Explanation
BACKGROUND:West Edge Business Center has been in operation for 3 years since the former Sullivant Gardens housing site was acquired and converted for business use. It is anticipated that up to 1,200 jobs will be located at the site at the end of its 7 year build out period.
The City of Columbus and Columbus Urban Growth Corporation desire to create a Tax Increment Financing (TIF) District under Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 to pay for certain public infrastructure improvements and to otherwise support the West Edge development while protecting the Columbus City School District from any loss of tax revenues.
The payments in lieu of taxes provides for payment to the Columbus City School District for its portion of service payments, establishes the City Municipal Improvement Tax Equivalent Fund for the deposit of the remainder of service payments and authorizes the Director of Development to execute the Tax Increment Financing and Development Agreement between the City of Columbus and the developer.
FISCAL IMPACT: No funding is required for this legislation.
Title
An Ordinance declaring the improvement to certain parcels of real property to be a public purpose, requiring the owners thereof to make service payments in lieu of taxes, providing for the payment to the Columbus City School District of its portion of those service payments, establishing a municipal public improvement tax equivalent fund for the deposit of the remainder of those service payments with the City and authorizing the Director of the Department of Development to execute a Tax Increment Financing and Development Agreement for infrastructure improvements to benefit the development of West Edge Business Center; and to declare an emergency.
Body
WHEREAS, Ohio Revised Code Section 5709.40(B) authorizes the legislative authority of a municipal corporation, by ordinance, to declare improvements to parcels of real property located in the municipal corporation to be a public purpose; and
WHEREAS, the parcels of real property shown in Exhibit A hereto are located in the State of Ohio, County of Franklin and City of Columbus (collectively, the "Property"); and
WHEREAS, it is anticipated by the City of Columbus (the "City") that the Property will undergo certain "improvements" (as defined in Ohio Revised Code Section 5709.40(A)), including commercial uses and other improvements which may be permitted from time to time under applicable zoning regulations (collectively, the "Project"); and
WHEREAS, the City has determined that such proposed improvements to the Property are or, upon completion, will be a public purpose under Ohio Revised Code Section 5709.40; and
WHEREAS, the City has determined that it is necessary and appropriate and in the best interest of the City to exempt the Property and proposed improvements from taxation as permitted and provided in Ohio Revised Code Section 5709.40(B) and to simultaneously direct and require the current and future owner(s) of parcels of the Property and the Projects thereon to make annual service payments in lieu of taxes to the Franklin County Treasurer on or before the final dates for payment of real property taxes; and
WHEREAS, Ohio Revised Code Section 5709.43(A) requires a municipal corporation that grants a tax exemption under Ohio Revised Code Section 5709.40(B) to establish a municipal public improvement tax increment equivalent fund, by ordinance of its legislative authority, into which the Franklin County Treasurer shall deposit such service payments in lieu of taxes to be received by the City and the City desires to establish that municipal public improvement tax increment equivalent fund to receive such service payments in lieu of taxes; and
WHEREAS, Ohio Revised Code Section 5709.40(D) provides that an ordinance adopted by the legislative authority of a municipal corporation pursuant to Ohio Revised Code Section 5709.40(B) shall designate specific public improvements made, to be made, or in the process of being made by the municipal corporation that directly benefit, or that once made will directly benefit, the parcels of real property located in the municipal corporation and identified in the ordinance; and
WHEREAS, attached hereto as Exhibit B is a description of public improvements for or on behalf of the City that directly benefit or, once made, will directly benefit the Property (collectively, the "Public Improvements"); and
WHEREAS, the City has determined that the proposed improvements to the Property shall, during construction and upon completion, place direct, additional demand on the Public Improvements or, to the extent the Public Improvements have not been constructed, will place direct, additional demand on the Public Improvements when completed; and
WHEREAS, Ohio Revised Code Section 5709.40(B) requires the legislative authority of a municipal corporation to specify, in the ordinance adopted pursuant to Ohio Revised Code Section 5709.40(B), the percentage of the proposed improvements to be exempted from taxation; and
WHEREAS, the City has determined that it is appropriate and in the best interest of the City to exempt 100% of the Property and the proposed improvements from taxation to the extent permitted by Ohio Revised Code Section 5709.40; and
WHEREAS, the City has determined that payments in lieu of real property taxes provided for in Ohio Revised Code Section 5709.42 shall be paid to the Columbus City School District (the "School District") in the amount of the real property taxes that the School District would have been paid if the Improvement (defined in Section 1, below) had not been exempted from taxation pursuant to this Ordinance; and
WHEREAS, the City has determined that it may, from time to time and only when the provision of additional tax incentives will be required to facilitate the development of the Project, designate some or all of the Property as a Community Reinvestment Area (each a "Community Reinvestment Area") within the meaning of Sections 3735.65 through 3735.70 of the Ohio Revised Code (collectively, the "CRA Statute") and provide qualifying structures constructed within any such Community Reinvestment Area with real property tax exemptions pursuant to the terms of the CRA Statute (each qualifying structure is referred to herein as a "CRA Exempted Improvement" for so long and to the extent that it is exempted from real property taxation pursuant to the CRA Statute); and
WHEREAS, the City has determined that it may, from time to time and only when the provision of additional tax incentives will be required to facilitate the development of the Project, cause the creation of certain Enterprise Zones (each an "Enterprise Zone") within the meaning of Sections 5709.61 through 5709.69 of the Ohio Revised Code (collectively, the "Enterprise Zone Statute") and provide qualifying real property located within any such Enterprise Zone with real property tax exemptions pursuant to the terms of the Enterprise Zone Statute (each qualifying real property is referred to herein as an "Enterprise Zone Exempted Property" for so long and to the extent that it is exempted from real property taxation pursuant to the Enterprise Zone Statute); 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 period prescribed in Ohio Revised Code Sections 5709.40(D)(2) and 5709.83; and
WHEREAS, the current and future owner(s) of the Property (each individually an "Owner" and collectively the "Owners") (i) shall be required to make service payments in lieu of the real property tax payments they would have made except for the exemption provided by this Ordinance, (ii) shall prepare and file with the Franklin County Recorder a declaration against the Property which shall be covenants running with the Property and which shall require the current and future owner(s) to make those service payments in lieu of real property tax payments, and (iii) will agree, pursuant to such declaration, that the service payments in lieu of real property taxes shall constitute a lien on the Property having the same priority and effect as the lien on real property taxes; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to create a Tax Increment Financing (TIF) District under Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 to pay for certain public infrastructure improvements and to otherwise support the West Edge development, all for the 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 in accordance with Ohio Revised Code Section 5709.40, the City hereby finds and determines that the increase in the assessed value of the Property subsequent to the effective date of this Ordinance is and shall be a public purpose, which increase in assessed value is hereinafter referred to as the "Improvement," as defined in Ohio Revised Code Section 5709.40(A), but which Improvement shall not include the increase in assessed value of any CRA Exempted Improvement located upon the Property for so long and to the extent that such CRA Exempted Improvement is exempt from real property taxation pursuant to the CRA Statute nor shall the Improvement include the increase in assessed value of any parcel located on the Property for so long and to the extent that such parcel is an Enterprise Zone Exempted Property.
