Explanation
Background: Ordinance No. 3248-2021 established a tax increment financing (“TIF”) area pursuant to Ohio Revised Code (“R.C.”) Section 5709.40(B) encompassing ±13.886 acres at the northeast corner of Renner Road and Alton Darby Creek Road (the “Sugar Farm 40(B) TIF”). Ordinance No. 3259-2021 established two TIF incentive districts under R.C. Section 5709.40(C). One TIF incentive district encompasses ±242.36 acres north of Renner Road (the “Sugar Farm Incentive District”). Subsequent to the creation of the Sugar Farm 40(B) TIF, but prior to the filing of the exemption application for such TIF, it was determined that the property owner within said TIF recorded a condo declaration and split the parent parcel into about 220 separate condo parcels with a parcel covering each apartment unit. The Franklin County Auditor classifies four or more residential units per parcel as a commercial land use class while classifying three or less residential units per parcel as a residential land use class. Therefore, the property owner’s actions have converted the land use classifications within the Sugar Farm 40(B) TIF from commercial to residential.
Pursuant to R.C. Section 5709.40(B), improvements with respect to a parcel that is used or to be used for residential purposes may be declared a public purpose under that division only if the parcel is located in a blighted area of an impacted city, which the Sugar Farm 40(B) TIF is not in a blighted area. Such requirement for improvements used or to be used for residential purposes does not exist under R.C. Section 5709.40(C). Thus, to ensure the parcels in the Sugar Farm 40(B) TIF meet the requirements under R.C. Section 5709.40, a re-classification of their TIF designation is necessary. This ordinance will repeal Ordinance No. 3248-2021 to dissolve the Sugar Farm 40(B) TIF prior to its exemption application being filed and approved by the State. Since the parcels in the Sugar Farm 40(B) TIF have not generated payments to be remitted to the county treasurer, they are considered “nonperforming parcels” under R.C. Section 5709.40(A)(9). This ordinance will also amend Ordinance No. 3259-2021 to include the nonperforming parcels of the Sugar Farm 40(B) TIF into an expanded Sugar Farm Incentive District pursuant to the same terms and conditions of Ordinance No. 3259-2021. This ordinance will also authorize the City to enter into the First Amendment to the Franklin County Compensation Agreement (Sugar Farm and Renner South Incentive Districts) with Franklin County since the county commissioners objected to notice of this ordinance pursuant to the stipulations of R.C. Section 5709.40(E).
Emergency Justification: Emergency legislation is requested in order to allow the City to immediately file the exemption application on the nonperforming parcels added to the Sugar Farm Incentive District prior to the end of tax year 2025, which if it is not, R.C. 5713.081 specifies that the tax commissioner shall not remit more than three years’ back taxes, penalties, and interest from the date of the application meaning the City would forego tax year 2023 service payments in lieu of taxes necessary to pay down the existing public infrastructure costs that are accruing interest and adding additional expenses to the City.
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 nonperforming parcels added to the Sugar Farm Incentive District. Instead, the portions of that revenue not owed to the schools and other taxing authorities, as required by statute and ordinance, will be diverted to the Sugar Farm TIF Fund.
Title
To repeal Ordinance No. 3248-2021 to dissolve the Sugar Farm 40(B) TIF; to amend Ordinance No. 3259-2021 and the Sugar Farm Incentive District to include the nonperforming parcels of the Sugar Farm 40(B) TIF; to declare improvements to those nonperforming parcels to be a public purpose and exempt from real property taxation; to require the owners of those nonperforming parcels to make service payments in lieu of taxes; to require the distribution of the applicable portion of those service payments from the nonperforming parcels to Hilliard City Schools and Tolles Career & Technical Center and the appropriate taxing authorities; to deposit the remainder of those service payments from the nonperforming parcels to the City; to authorize the City to enter into the First Amendment to the Franklin County Compensation Agreement (Sugar Farm and Renner South Incentive Districts) with Franklin County; and to declare an emergency. ($0.00)
Body
WHEREAS, Ohio Revised Code (“R.C.”) Sections 5709.40, 5709.42, and 5709.43 authorize this Council, by ordinance, to create one or more tax increment financing (“TIF”) incentive districts or TIF areas, declare the improvement to parcels of real property located within each incentive district or TIF area 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 appropriate taxing authorities, establish one or more municipal public improvement tax increment equivalent funds for the deposit of those non-school and non-taxing authority service payments, and specify the purposes for which money in those funds will be expended; and
WHEREAS, by Ordinance No. 3248-2021, this Council established a TIF area, as permitted and provided in R.C. Section 5709.40(B), encompassing 220 multi-family apartments constructed on ±13.886 acres at the northeast corner of Renner Road and Alton Darby Creek Road (the “Sugar Farm 40(B) TIF”) to exempt from taxation ninety-five percent (95%) of the improvements to each parcel for up to a thirty (30) year period coextensive for all parcels and to simultaneously direct and require the current and future owners of each parcel to make annual service payments in lieu of taxes in the same amount as they would have made real property tax payments but for the exemption; and
