portion of those service payments in lieu of taxes to the relevant school districts, establish a municipal public improvement tax increment equivalent fund for the deposit of the remainder of the service payments in lieu of taxes and payments from such TIF fund; and
WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to amend Ordinance No. 3009-2019 to remove the Undeveloped Parcels and thereafter exempt from taxation one hundred percent (100%) of the improvements to each of the GVX II Parcels as permitted and provided for in the TIF Statutes for a concurrent period of up to thirty (30) years for all of the GVX II Parcels and to simultaneously direct and require the current and future owner(s) of each of the GVX II Parcels (each such owner individually, an “Owner,” and collectively, the “Owners”) to make annual service payments in lieu of taxes, including any penalties and interest (collectively, the “Service Payments”), in the same amount as they would have made in real property tax payments but for the exemption provided by this Ordinance; and
WHEREAS, the City has determined that a portion of the Service Payments shall be paid directly to the Columbus City School District (the “School District”) in an amount equal to the real property taxes that the School District would have been paid if the improvements to each of the GVX II Parcels located within that School District had not been exempted from taxation pursuant to this Ordinance; and
WHEREAS, pursuant to R.C. Section 5709.43, this Council has determined to establish a municipal public improvement tax increment equivalent fund in which there shall be deposited the remaining non-school Service Payments distributed to the City from the Grandview Crossing II TIF as provided herein; and
WHEREAS, notice of this proposed Ordinance has been delivered to the Board of Education of the School District in accordance with and within the time periods prescribed in R.C. Sections 5709.40 and 5709.83; and
WHEREAS, Ordinance No. 3128-2019 authorized the Director of the Department of Development (together with his or her designee, the “Director”) to execute and deliver the Tax Increment Financing and Cooperative Agreement dated June 1, 2020 (the “Original Agreement”) by and among the City, the Grandview Crossing Community Authority, and 810 Grandview LLC and appropriated and authorized expenditure of the Grandview Crossing TIF funds for the purposes set forth in the Original Agreement; and
WHEREAS, it is necessary and appropriate to authorize the Director, on behalf of the City, to enter into the first amendment to the Original Agreement (the “First Amendment” and together with the Original Agreement, the “TIF Agreement”) to allow for the non-school Service Payments to be pledged to the reimbursement of certain public infrastructure improvements including but not limited to those in the Original Agreement (the “Public Infrastructure Improvements”); and
WHEREAS, it has become necessary in the usual daily operation of the Department of Development to appropriate and authorize the expenditure and transfer of the non-school Service Payments and any monies deposited into the TIF Fund described herein to the Grandview Crossing Community Authority, or its designee, pursuant to the TIF Agreement; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Grandview Crossing TIF Ordinance Amendment. That this Council finds and determines that amending Ordinance No. 3009-2019 is in furtherance of and supports the City’s commitments in the EDA and Ordinance No. 3009-2019. Exhibit A to Ordinance No. 3009-2019 is hereby repealed and replaced with Exhibit A attached hereto to remove the Undeveloped Parcels from the Grandview Crossing TIF to then add the GVX II Parcels to the new Grandview Crossing II TIF established by this Ordinance. Exhibit A attached hereto, which repeals and replaces Exhibit A to Ordinance No. 3009-2019, also modifies which “Parcels,” as defined in Ordinance No. 3009-2019, of the Grandview Crossing TIF are incorporated into each exemption phase of the Grandview Crossing TIF for purposes of Section 2 of Ordinance No. 3009-2019 and any other applicable section therein. This Council finds and determines that Sections 2 Ordinance No. 3009-2019 is hereby amended to read as provided below, with new language underlined and deletions stricken:
Section 2. Authorization of TIF Exemption. This Council hereby finds and determines that one hundred percent (100%) of the increase in the assessed value of each Parcel subsequent to the acquisition of that Parcel by the City (which increase in assessed value is hereinafter referred to as the “Improvement” and is the “improvement” as defined in Section 5709.41(A) of the Ohio Revised Code), is hereby declared to be a public purpose and exempt from taxation for a period commencing on January 1 of the tax year in which an Improvement due to a new building would first appear on the tax list and duplicate for each separatesuch Parcel, with the exception of Franklin County Parcel Nos. 010-307679 and 010-303815 commencing together on January 1 of tax year 2027, and all Parcels ending on the earlier of (a) thirty years after sucheach Parcel’s respective commencement or (b) the date on which the City can no longer require service payments in lieu of taxes, all in accordance with the requirements of the TIF Statutes. The Parcels are intended to be grouped into four separate phases, as depicted in Exhibit A, with each phase having a term of up to thirty years. Notwithstanding any other provision of this Ordinance, the exemption granted pursuant to Section 2 and the payment obligations established pursuant to Section 3 of this Ordinance are subordinate to other tax exemptions applicable to the Improvement approved by the City pursuant to Section 3735.65 et. seq. (community reinvestment area) or 5709.61 et. seq. (enterprise zone) of the Ohio Revised Code. If requested by the Owner of the Parcels, the TIF will be amended or re-adopted to allow for the full thirty year exemption period commencing for tax year 2022 for the Parcels located in Phase 1 and commencing for tax year 2025 for the Parcels in Phase 2 as provided in the EDA and TIF and Cooperative Agreement.
