Explanation
Background: Half Baked Holdings, LLC (the “Developer”) is redeveloping the former Kroger Bakery site at 427-515 Cleveland Avenue on Franklin County Parcel No. 010-015761 (the “Site”) into a mixed-use development consisting of an approximately 75,000 square-foot wellness club; 350 multi-family residential units; a parking garage containing 401 parking spaces; and an urban green space (collectively, the “Project”). Pursuant to Ordinance No. 0508-2021 passed on March 8, 2021 by City Council, the City entered the southern manufacturing building on a portion of the Site onto the Columbus Register of Historic Properties; that portion of the Site is also the former Ford Motor Company Branch Assembly Plant. City Council further passed Ordinance No. 3097-2015 on December 14, 2015 that declared improvements to certain parcels of real property to be a public purpose, established a non-school tax increment financing area pursuant to R.C. Section 5709.40(B) in the vicinity of the Milo-Grogan neighborhood (the “Milo-Grogan TIF”),and required the property owners within the Milo-Grogan TIF to make service payments in lieu of taxes for the same amounts as their property taxes as if the improvements to their parcels had not been exempted. The non-school portion of those service payments in lieu of taxes paid to the City for deposit into the public improvement tax increment equivalent fund (the “Milo-Grogan TIF Service Payments” ) are to be used to finance public infrastructure improvements benefiting the parcels in the Milo-Grogan TIF. Ordinance No. 1988-2023 passed by City Council on July 24, 2023 expanded the Milo-Grogan TIF to include the Site and additional parcels. To further support the preservation of the now vacant, historical Site, and to repurpose it for the Project, City Council passed Ordinance No. 2093-2023 on July 31, 2023 to authorize the City to enter into the TIF Agreement dated September 8, 2023 (the “Prior TIF Agreement”) with the Developer, and to appropriate and authorize the expenditure of the Milo-Grogan TIF Service Payments to reimburse the Developer for the costs of certain public infrastructure improvements pursuant to that Prior TIF Agreement.
As the Prior TIF Agreement effectively expired since the Developer was unable to obtain a building permit and record a mortgage by December 31, 2024 due to tightening financial conditions in the private sector, the City and Developer desire to formally terminate the Prior TIF Agreement and enter into the new Tax Increment Financing and Cooperative Agreement (the “Cooperative Agreement”) with the Columbus-Franklin County Finance Authority (“the “CFCFA”). This Ordinance will authorize the City to enter into the Cooperative Agreement and a minimum service payment obligation declaration (the “Declaration”). This Ordinance will also appropriate and authorize the expenditure of the Milo-Grogan TIF Service Payments, minimum service payments, etc. to reimburse bonds issued by the CFCFA for the costs of certain public infrastructure improvements pursuant to that Cooperative Agreement and the Declaration and also authorize the appropriation and transfer of the Milo-Grogan TIF Service Payments, minimum service payments, etc. to the Housing Business Tax Incentive Fund for the retention of the City’s economic development fees.
Fiscal Impact: The City is appropriating and authorizing the expenditure of service payments in lieu of taxes (including property tax rollback payments) and minimum service payments deposited, and to be deposited, into the Milo-Grogan TIF Fund in accordance with the Cooperative Agreement and Declaration between the City, the Columbus-Franklin County Finance Authority, and Developer.
Title
To authorize the appropriation and transfer of $10,000.00 between the Milo-Grogan TIF Fund and the Housing Business Tax Incentive Fund; to authorize the appropriation and transfer of $5,000.00 annually between the Milo-Grogan TIF Fund and the Housing Business Tax Incentive Fund during the term of the tax increment financing and cooperative agreement; to appropriate and authorize the expenditure of service payments in lieu of taxes deposited, or to be deposited, into the Milo-Grogan TIF Fund to the Columbus-Franklin County Finance Authority or its designee; to authorize the Director of the Department of Development, on behalf of the City, to enter into the new tax increment financing and cooperative agreement between the City, Columbus-Franklin County Finance Authority, and Half Baked Holdings, LLC and the minimum service payment obligation declaration for reimbursement of bonds for certain public infrastructure improvements. ($10,000.00)
Body
WHEREAS, Half Baked Holdings, LLC (the “Developer”) acquired the former Kroger Bakery site at 427-515 Cleveland Avenue on Franklin County Parcel No. 010-015761 (the “Site”), which the Developer is redeveloping into a mixed-use development consisting of approximately a 75,000 square-foot wellness club; 350 multi-family residential units; a parking garage consisting of 401 parking spaces; and an urban green space (collectively, the “Project”); and
WHEREAS, Ordinance No. 0508-2021, passed on March 8, 2021 by City Council, authorized the City to enter the southern manufacturing building on a portion of the Site onto the Columbus Register of Historic Properties; that portion of the Site is also the former Ford Motor Company Branch Assembly Plant; and
WHEREAS, pursuant to R.C. Section 5709.40(B), and Ordinance No. 3097-2015 passed December 14, 2015, City Council declared improvements to certain parcels of real property to be a public purpose, and established a non-school tax increment financing area including certain parcels in the vicinity of the Milo-Grogan neighborhood (the “Milo-Grogan TIF”); and
WHEREAS, Ordinance No. 1988-2023, passed by City Council on July 24, 2023, expanded the Milo-Grogan TIF to include the Site and additional parcels; and