WHEREAS, after the Board of County Commissioners of Franklin County, Ohio (the “Commissioners”) objected to a notice of a City ordinance for the creation of certain TIF incentive districts described herein, the City, by Ordinance No. 3319-2021, and the Commissioners, by Resolution No. 0970-21, entered into the Franklin County Compensation Agreement (Sugar Farm & Renner South Incentive Districts) dated December 9, 2021 (the “Compensation Agreement”) pursuant to R.C. Section 5709.40(E); and
WHEREAS, following the Compensation Agreement and pursuant to Ordinance No. 3259-2021, this Council determined that it is necessary and appropriate and in the best interest of the City to establish two incentive districts with one encompassing ±242.36-acres north of Renner Road between Alton Darby Creek Road and Clover Groff Ditch (the “Sugar Farm Incentive District”) and the other encompassing ±87.9-acres south of Renner Road between the same boundaries as above; and
WHEREAS, subsequent to the passage of Ordinance No. 3248-2021, but prior to filing the exemption application with the County Auditor and Ohio Department of Taxation, it was determined that the property owner within the Sugar Farm 40(B) TIF recorded a condo declaration and divided the parent parcel into about 220 separate condo parcels with a parcel covering each of the multifamily apartment units constructed within the Sugar Farm 40(B) TIF; and
WHEREAS, the Franklin County Auditor classifies four or more residential units per parcel as a commercial land use class while classifying three or less residential units per parcel as a residential land use class, which means the property owner’s actions have converted the land use classifications within the Sugar Farm 40(B) TIF from commercial to residential; and
WHEREAS, pursuant to R.C. Section 5709.40(B), improvements with respect to a parcel that is used or to be used for residential purposes may be declared a public purpose under that division only if the parcel is located in a blighted area of an impacted city, which the Sugar Farm 40(B) TIF is not in a blighted area; however, such requirement for improvements used or to be used for residential purposes does not exist under R.C. Section 5709.40(C); and
WHEREAS, the parcels from the Sugar Farm 40(B) TIF, as depicted on Exhibit A-3 attached hereto, were, as defined by R.C. 5709.40(A)(9), exempted by Council under R.C. Section 5709.40(B) and the owners were required to make service payments in lieu of taxes in accordance with R.C. Section 5709.42, but no such payments have been remitted to the county treasurer since inception due to no exemption application being filed and approved by the Ohio Department of Taxation (the “Nonperforming Parcels”); and
WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to repeal Ordinance No. 3248-2021 in order to dissolve the Sugar Farm 40(B) TIF and to then amend Ordinance No. 3259-2021 to include the Nonperforming Parcels into the Sugar Farm Incentive District (with the Nonperforming Parcels now being included as a “Parcel” and collectively included with the “Parcels” as defined in and for the purposes of Ordinance No. 3259-2021); and
WHEREAS, pursuant to R.C. Section 5709.40(C)(1), the City, having a population over 25,000 residents for the 2020 U.S. Census, determines that the sum of the taxable value of real property in the Sugar Farm Incentive District with the Nonperforming Parcels for the preceding tax year plus the taxable value of all real property in the City that would have been taxable in the preceding year were it not for the fact that the property was in an existing incentive district and therefore exempt from taxation still does not exceed twenty-five percent (25%) of the taxable value of real property in the City for the preceding tax year; and
WHEREAS, pursuant to R.C. Sections 5709.40(A)(5) and 5709.40(C)(3)(a), the Sugar Farm Incentive District with the Nonperforming Parcels is still an area not more than three hundred acres in size enclosed by a continuous boundary and includes portions of the Project being or to be undertaken that places additional demand on the Public Infrastructure Improvements, as Project and Public Infrastructure Improvements are defined in Ordinance No. 3259-2021; and
WHEREAS, pursuant to R.C. Section 5709.40(A)(5)(f), the engineer for the City certified the public infrastructure serving the Sugar Farm Incentive District is inadequate to meet the development needs of the Sugar Farm Incentive District as evidenced by Exhibit C attached to Ordinance No. 3259-2021; and
WHEREAS, the Sugar Farm Incentive District with the Nonperforming Parcels exempts from taxation ninety-five percent (95%) of the improvements to each Parcel as permitted and provided in R.C. Section 5709.40(C) for up to a thirty (30) year period coextensive with the life of the Sugar Farm Incentive District containing such Parcel, and simultaneously directs and requires the current and future owners of each Parcel to make annual service payments in lieu of taxes (the “Service Payments”), in the same amount as they would have made real property tax payments but for the exemptions provided by Ordinance No. 3259-2021; and
