Explanation
Background: The City Department of Development is proposing the establishment of three residential tax increment financing (TIF) incentive districts in the Gay Street neighborhood in the City pursuant to Section 5709.40(C) of the Ohio Revised Code. The attached Ordinance establishes those residential incentive districts and provides for a 100% exemption from real property taxation on all residential development within each incentive district for a period of not more than 30 years. The Columbus City School District will receive, in the same manner as usual, all amounts that it would have received in real property taxes had that tax exemption not been granted. Annual service payments in lieu of taxes will be made with respect to residential improvements to the TIF parcels. The applicable portion of those service payments will be distributed directly to the Columbus City School District, with the remaining non-school portion of those service payments paid to the City for deposit into the TIF fund established in the attached Ordinance. The money in the TIF fund will be used to fund public improvements benefiting or serving the incentive districts. The attached Ordinance also amends Ordinance No. 0973-2008 passed by the Columbus City Council on July 7, 2008.
Fiscal Impact: No City funding is required for this legislation.
Title
To create three residential tax increment financing incentive districts encompassing certain parcels of real property; to declare improvements to the parcels within each incentive district to be a public purpose and exempt from real property taxation; 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 School District; to establish a municipal public improvement tax increment equivalent fund for the deposit of the remainder of those service payments; to specify the public infrastructure improvements to be made that directly benefit or serve parcels in the incentive districts; to amend Ordinance No. 0973-2008 passed by the Columbus City Council on July 7, 2008; and to declare an emergency.
Body
WHEREAS, Sections 5709.40(C), 5709.42 and 5709.43 of the Ohio Revised Code (collectively, the "TIF Statutes") authorize this Council, by ordinance, to create one or more incentive districts within the corporate boundaries of the City of Columbus, Ohio (the "City"), and declare the improvement to each parcel of real property located within each incentive district to be a public purpose and exempt from taxation, require the owner of each parcel to make service payments in lieu of taxes, require the distribution of the applicable portion of those service payments to the city, local or exempted village school district, establish a municipal public improvement tax increment equivalent fund for the deposit of the remainder of those service payments, and specify public infrastructure improvements made, to be made or in the process of being made that directly benefit or serve, or that once made will directly benefit or serve, parcels in the incentive districts; and
WHEREAS, this Council has determined to create the following residential incentive districts:
• One Neighborhood Incentive District No. 1
• One Neighborhood Incentive District No. 2
• One Neighborhood Incentive District No. 3
(each individually an "Incentive District" and collectively the "Incentive Districts"), the boundaries of which shall be coextensive with the boundary of, and shall include, the parcels of real property specifically identified and depicted in Exhibit A attached hereto (with each of those parcels referred to herein individually as a "Parcel" and collectively as the "Parcels"); and
WHEREAS, by Ordinance No. 1016-2009 passed on July 27, 2009, this Council approved an Economic Development Plan encompassing the Incentive Districts (the "Economic Development Plan"), which Economic Development Plan is on file in the City Department of Development; and
WHEREAS, the City Engineer has certified to this Council that (i) each Incentive District is less than 300 acres in size and is enclosed by a contiguous boundary, and (ii) the public infrastructure serving each Incentive District is inadequate to meet the development needs of the Incentive District as evidenced by the Economic Development Plan; and
WHEREAS, the City anticipates that approximately 296 new residential units will be constructed within the Incentive Districts (collectively, the "Project"); and
WHEREAS, by Ordinance No. 1345-02 passed on July 29, 2002 (the "CRA Ordinance"), this Council granted for each Parcel a net 10-year, 75% community reinvestment area tax exemption for new residential construction pursuant to Sections 3735.65 through 3735.70 of the Ohio Revised Code by granting each Parcel a 15-year, 100% community reinvestment area tax exemption for new residential construction (the "CRA Exemption") coupled with a requirement that the owners of each Parcel subject to the CRA Exemption make to the City service payments in lieu of taxes during the first ten (10) years of the CRA Exemption for that Parcel (the "10-year CRA Period") equal to the value of 25% of the CRA Exemption (the "25% CRA PILOT") and service payments in lieu of taxes during the final five (5) years of the CRA Exemption for that Parcel (the "Remaining CRA Period") equal to the value of 100% of the CRA Exemption (the "100% CRA PILOT"); and
WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to exempt from taxation one hundred percent (100%) of the residential improvement to each Parcel as permitted and provided in Section 5709.40(C) of the Ohio Revised Code for up to thirty (30) years (the "TIF Exemption") and to simultaneously direct and require the current and future owners of each Parcel (each such owner individually, an "Owner," and all such owners collectively, the "Owners") to make annual service payments in lieu of real property tax payments in the same amount as they would have made real property tax payments except for the exemption provided by this Ordinance; provided that the TIF Exemption and the obligation to make service payments in lieu of taxes pursuant to this Ordinance are subject and subordinate to the CRA Exemption for the 10-year CRA Period and the related 25% CRA PILOT but take precedence over the CRA Exemption for the Remaining CRA Period and the related 100% CRA PILOT; 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 School District would have been paid if the improvement to each Parcel located within that School District had not been exempt from taxation pursuant to this Ordinance; and
WHEREAS, pursuant to Section 5709.43(A) of the Ohio Revised Code, this Council has determined to establish a municipal public improvement tax increment equivalent fund for the Incentive Districts, in which there shall be deposited the remaining Service Payments distributed to the City as provided herein; and
WHEREAS, this Council has determined to provide for the construction of any public infrastructure improvements described in Exhibit B attached hereto (the "Public Infrastructure Improvements"), which Public Infrastructure Improvements, once made, will directly benefit or serve parcels in the Incentive Districts; 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 Sections 5709.40 and 5709.83 of the Ohio Revised Code; and
WHEREAS, notice of this proposed Ordinance has been delivered to the Franklin County Board of Commissioners in accordance with and within the time periods prescribed in Section 5709.40(E) of the Ohio Revised Code; and
WHEREAS, an emergency exists in that this Ordinance is required to be immediately effective in order to facilitate the development of the Parcels, such immediate action being necessary for the preservation of the public health, peace, property and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Amendment of Ordinance No. 0973-2008; Within 25% Limitation; Incentive District Projects; Creation of Incentive Districts. Exhibit A to Ordinance No. 0973-2008 is hereby amended to remove all the Parcels included in Exhibit A to this Ordinance and the Department of Development shall prepare a substitute Exhibit A to that Ordinance No. 0973-2008 reflecting those deletions. This Council finds and determines that the sum of (i) the taxable value of real property in the Incentive Districts for tax year 2008 and (ii) the taxable value of all real property in the City that would have been taxable for tax year 2008 were it not for the fact that the property was in an existing incentive district approved by this Council and therefore exempt from taxation, does not exceed twenty-five percent of the taxable value of real property in the City for tax year 2008. This Council further finds and determines that the Project will place additional demand on the Public Infrastructure Improvements. Pursuant to the TIF Statutes, this Council hereby creates each of the Incentive Districts, the boundaries of which shall be coextensive with the boundary of, and shall include, the Parcels specifically identified and depicted in Exhibit A.
Section 2. Authorization of Tax Exemption. Pursuant to and in accordance with the provisions of Section 5709.40(C) of the Ohio Revised Code, this Council hereby declares that one hundred percent (100%) 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 Section 5709.40(A) of the Ohio Revised Code) is a public purpose and shall be exempt from taxation for a period coextensive with the life of the Incentive District containing that Parcel, which life commences for each Incentive District with the first tax year that begins after the effective date of this Ordinance and in which an Improvement would first appear on the tax list and duplicate of real and public utility property for a Parcel within that Incentive District were it not for the TIF Exemption and ends 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. Pursuant to Section 5(e) of the CRA Ordinance, the TIF Exemption and the obligation to make service payments in lieu of taxes pursuant to this Ordinance are subject and subordinate to the CRA Exemption for the 10-year CRA Period and the related 25% CRA PILOT but take precedence over the CRA Exemption for the Remaining CRA Period and the related 100% CRA PILOT.
Section 3. Service Payments and Property Tax Rollback Payments. Subject to the precedence of the CRA Exemption for the 10-year CRA Period and the related 25% CRA PILOT, and pursuant to Section 5709.42 of the Ohio Revised Code, this Council hereby directs and requires the Owner of each Parcel to make annual service payments in lieu of taxes with respect to the Improvement allocable thereto to the Franklin County Treasurer (the "County Treasurer") on or before the final dates for payment of real property taxes. Each service payment in lieu of taxes, including any penalties and interest at the then current rate established under Sections 323.121 and 5703.47 of the Ohio Revised Code (collectively, the "Service Payments"), shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and payable against the Improvement if it were not exempt from taxation pursuant to Section 2 of this Ordinance. The Service Payments, and any other payments with respect to each Improvement that are received by the County Treasurer in connection with the reduction required by Sections 319.302, 321.24, 323.152 and 323.156 of the Ohio Revised Code, 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"), shall be allocated and distributed in accordance with Section 5 of this Ordinance. This Council further hereby authorizes and directs appropriate officers of the City to make such arrangements as are necessary and proper for collection of the Service Payments from the Owners, including the preparation and filing of any necessary exemption applications.