WHEREAS, to help preserve the historic Site and repurpose it for the Project, City Council passed Ordinance No. 2093-2023 on July 31, 2023 to authorize the TIF Agreement dated September 8, 2023 (the “Prior TIF Agreement”) with the Developer and to appropriate and expend the non-school service payments in lieu of taxes within the public improvement tax increment equivalent fund established for the Milo-Grogan TIF (the “Milo-Grogan TIF Service Payments”) to be used for the costs of certain public infrastructure improvements, as defined by R.C. 5709.40(A)(8), benefiting the Site and the Project; and
WHEREAS, the Prior TIF Agreement effectively expired since the Developer was unable to obtain a building permit and record a mortgage by December 31, 2024 due to tightening financial conditions in the private sector; and
WHEREAS, the City and Developer desire to formally terminate the Prior TIF Agreement and enter into the new Tax Increment Financing and Cooperative Agreement (the “Cooperative Agreement”) with the Columbus-Franklin County Finance Authority (“the “CFCFA”); and
WHEREAS, this legislation will authorize the Director of the Department of Development, on behalf of the City, to enter into the Cooperative Agreement with the CFCFA and the Developer to use the Milo-Grogan TIF Service Payments for the reimbursement of bonds issued by the CFCFA for the public infrastructure improvements identified in the Cooperative Agreement and Prior TIF Agreement; and
WHEREAS, it is now necessary to appropriate and authorize the expenditure or transfer of the Milo-Grogan TIF Service Payments and other monies deposited into the Milo-Grogan TIF public improvement tax increment equivalent fund for the purposes of the Cooperative Agreement, thereby preserving the public health, peace, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. Tax Increment Financing and Cooperative 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 enter into the Cooperative Agreement with the CFCFA and the Developer 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 Cooperative Agreement to reimburse bonds issued to pay for public infrastructure improvements as identified within the Cooperative Agreement.
SECTION 2. Subsequent Actions and MSP Declaration. That the Director is authorized to execute a declaration of covenants for the imposition of a minimum service payment obligation as defined and enacted pursuant to R.C. Section 5709.91 (the “Declaration”), subject to approval by the City Attorney, and the Director, or other appropriate officers of the City are authorized to take all actions as may be necessary to implement this Ordinance and the transactions contemplated herein and by the Cooperative Agreement and the Declaration, including being able to levy and have assessed the minimum service payment obligation on the real and public utility tax list and duplicate with the Franklin County, Ohio Auditor.
SECTION 3. Prior TIF Agreement. That the Director is hereby authorized to terminate the Prior TIF Agreement upon execution of the Cooperative Agreement, and the Prior TIF Agreement shall be of no further force nor effect; nor shall the Milo-Grogan TIF Service Payments be appropriated and authorized for expenditure for the purposes described in the Prior TIF Agreement and/or any related authorizing legislation.
SECTION 4. City TIF Closing Fee Appropriation. That from the unappropriated monies and from all monies estimated to come into said fund from any and all sources and unappropriated for any other purpose during the fiscal year ended December 31, 2025, the sum of $10,000.00 is appropriated in Fund 7469 (Milo-Grogan TIF Fund), Dept-Div 4402 (Economic Development), Object Class 10 (Transfer Out Operating) per the account codes in the attachment to this Ordinance.
SECTION 5. City TIF Closing Fee Transfer. That the transfer of $10,000.00 or so much thereof as may be needed, is hereby authorized from Fund 7469 (Milo-Grogan TIF Fund), Dept-Div 4402 (Economic Development) to Fund 2229 (Housing Business Tax Incentive Fund), Dept-Div 4402 (Economic Development) per the account codes in the attachment to this Ordinance.
SECTION 6. City TIF Administrative Fee. That subject to the authorization of the Director, the City Auditor is authorized to appropriate and make annual transfers as funds are received in Fund 7469 to Fund 2229 for the City’s economic development fees, as further described in the Cooperative Agreement (such fees are currently $5,000.00 per each outstanding TIF included in the Cooperative Agreement) and pursuant to this Ordinance and Ordinance No. 1837-2025.
SECTION 7. Appropriation and Expenditure. That the Milo-Grogan TIF Service Payments including any property tax rollback payments and the minimum service payment obligation deposited and to be deposited into the Milo-Grogan TIF Fund (Fund 7469) shall be deemed appropriated and authorized for expenditure for the purposes set forth in this Ordinance, the Cooperative Agreement, and the Declaration. The City Auditor is authorized to make payments to the CFCFA, or its authorized designee, from the Milo-Grogan TIF Fund (Fund 7469) in accordance with the Cooperative Agreement and the Declaration upon order of the Director 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 8. Accounting Codes. That funds are hereby deemed appropriated and expenditures and transfers are authorized to carry out the purposes of this Ordinance. That the City Auditor is authorized to establish such accounting codes as necessary, to make any accounting changes to revise the funding source for all agreements, contracts, amendments, or modifications associated with this Ordinance and the transactions contemplated by the Cooperative Agreement and the Declaration.
SECTION 9. Unencumbered Balance. That the City Auditor is authorized to transfer the unencumbered balance in a project account or subfund to the unallocated balance account within the same fund upon receipt of certification by the Director of the Department administering said project that the project has been completed and the monies are no longer required for said project.
SECTION 10. Effective Date. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.