Section 2. No Other Modifications. That except as provided herein, all provisions of Ordinance No. 3009-2019 shall remain in full force and effect; it is the intent of City Council that Ordinance No. 3009-2019 and this Ordinance be construed together as a single instrument, as appropriate.
Section 3. Parcels of the Grandview Crossing II TIF. That the GVX II Parcels, as currently or subsequently configured, subject to this Ordinance are identified and depicted on Exhibit C. Pursuant to the TIF Statutes, the GVX II Parcels will be included in a new tax increment financing area known hereafter as the Grandview Crossing II TIF the boundaries of which shall correspond with the boundary of, and shall include, the GVX II Parcels.
Section 4. Exemption. That pursuant to R.C. Section 5709.40(B), this Council hereby finds and determines that one-hundred percent (100%) of the increase in assessed value of the GVX II Parcels (which increase in assessed value is hereinafter referred to as the “Improvement” as defined in R.C. Section 5709.40(A)) is hereby declared to be a public purpose and exempt from taxation for a concurrent period commencing on January 1st of tax year 2028 (for Service Payments to be first collected in 2029) and ending on the earlier of: (a) thirty (30) years after such commencement or (b) the date on which the Improvement ceases to be a public purpose, all in accordance with the requirements of the TIF Statutes (the “TIF Exemption”). The TIF Exemption provided by this Ordinance is subordinate to any exemption for a GVX II Parcel granted pursuant R.C. Sections 3735.65 et. seq. (community reinvestment area), R.C. Sections 5709.61 et. seq. (enterprise zone) and R.C. Section 5709.08 (government and public property) (collectively, the “Authorized Superior Exemptions”). In accordance with R.C. Section 5709.911(B), by this duly enacted Ordinance, this Council provides its duly authorized written consent to any Authorized Superior Exemptions to the GVX II Parcels applied for after the TIF Exemption.
Section 5. Service Payments. That, subject to the Authorized Superior Exemptions, as provided in R.C. Section 5709.42, each Owner and collectively the Owners are hereby required to make the Service Payments with respect to the Improvement allocable to each GVX II Parcel to the Franklin County Treasurer or its designee on or before the final dates for payment of real property taxes. The Service Payments will be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and collected against that Improvement if it were not exempted from taxation pursuant to this Ordinance. The Service Payments, and any other payments with respect to each Improvement that are received in connection with the reduction required by R.C. Sections 319.302, 321.24, 323.152 and 323.156, as the same may be amended from time to time, or any successor provisions thereto as the same may be amended from time to time (the “Property Tax Rollback Payments”), will be deposited and distributed in accordance with this Ordinance.