Section 2. That the City hereby exempts 100% of the Improvement from taxation (the "Exemption"), as and when the exemption is claimed and allowed in the manner provided by law, for the period set forth in this Ordinance.
Section 3. That the City hereby directs and requires Owners of the Property to make annual service payments in lieu of real property taxes to the Franklin County Treasurer on or before the final dates for payment of real property taxes. Each payment shall be in the same amount as the real property taxes that would have been charged and payable against the Improvements (after credit for any other payments received by the City under Ohio Revised Code Sections 319.302, 321.24, 323.152 and 323.156, hereinafter referred to as the "Property Tax Rollback Payments") had an exemption for taxation not been granted, and shall otherwise be in accordance with the Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43. Any late payments shall be subject to penalty and bear interest at the then current rate established under Ohio Revised Code Sections 323.121(B)(1) and 5703.47, as the same may be amended from time to time (the payment of penalties and interest, along with the payments in lieu of taxes are collectively referred to herein as the "Service Payments"). The Service Payments and the Property Tax Rollback Payments shall be allocated and deposited in accordance with Sections 5 and 7 of this Ordinance. This Council further hereby authorizes and directs the Director of the Department of Development, the City Auditor, the Director of Law, or other appropriate officers of the City, to make such arrangements as are necessary and proper for collection from the owners of the Service Payments, including the preparation and filing of any necessary exemption applications.
Section 4. The City hereby directs and requires the Owners to prepare and file with the Franklin County Recorder a declaration against the Property which shall be covenants running with the Property and which shall: (i) require the current and future Owners of the Property to make the Service Payments, and (ii) make the current and future Owners acknowledge and agree that the Service Payments are payments in lieu of real property taxes and shall constitute a lien on the Property having the same priority and effect as the lien of real property taxes.
Section 5. In accordance with Ohio Revised Code Sections 5709.40 and 5709.42 and this Ordinance, the Franklin County Treasurer shall make payments to the School District in lieu of the real property taxes it would have received in the amount of the real property taxes that the School District would have received if the Improvement had not been exempted from taxation pursuant to this Ordinance from the Service Payments and any Property Tax Rollback Payments.
Section 6. The Public Improvements described in Exhibit B hereto made, to be made, or in the process of being made, by the City are hereby designated as Public Improvements that directly benefit, or that once made will directly benefit, the Property.
Section 7. The City hereby establishes a Municipal Public Improvement Tax Equivalent Fund (the "Fund") into which shall be deposited all of the Service Payments and any Property Tax Rollback Payments and hereby provides that all such Service Payments and any Property Tax Rollback Payments to be deposited into the Fund shall be used to pay costs of the Public Improvements as defined in Ohio Revised Code Section 133.15(B). The Service Payments and Property Tax Rollback Payments to be paid to the School District pursuant to this Ordinance and Ohio Revised Code Sections 5709.40 and 5709.42 shall be paid directly to the School District by the Franklin County Treasurer. Any expenditure of Service Payments deposited in the Fund is subject to the expenditure restrictions and appropriation requirements of Section 27 through 31 of the Charter of the City. The Fund shall remain in existence so long as Service Payments are collected and used for the aforesaid purposes, after which the Fund shall be dissolved in accordance with Ohio Revised Code Section 5709.43.
Section 8. The Exemption granted in this Ordinance shall commence on the Effective Date of this Ordinance and shall end no later than 30 years from the Effective Date of this Ordinance.
Section 9. Pursuant to Ohio Revised Code Section 5709.40(E), the City Clerk is hereby directed to deliver a copy of this Ordinance to the Director of Development of the State of Ohio within fifteen days after its effective date. Further, and on or before March 31 of each year that the Exemption remains in effect, the City Clerk 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 Ohio Revised Code Section 5709.40(E).
Section 10. The City hereby authorizes the Director of the Department of Development to enter into a Tax Increment Financing and Development Agreement implementing this Ordinance with each Owner.
Section 11. This Council finds and determines that all formal actions of this Council concerning and relating to the passage of this Ordinance were taken in an open meeting of this Council and that all deliberations of this Council that resulted in those formal actions were in meeting open to the public in compliance with the law.
Section 12. That for the reasons stated in the preamble thereto, which is hereby made a part hereof, this ordinance is 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 passage if the Mayor neither approves nor vetoes the same.