Section 4. Tax Increment Equivalent Fund. This Council hereby establishes, pursuant to and in accordance with the provisions of Section 5709.43 of the Ohio Revised Code, the One Neighborhood Municipal Public Improvement Tax Increment Equivalent Fund (the "TIF Fund"), into which the City shall deposit the Service Payments and Property Tax Rollback Payments collected with respect to the Parcels and not required to be distributed to the School District, Franklin County or certain other agencies pursuant to Section 5 of this Ordinance. This Council further establishes the following subfunds within the TIF Fund for the deposit of those Service Payments collected from the corresponding Incentive District:
• One Neighborhood Incentive District No. 1 Subfund
• One Neighborhood Incentive District No. 2 Subfund
• One Neighborhood Incentive District No. 3 Subfund
The TIF Fund shall be maintained in the custody of the City and shall receive all distributions to be made to the City pursuant to Section 5 of this Ordinance. Those Service Payments and Property Tax Rollback Payments received by the City with respect to the Improvement to each Parcel and so deposited pursuant to Sections 5709.42 and 5709.43 of the Ohio Revised Code shall be used solely for the purposes authorized in the TIF Statutes and this Ordinance. The TIF Fund shall remain in existence so long as such Service Payments and Property Tax Rollback Payments are collected and used for the aforesaid purposes, after which time the TIF Fund shall be dissolved and any surplus funds remaining therein transferred to the City's General Fund, all in accordance with Section 5709.43 of the Ohio Revised Code.
Section 5. Distribution of Funds. Pursuant to the TIF Statutes, the County Treasurer is requested to distribute the Service Payments and the Property Tax Rollback Payments as follows:
(i) to the School District, an amount equal to the amount that School District would otherwise have received as real property tax payments (including the applicable portion of any Property Tax Rollback Payments) derived from the Improvement to the Parcels located within that School District if the Improvement had not been exempt from taxation pursuant to this Ordinance;
(ii) to Franklin County or the agencies specified under Section 5709.40(F) of the Ohio Revised Code, any amounts payable to those entities pursuant to Section 5709.40(E) or 5709.40(F) of the Ohio Revised Code; and
(iii) to the City, all remaining amounts for further deposit into the TIF Fund for payment of costs of the Public Infrastructure Improvements.
The County Treasurer is further requested to identify the Service Payments and the Property Tax Rollback Payments by their corresponding Incentive District and to provide the City with the Incentive Districts' respective distributions on the Service Payment settlement sheets. All distributions required under this Section 5 are requested to be made at the same time and in the same manner as real property tax distributions.
Section 6. Public Infrastructure Improvements. This Council hereby designates the Public Infrastructure Improvements described in Exhibit B attached hereto, and any other public infrastructure improvements hereafter designated by ordinance as public infrastructure improvements, as public infrastructure improvements made, to be made or in the process of being made by the City that directly benefit or serve, or that once made will directly benefit or serve, parcels in the Incentive Districts.
Section 7. Non-Discriminatory Hiring Policy. In accordance with Section 5709.832 of the Ohio Revised Code, this Council hereby determines that no employer located within the Incentive Districts shall deny any individual employment based solely on the basis of race, religion, sex, disability, color, national origin or ancestry.
Section 8. Further Authorizations. This Council hereby authorizes and directs the Director, the City Clerk or other appropriate officers of the City to make such arrangements as are necessary and proper for collection of the Service Payments from the Owners. This Council further authorizes and directs the Director, the City Clerk or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as may be appropriate to implement this Ordinance.
Section 9. Filings with Ohio Department of Development. Pursuant to Section 5709.40(I) of the Ohio Revised Code, the Clerk of Council is hereby directed to deliver a copy of this Ordinance to the Director of Development of the State of Ohio within fifteen (15) days after its effective date. Further, on or before March 31 of each year the exemption set forth in Section 2 of this Ordinance remains in effect, the Director, Clerk of Council or other authorized officer of the City shall prepare and submit to the Director of Development of the State of Ohio the status report required under Section 5709.40(I) of the Ohio Revised Code.
Section 10. Tax Incentive Review Council. The City of Columbus, Ohio, Tax Incentive Review Council 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 that Council, all in accordance with Section 5709.85 of the Ohio Revised Code.
Section 11. Effective Date. For the 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 force from and after its passage and approval by the Mayor or ten days after the passage if the Mayor neither approves nor vetoes the same.