Section 6. TIF Fund. That this Council establishes, pursuant to and in accordance with the provisions of R.C. Section 5709.43, the Grandview Crossing II Municipal Public Improvement Tax Increment Equivalent Fund (the “TIF Fund”) into which the appropriate Service Payments and Property Tax Rollback Payments collected with respect to the GVX II Parcels and not required pursuant to this Ordinance to be distributed to the School District will be deposited to the City. The TIF Fund will be maintained in the custody of the City. The City may use amounts deposited into the TIF Fund only for the purposes authorized in the TIF Statutes and this Ordinance (as it may be amended from time to time). The TIF Fund will remain in existence so long as the Service Payments and Property Tax Rollback Payments are collected and used for the aforesaid purposes, after which time the TIF Fund will be dissolved and any surplus funds remaining therein transferred to the City's General Fund, all in accordance with R.C. Section 5709.43.
Section 7. Public Infrastructure Improvements. That this Council hereby designates the Public Infrastructure Improvements described on Exhibit B and any other public infrastructure improvements hereafter designated by ordinance as public infrastructure improvements made, to be made, or in the process of being made that directly benefit, or that once made, will directly benefit the GVX II Parcels.
Section 8. Distributions; Payment of Costs. That pursuant to the TIF Statutes, the Franklin County Treasurer is requested to distribute the Service Payments and Property Tax Rollback Payments as follows:
a. To the School District, an amount equal to the amount the School District would otherwise receive as real property tax payments (including the applicable portion of any Property Tax Rollback Payments) derived from the Improvement to each GVX II Parcel if the Improvement had not been exempted from taxation pursuant to this Ordinance.
b. To the City, all remaining amounts for further deposit into the TIF Fund for payment of costs of the Public Infrastructure Improvements, including, without limitation, debt charges on any notes, bonds, securities, or loans undertaken to pay or to reimburse financing costs or costs of those Public Infrastructure Improvements.
All distributions required under this Section are to be made at the same time and in the same manner as real property tax distributions.
Section 9. Further Authorizations. That this Council hereby authorizes the Director, the City Clerk, or other appropriate officers of the City (or each’s designee) to deliver a copy of this Ordinance to the Ohio Development of Development and to make such arrangements as are necessary and proper for collection of the Service Payments and Property Tax Rollback Payments. This Council further authorizes the Director, the City Clerk, the City Attorney, or other appropriate officers of the City (or each’s designee) to prepare and sign all agreements and instruments and to take any other actions as may be appropriate to implement this Ordinance.
Section 10. TIRC. That the City’s Tax Incentive Review Council (“TIRC”) shall review annually all exemptions from taxation resulting from the declarations set forth in this Ordinance and any other matters as may properly come before the TIRC, all in accordance with R.C. Section 5709.85.
Section 11. First Amendment. That the Director, on behalf of the City, is hereby authorized to enter into the First Amendment by and among the City, the Grandview Crossing Community Authority, and 810 Grandview 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 and shall be evidenced conclusively by the written execution and delivery thereof.
Section 12. Appropriation and Expenditure. That the Service Payments and Property Tax Rollback Payments to be deposited into the TIF Fund created by this Ordinance shall be 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 authorized to make payments to the Grandview Crossing Authority, or its designee, from the TIF Fund in accordance with the TIF Agreement upon order of the Director and that no order shall be drawn or money paid except by voucher, the form of which shall be approved by the City Auditor.
Section 13. City Fees. That the City Auditor is authorized to make annual transfers of $5,000 for each TIF under the TIF Agreement from the Service Payments and Property Tax Rollback Payments in the TIF Fund to the Business Tax Incentive Fund (Fund 2229) and funds in the Grandview Crossing TIF Fund (7475), subject to the authorization of the Director, for the City’s TIF Administrative / Monitoring Fee in accordance with the TIF Agreement and Ordinance No. 1837-2025.
Section 14. Account Codes. That the City Auditor is authorized to establish such accounting codes, as necessary, to make any accounting changes to revise the funding source for all agreements, contracts, or modifications associated with this Ordinance or the transactions contemplated by the TIF Agreement.
Section 15. Balances. That the City Auditor is authorized to transfer the unencumbered balance in a project account or subfund to the unallocated balance account within the same fund upon receipt of certification by the Director of the Department administering said project that the project has been completed and the monies are no longer required for said project.
Section 16. Effective Date. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.