WHEREAS, the appropriate taxing authorities under R.C. Section 5709.40(F), including the Norwich Township Fire Department and Emergency Medical Services (the “Fire Department”), will also receive from the Nonperforming Parcels included in the Sugar Farm Incentive District the amounts they would have received in real property taxes attributable to any amount by which the effective tax rate of either a renewal levy with an increase or a replacement levy exceeds the effective tax rate of the levy renewed or replaced, or that are attributable to an additional levy, for a levy authorized by the voters on or after January 1, 2006 for any applicable services as described in R.C. Section 5709.40(F)(1)-(13); and
WHEREAS, the City has determined that the applicable portion of the Service Payments from the Nonperforming Parcels shall be paid directly to the Hilliard City Schools and Tolles Career & Technical Center (the “School Districts”) in an amount equal to the real property taxes that the School Districts would have been paid if the improvement to each of the Nonperforming Parcels located within the Sugar Farm Incentive District and the School Districts had not been exempt from taxation pursuant to this Ordinance; and
WHEREAS, in accordance with the “Big Darby Revenue Program” established by Resolution No. 0216X-2008, the five percent (5%) of the real property taxes of the improvements to each of the Nonperforming Parcels not exempted from taxation pursuant to this Ordinance will be distributed directly to the appropriate taxing authorities under R.C. Section 5709.40(F) including the Fire Department; and
WHEREAS, in furtherance of the Big Darby Revenue Program’s requirements to have twenty percent (20%) of the City’s Service Payments used for regional purposes and seventy-five percent (75%) for Big Darby Accord purposes, after providing payment to the Fire Department as described herein, the remaining ninety-five percent (95%) that becomes the Service Payments distributed to the City from the Nonperforming Parcels will be split so that cumulatively approximately 21.05% of the 95% is used for the City’s priority regional purposes and 78.95% of the 95% is used for Big Darby Accord purposes; and
WHEREAS, pursuant to R.C. Section 5709.40(C)(2)(a), since the City does not intend to apply for the exemption from taxation under R.C. Section 5709.911 on behalf of the owner(s) of the Nonperforming Parcels, the City is not required to notice the owner(s) and not required to conduct a public hearing on this Ordinance prior to passage; and
WHEREAS, notice has been delivered on September 9, 2025 to the Commissioners, and notice of this proposed ordinance has been delivered to the boards of education of the School Districts in accordance with and within the time periods prescribed in R.C. Sections 5709.40 and 5709.83, respectively; and
WHERAS, as part of the notice to the Commissioners, they have the right within thirty days of receipt of the notice under R.C. Section 5709.40(E)(2) to object by resolution to the exemption for the number of years in excess of ten, may object to the exemption for the percentage of the improvement to be exempted in excess of seventy-five percent, or both; and
WHEREAS, the Commissioners objected to the exemption for the number of years in excess of ten (10) with the adoption of the Commissioners’ Resolution No. 0713-25 on September 30, 2025; and
WHEREAS, pursuant to R.C. Section 5709.40(E), the Commissioners by resolution and the City herein have agreed to enter into the First Amendment to Franklin County Compensation Agreement (Sugar Farm & Renner South Incentive Districts) (the “First Amendment”) to exempt the Nonperforming Parcels within the Sugar Farm Incentive District in accordance with the terms and conditions of the Compensation Agreement; and
WHEREAS, in lieu of direct compensation from the City, under the First Amendment, the Commissioners shall receive, in the same manner as usual, an amount equal to five percent (5%) of the real property taxes that the Commissioners would have been paid for the improvements to each of the Nonperforming Parcels located within the Sugar Farm Incentive District; and
WHEREAS, in accordance with the First Amendment, the Commissioners agree that the City will allocate the Service Payments from the Nonperforming Parcels pursuant to the recommendations of the Big Darby Revenue Program as described herein including, but not limited to, the City providing a portion of its Service Payments from the Nonperforming Parcels to the Fire Department; and
WHEREAS, pursuant to R.C. Section 5709.43(A) and Ordinance No. 3259-2021, this Council established the Sugar Farm Municipal Public Improvement Tax Increment Equivalent Fund in which there shall be deposited the appropriate remaining non-school and non-taxing authority Service Payments from the Nonperforming Parcels distributed to the City as provided herein; and
WHEREAS, an emergency exists in the daily operations of the Department of Development such that it is immediately necessary to allow the City to immediately file the exemption application on the Nonperforming Parcels added to the Sugar Farm Incentive District prior to end of tax year 2025, which if it is not, R.C. 5713.081 specifies that the tax commissioner shall not remit more than three years’ back taxes, penalties, and interest from the date of the application meaning the City would forego tax year 2023 Service Payments necessary to pay down the existing Public Infrastructure Improvements costs that are accruing interest and adding additional expenses to the City, all for the immediate preservation of the public health, peace, property, welfare, and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Repeal of Sugar Farm 40(B) TIF. That Ordinance No. 3248-2021 passed by this Council on December 13, 2021 is hereby repealed.
