Explanation
Background: Ordinance No. 2636-2022, passed by City Council on October 10, 2022 rezoned property generally located at 280 Alton Darby Creek Road on the east side of Alton Darby Creek Road about ±1,400 feet north of W. Broad Street (Franklin County Tax ID parcel No. 470-318353, the “Developer Property”). In 2023, Redwood Galloway Alton Darby Creek Road OH P1 LLC (the “Developer”) purchased the ±42.22 acres encompassing the Developer Property in order to invest approximately $28.25 million to construct about two-hundred seventeen (217) multi-family apartment units. As the rezoned Developer Property is within the City’s area of the Big Darby Accord Watershed Master Plan (2006), the Developer is required to assist implementation of additional public revenue generating programs on the Developer Property for regionally beneficial public infrastructure improvements and Big Darby Accord Watershed Master Plan (2006) purposes consistent with Resolution No. 0216X-2008 adopted by Columbus City Council on April 20, 2009 (the “Big Darby Revenue Program”). Pursuant to Ordinance No. 1501-2023 passed by City Council on June 12, 2023, the Director of the Department of Development entered into the Big Darby - Redwood Development Agreement dated July 28, 2023 (the “Big Darby Agreement”), that has since been assigned to the Developer, to outline the plans and respective commitments of the City and the Developer for the fulfillment of Big Darby Revenue Program including establishing a new tax increment financing (TIF) area for the Developer Property (the “Alton Darby TIF”).
This Ordinance establishes the Alton Darby TIF under Ohio Revised Code Section 5709.40(B). The Alton Darby TIF provides for a ninety-five percent (95%) exemption from real property taxation on improvements to the parcels within the Alton Darby TIF for a not more than a thirty-year coextensive period for all parcels within the Alton Darby TIF. Columbus City Schools will receive, in the same manner as usual, all amounts that they would have received in real property taxes had the tax exemption not been granted. Annual service payments in lieu of taxes will be made by the owner(s) of each parcel with respect to the exempted improvements of the Alton Darby TIF parcels. The applicable portion of those 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 be used to finance public infrastructure improvements directly benefiting the Alton Darby TIF parcels. The Department of Development will submit subsequent legislation to City Council for the appropriation and expenditure of the non-school service payments for the public infrastructure improvements in accordance with authorized agreements.
Fiscal Impact: No funding is required for this legislation. The City is foregoing ninety-five percent (95%) of the real property tax revenue that it would have received from development on the Alton Darby TIF parcels. Instead, the non-school portion of that revenue will be diverted to the TIF fund to support public infrastructure improvements.
Title
To create the Alton Darby TIF encompassing property within the area of the Big Darby Accord Watershed Master Plan (2006) and the City at approximately 280 Alton Darby Creek Road (Parcel No. 470-318353); to declare improvements to those parcel(s) to be a public purpose and exempt from real property taxation; to require the owner(s) of those parcel(s) 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; and to establish a municipal public improvement tax increment equivalent fund for the deposit of the remainder of those non-school service payments. ($0.00)
Body
WHEREAS, Redwood Galloway Alton Darby Creek Road OH P1 LLC (the “Developer”) purchased an approximately 42.22-acre site generally located at 280 Alton Darby Creek Road on the east side of Alton Darby Creek Road about ±1,400 feet north of W. Broad Street as depicted on Exhibit A attached hereto (Franklin County Tax ID parcel No. 470-318353, the “Developer Property”); and
WHEREAS, the Developer is investing about $28.25 million to construct on the Developer Property 217 multi-family apartment units with appropriate associated amenities; and
WHEREAS, pursuant to Resolution No. 0216X-2008 adopted by City Council on April 20, 2009, private developments within the City’s area of the Big Darby Accord Watershed Master Plan (2006), such as the Developer Property, are required to assist the City to implement additional public revenue generating programs (the “Big Darby Revenue Program”); and
WHEREAS, the Big Darby Revenue Program may finance regionally beneficial public infrastructure improvements and Big Darby Accord Watershed Master Plan (2006) purposes identified in Exhibit B attached hereto (collectively, the "Public Infrastructure Improvements" and each a "Public Infrastructure Improvement"); and
WHEREAS, pursuant to Ordinance No. 1501-2023 passed by Council on June 12, 2023, the Director of the Department of Development entered into the Big Darby - Redwood Development Agreement dated July 28, 2023 (the “Big Darby Agreement”) that has since been assigned to the Developer; and
