Explanation
Background: City Council passed Ordinance No. 1237-2015 on June 8, 2015 (the “2015 Ordinance”), creating the Old Dublin Road TIF, which the 2015 Ordinance was subsequently amended to add additional parcels by Ordinance No. 3168-2019 passed on December 16, 2019 (the “2019 Ordinance”). Pursuant to Ordinance No. 1849-2015 passed by City Council on July 13, 2015, the City previously entered into a Tax Increment Financing Agreement with Hallmark Dublin Road, LLC (the “Developer”) dated as of June 14, 2017 (the “Prior TIF Agreement”), and pursuant to Ordinance No. 1503-2017 passed by City Council on June 19, 2017, the City previously entered into a Construction Guaranteed Maximum Reimbursement Agreement with the Developer dated as of June 27, 2017 (the “CGMRA”) with respect to parcels relating to the 2015 Ordinance in order to reimburse the Developer for its portion of the costs of the public sanitary sewer line and water line improvements (the “Old Dublin/Trabue Sanitary Sewer Extension Project,” aka CIP No. 650145-100000 Drawing No. CC-17642), necessary for the development of the Old Dublin Road TIF area created by the 2015 Ordinance. The Developer has now completed its private development of approximately 270-unit apartments on Franklin County Auditor Tax Parcel ID No. 560-211803 (the “Private Project”) as well as the Old Dublin/Trabue Sanitary Sewer Extension Project necessary for the Private Project. The City has accepted the Old Dublin/Trabue Sanitary Sewer Extension Project and the Developer’s Cost Certificate, as provided in Section 4 of the Prior TIF Agreement, has been approved by the City in the amount of $1,459,947.93.
In furtherance of the 2015 Ordinance and the Prior TIF Agreement, this Ordinance approves and authorizes a new Tax Increment Financing and Cooperative Agreement by and among the City, the Columbus-Franklin County Finance Authority and the Developer (the “TIF Agreement”) in order for the Columbus-Franklin County Finance Authority to issue bonds to reimburse the Developer’s approved Cost Certificate (after adjusting for any payments and accrued interest that have occurred) provided that the Old Dublin Road TIF revenue generated from the parcels exempted by the 2015 Ordinance is pledged to repaying those bonds. This Ordinance will appropriate and authorize the expenditure of the TIF revenue generated from the parcels added by the 2015 Ordinance pursuant to the Agreement, as well as to enter into a declaration for the imposition of a “minimum service payment obligation” as defined and enacted pursuant to ORC 5709.91 against the Private Project in order to provide additional financing for the repayment of the bonds, which will fully reimburse the Developer for its TIF eligible portion of the Old Dublin/Trabue Sanitary Sewer Extension Project as provided in the Prior TIF Agreement and the CGMRA. Finally, this legislation will authorize the termination of the Prior TIF Agreement pursuant to the terms of the TIF Agreement.
Emergency Justification: Emergency legislation is required to allow for immediate execution of the Tax Increment Financing and Cooperative Agreement and the imposition of a minimum service payment obligation, which is necessary to facilitate the timeliest, commercially reasonable market rate financing of the above-described improvements.
Fiscal Impact: No funding is required for this legislation. The City is appropriating and authorizing the expenditure of TIF revenues generated by the parcels in the Old Dublin Road TIF pursuant to the 2015 Ordinance to be deposited in the Old Dublin Road Municipal Public Improvement Tax Increment Equivalent Fund in accordance with the Tax Increment Financing and Cooperative Agreement.
Title
To appropriate and authorize the expenditures of TIF revenues generated by the parcels added to the Old Dublin Road TIF by Ordinance No. 1237-2015 to be deposited in the Old Dublin Road Municipal Public Improvement Tax Increment Equivalent Fund; to authorize the Director of the Department of Development to execute and deliver a Tax Increment Financing and Cooperative Agreement by and among the City of Columbus, the Columbus-Franklin County Finance Authority, and Hallmark Dublin Road, LLC, and to authorize the Director to execute a declaration for the imposition a “minimum service payment obligation” pursuant to Ohio Revised Code 5709.91, all to fully reimburse the Developer pursuant to the Tax Increment Financing and Cooperative Agreement for the TIF eligible portion of the public sanitary sewer line and water line improvements (Old Dublin/Trabue Sanitary Sewer Extension Project, aka CIP No. 650145-100000 Drawing No. CC-17642) made by the Developer in the Old Dublin Road TIF area; to authorize termination of the existing Tax Increment Financing Agreement with Hallmark Dublin Road, LLC dated as of June 14, 2017; and to declare an emergency.