Section 2. Amendment of Sugar Farm Incentive District. That Council finds and determines that amending Ordinance No. 3259-2021 is in furtherance of, and supports, the Big Darby Revenue Program. Exhibit A to Ordinance No. 3259-2021 is hereby amended and replaced with Exhibit A-2 attached hereto to add the Nonperforming Parcels from the Sugar Farm 40(B) TIF (separately and specifically identified in Exhibit A-3 attached hereto) to the Sugar Farm Incentive District. Exhibit A-1 to Ordinance No. 3259-2021 is hereby repealed, and any references in Ordinance No. 3259-2021, including in the Background Section and Recitals to Ordinance No. 3259-2021, referring to the property in Exhibit A-1, which includes the Nonperforming Parcels, not being a part of the Sugar Farm Incentive District or the Parcels shall be null and void.
Section 3. Amendment to Ordinance No. 3259-2021. That Sections 1 and 3 of Ordinance No. 3259-2021, as amended, shall read as follows:
Section 1. Parcels and Creation of Incentive Districts. The real property subject to this ordinance is identified and depicted in Exhibit A-2 but does not include the real property identified and depicted in Exhibit A-1 (as currently or subsequently configured, the “Parcels,” with each individual parcel, a “Parcel”). Pursuant to the TIF Statutes, this Council hereby creates the “Sugar Farm Incentive District” and the “Renner South Incentive District” (individually, an Incentive District” and together, the “Incentive Districts”), the boundaries of each shall be coextensive with the boundary of, and shall include, the Parcels.
Section 3. Exemptions. Pursuant to ORC Section 5709.40(C), 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 ORC Section 5709.40(A)) is hereby declared to be a public purpose and exempt from taxation for a period coextensive with the life of the Incentive District containing such Parcel, which commences for each Incentive District separately 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 for a Parcel in that Incentive District 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 exemption provided by this ordinance is subordinate to an exemption for a Parcel granted pursuant to ORC Section 3735.65 et. seq. (community reinvestment area), ORC Section 5709.61 et. seq. (enterprise zone) and ORC Section 5709.08 (government and public property).
Section 4. Repeal of Existing Sections 1 and 3 of Ordinance No. 3259-2021. That existing Sections 1 and 3 of Ordinance No. 3259-2021 are hereby repealed.
Section 5. Parcels of the Sugar Farm Incentive District. That the Parcels, as defined in Ordinance No. 3259-2021, are hereby supplemented to include the Nonperforming Parcels as set forth in this Exhibit A-2 and Exhibit A-3; the Nonperforming Parcels shall each be considered a Parcel and included in the Parcels for all purposes of Ordinance No. 3259-2021, as amended hereby.
Section 6. No Other Modifications. That except as provided herein, all provisions of Ordinance No. 3259-2021 shall remain in full force and effect; it is the intent of City Council that Ordinance No. 3259-2021 and this Ordinance be construed together as a single instrument.
Section 7. Further Authorizations. That this Council ratifies the delivery of the notices of this Ordinance to the School Districts and the Commissioners pursuant to Section 5709.40 and Section 5709.83 of the Ohio Revised Code; authorizes and directs the Director of the Department of Development, the City Clerk, and/or other appropriate officers of the City or their designees to deliver a copy of this Ordinance and status reports to the Ohio Department of Development pursuant to Section 5709.40(I) of the Ohio Revised Code; to make such arrangements as are necessary and proper for the collection of the service payments in lieu of taxes from the Nonperforming Parcels; and further authorizes those same officials of the City and their designees to execute such other agreements and instruments and to take all actions necessary to implement this Ordinance.
Section 8. First Amendment to Compensation Agreement. That the Director of the Department of Development or his or her designee (together, the “Director”), for and in the name of the City, is hereby authorized to execute and deliver the First Amendment 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 Director’s execution and delivery thereof.
Section 9. Severability. If any provision of this Ordinance, or any covenant, obligation or agreement authorized herein is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.
Section 10. Effective Date. That 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.