WHEREAS, the Big Darby Agreement outlines the plans and respective commitments of the City and the Developer to implement a new tax increment financing area over the Developer Property (the “Alton Darby TIF”) to finance the Public Infrastructure Improvements; and
WHEREAS, Ohio Revised Code (“R.C.”) Sections 5709.40, 5709.42, and 5709.43 (collectively, the “TIF Statutes”) authorize this Council, by ordinance, to declare the improvement to parcels of real property located within the City 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 such service payments to the subjected school districts and the City, establish a municipal public improvement tax increment equivalent fund for the deposit of those non-school service payments, and specify the purposes for which money in that fund will be expended; and
WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to establish the Alton Darby TIF to exempt from taxation ninety-five percent (95%) of the improvements to each parcel of real property within the Alton Darby TIF (collectively the “Parcels” and each a “Parcel”) as permitted and provided in R.C. Section 5709.40(B) for up to a thirty (30) year coextensive period for all Parcels and to simultaneously direct and require the current and future owners of each Parcel (each individually an “Owner” and collectively the “Owners”) to make annual payments in lieu of taxes, including any penalties and interest (collectively, the “Service Payments”), in the same amount as they would have made real property tax payments but for the exemptions provided by this Ordinance; and
WHEREAS, in accordance with the Big Darby Revenue Program, the five percent (5%) of the real property taxes of the improvements to each Parcel not exempted from taxation pursuant to this Ordinance will be distributed directly to the levy agencies; and
WHEREAS, the City has determined that the applicable portion of the Service Payments shall be paid directly to Columbus City Schools (the “School District”) in an amount equal to the real property taxes that the School District would have been paid if the improvement to each Parcel located within the School District had not been exempt from taxation pursuant to this Ordinance; and
WHEREAS, pursuant to R.C. Section 5709.43(A), this Council has determined to establish a municipal public improvement tax increment equivalent fund in which there shall be deposited the appropriate remaining non-school Service Payments distributed to the City 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 by R.C. Sections 5709.40 and 5709.83, respectively; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Parcels and Creation of TIF Area. That the Parcels, and each individual Parcel as currently or subsequently configured, subject to this Ordinance are identified and depicted on Exhibit A. Pursuant to the TIF Statutes, the Parcels will be included in a new tax increment financing area known hereafter as the Alton Darby TIF the boundaries of which shall correspond with the boundary of, and shall include, the Parcels.
Section 2. 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 Parcels.
Section 3. Exemption. That pursuant to R.C. Section 5709.40(B), this Council hereby finds and determines that ninety-five percent (95%) of the increase in assessed value of each Parcel subsequent to the effective date of this Ordinance (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 coextensive period for all Parcels, which commences contemporaneously for all Parcels with the first tax year that begins after the effective date of this Ordinance and in which an Improvement first appears on the tax list and duplicate of real and public utility property and ending on the earlier of: (a) thirty (30) years after such 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 “TIF Exemption”). The TIF Exemption provided by this Ordinance is subordinate to any exemption for a Parcel granted pursuant to R.C. Section 3735.65 et. seq. (community reinvestment area), R.C. Section 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 Parcels applied for after the TIF Exemption.
Section 4. Service Payments. 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 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 exempt 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 5. TIF Fund. This Council establishes, pursuant to and in accordance with the provisions of R.C. Section 5709.43, the Alton Darby 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 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). 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 6. Distributions; Payment of Costs. Pursuant to the TIF Statutes, the 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 Parcel if the Improvement had not been exempt 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 or bonds issued to pay or 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 7. Further Authorizations. This Council hereby authorizes the Director of the Department of Development, 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 of the Department of Development, 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 8. TIRC. 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 9. Effective Date. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.