Body
WHEREAS, pursuant to Ordinance No. 1237-2015 passed June 8, 2015 (the “2015 Ordinance”), this Council created the Old Dublin Road Tax Increment Financing (TIF) Area and the Old Dublin Road Public Improvement Equivalent Fund (the “TIF Fund”) under Ohio Revised Code Sections 5709.40 to 4709.43, which the 2015 Ordinance was subsequently amended to add additional parcels by Ordinance No. 3168-2019 passed on December 16, 2019 (the “2019 Ordinance”); and
WHEREAS, pursuant to Ordinance No. 1849-2015 passed by City Council on July 13, 2015, this Council appropriated and authorized the expenditure of the money deposited into the TIF Fund from the parcels in the 2015 Ordinance in accordance with the Tax Increment Financing Agreement by and among the City and Hallmark Dublin Road, LLC (the “Developer”) dated as of June 14, 2017 (the “Prior TIF Agreement”), to reimburse the Developer for public sanitary sewer line and water line improvements (the “Old Dublin/Trabue Sanitary Sewer Extension Project,” aka CIP No. 650145-100000 Drawing No. CC-17642) made by the Developer that are necessary for development in the Old Dublin Road TIF area; and
WHEREAS, pursuant to Ordinance No. 1503-2017 passed by City Council on June 19, 2017, the City previously entered into a Construction Guaranteed Maximum Reimbursement Agreement with the Developer dated June 27, 2017 (the “CGMRA”) to reimburse the Developer $1,009,729.00 from capital dollars in the Sanitary Sewer General Obligation Bond Fund 6109 for the Old Dublin/Trabue Sanitary Sewer Extension Project and to reimburse the Developer the additional costs of the Old Dublin/Trabue Sanitary Sewer Extension Project from the TIF Fund pursuant to the Prior TIF Agreement; and
WHEREAS, the Developer has now completed its private development of approximately 270-unit apartments on Franklin County Auditor Tax Parcel ID No. 560-211803 (the “Private Project”) as well as the Old Dublin/Trabue Sanitary Sewer Extension Project necessary for the Private Project and development of the Old Dublin Road TIF area; and
WHEREAS, the City has accepted the Old Dublin/Trabue Sanitary Sewer Extension Project and the Developer’s Cost Certificate, as provided in Section 4 of the Prior TIF Agreement, has been approved by the City in the amount of $1,459,947.93; and
WHEREAS, the Columbus-Franklin County Finance Authority is willing to finance the reimbursement due to the Developer under the Prior TIF Agreement through the Finance Authority’s Central Ohio Regional Bond Fund, provided that the City and the Developer each (a) approve and enter into a Tax Increment Financing and Cooperative Agreement with the Finance Authority that replaces the Prior TIF Agreement to be terminated and (b) enter into a declaration to impose a “minimum service payment obligation” as defined and enacted pursuant to ORC 5709.91 on the Private Project within the Hallmark TIF Parcels shown on Exhibit A hereto, all to ensure that sufficient service payments generated by the 2015 Ordinance parcels from the Old Dublin Road TIF are available to pay debt service on the Finance Authority’s Bond Fund Bonds issued to reimburse the Developer; and
WHEREAS, an emergency exists in the usual daily operations of the Department of Development in that it is immediately necessary to authorize the Director to enter into the foregoing Tax Increment Financing and Cooperative Agreement and declaration for the preservation of the public health, peace, property, and safety, that preservation being related to securing the timeliest, commercially reasonable market rate financing of the reimbursement of costs of the Old Dublin/Trabue Sanitary Sewer Extension Project in order to achieve attractive interest rates, reduce the amount of service payments needed to reimburse the Developer, and to create or preserve job opportunities and housing for the citizens of the City; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development for, and in the name of the City, is hereby authorized to execute and deliver the Tax Increment Financing and Cooperative Agreement (the “TIF Agreement”) and a declaration of covenants for the imposition of a “minimum service payment obligation” as defined and enacted pursuant to ORC 5709.91 (the “Declaration”) presently on file with the Director 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 as not being substantially adverse to the City, shall be evidenced conclusively by the execution and delivery of said TIF Agreement and Declaration.
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 TIF Agreement and the Declaration including, but not limited to, being able to levy and have assessed the minimum service payment obligation on the real and public utility tax list and duplicate with the Auditor of Franklin County, Ohio in the manner and amounts and on the property as provided for in the Declaration.
Section 3. That the service payments in lieu of taxes and property tax rollback payments deposited into the Old Dublin Road Public Improvement Tax Increment Equivalent Fund (Fund 7467, or the “TIF Fund”) created by Ordinance No. 1237-2015 (the “2015 Ordinance”) and generated from the Hallmark TIF Parcels pursuant to the 2015 Ordinance as shown on Exhibit A to this Ordinance 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 authorized to make payments to the Columbus-Franklin County Finance Authority or its designee from the TIF Fund in accordance with the TIF Agreement upon order of the Director of Development or his designee 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 4. That the Director, for and in the name of the City, is hereby authorized to terminate the Tax Increment Financing Agreement by and among the City and Hallmark Dublin Road, LLC (the “Developer”) dated as of June 14, 2017 (the “Prior TIF Agreement”) authorized by City Council pursuant to Ordinance No. 1849-2015 upon execution of the TIF Agreement and the payment to the Developer pursuant to the TIF Agreement, and the Prior TIF Agreement shall be of no further force or effect, nor shall the TIF Fund be appropriated and authorized for expenditure pursuant to Ordinance No. 1849-2015 and the Prior TIF Agreement upon termination of the Prior TIF Agreement.
Section 5. That the City Auditor is authorized to make annual transfers from the TIF Fund (7467) to BTI Fund 2229, subject to the authorization of the Director, for the City TIF Administrative Fee, as that term is described in the TIF Agreement and is currently $5,000 per each outstanding TIF included in the TIF Agreement pursuant to this Ordinance and Ordinance 3221-2018.
Section 6. 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.