Explanation
Background: The Department of Development is proposing the establishment under Section 5709.40(C) of the Revised Code of a tax increment financing incentive district in the Short North area.
The attached ordinance establishes an incentive district and provides for a 100% exemption on all development within the incentive district for a period of not more than 30 years. Annual service payments in lieu of taxes with respect of development within the incentive district will be paid into a separate TIF Fund established in this ordinance. It is important to note that the Columbus City School District will receive, at the same time, and in the same manner as usual, all monies that it would have received in real property taxes had the TIF exemption not been granted. Revenue derived from the service payments in lieu of taxes from the incentive district will be used to fund public infrastructure improvements benefiting the incentive district and the Short North area.
Fiscal Impact: No funding is required for this legislation. The City is foregoing real property tax revenue that it would have received in respect of development within the incentive district. Instead, that revenue will be diverted to the specified TIF Fund to be used for public infrastructure improvements benefiting the incentive district.
Title
An ordinance creating a tax increment financing incentive district pursuant to Section 5709.40(C) of the Revised Code, declaring improvements to the real property located in the incentive district to be a public purpose; exempting from real property taxation 100 percent of those improvements; requiring the owners thereof to make service payments in lieu of taxes; establishing a municipal public improvements tax increment equivalent fund for the deposit of the service payments collected from the incentive district; protecting the city school district serving the incentive district against any loss of tax revenue as a result of the exemptions granted by this Ordinance; describing the public infrastructure improvements to be made within the incentive district; authorizing the execution of a tax increment financing agreement with respect to the incentive district; and to declare an emergency. ($0)
Body
WHEREAS, the owners of the real property (the "Owners") located in the City and depicted in Exhibit A hereto (the "Property"), or their successors or assigns, have or will develop various projects in the area (collectively, the "Project"), some of which are identified in Exhibit B hereto, and this Council expects to make the public infrastructure improvements described on Exhibit C hereto (the "Public Infrastructure Improvements"), that once made will benefit or serve the Incentive District (as defined below); and
WHEREAS, Section 5709.40(C) of the Revised Code, authorizes the legislative authority of a municipal corporation, by ordinance, to create an incentive district and to declare improvements to parcels of real property located within the incentive district to be a public purpose and exempt from taxation; and
WHEREAS, this Council has determined to create an incentive district known as the Short North Incentive District (the "Incentive District") pursuant to Section 5709.40(C) of the Revised Code, the boundary of which shall be coextensive with the boundary of the Property; and
WHEREAS, there has been placed on file in the office of the City Clerk a Short North Parking Study, dated November 2005 (the "Development Plan"), which Development Plan is attached hereto as Exhibit D and which outlines the development that has occurred and continues to occur within the area comprising the proposed Incentive District; and
WHEREAS, the Columbus City Engineer has certified to this Council that (i) the Incentive District is less than 300 acres in size, (ii) the Incentive District is enclosed by a continuous boundary, and (iii) the public infrastructure serving the Incentive District are inadequate to meet the development needs of the Incentive District; and
WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to exempt from taxation 100% of the improvements to the Property as permitted and provided in Section 5709.40(C) of the Revised Code for up to 30 years, and to simultaneously direct and require the current and future owner(s) of Property to make annual service payments in lieu of the 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 ("Service Payments"), which Service Payments shall be made to the Franklin County Treasurer on or before the final dates for payment of real property taxes; and
WHEREAS, the City has determined that a portion of the Service Payments shall be paid to the School District in an amount equal to the real property taxes that the School District would have been paid if improvements to the Property located in such School District had not been exempted from taxation pursuant to this Ordinance; and
WHEREAS, pursuant to Section 5709.43(A) of the Revised Code, this Council has determined to establish a municipal public improvement tax increment equivalent fund for the Incentive District into which there shall be deposited Service Payments distributed to the City; and
WHEREAS, this Council has determined to provide for the execution and delivery of a Project and Development Agreement relating to the Public Infrastructure Improvements and the Property; and
WHEREAS, notice of this proposed Ordinance has been delivered to the Board of Education of the School District on December 5, 2005; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, in that it is immediately necessary to create the Incentive District, in order to maximize financing of the Public Infrastructure Improvement, all for the immediate preservation of the public health, peace, property and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Pursuant to Section 5709.40(A)(5)(f), the City approves the Development Plan and acknowledges and approves the certification of the City Engineer that the existing public infrastructure serving the proposed Incentive District is inadequate to meet the development the needs of the proposed Incentive District as evidenced by the Development Plan.
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Section 2. Pursuant to Section 5709.40(C) of the Revised Code, the City hereby creates the "Short North Incentive District", the boundaries of which shall be coextensive with the boundaries of the Property as depicted on Exhibit A. This Council hereby finds and determines that 100% of the increase in assessed value of each parcel of the Property subsequent to the effective date of this Ordinance (which increase in assessed value is hereinafter referred to as the "Improvement") is hereby declared to be a public purpose, and shall be exempt from taxation for a period commencing with the first tax year that begins after the effective date of this Ordinance and in which a 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 exemption commenced 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 Sections 5709.40 and 5709.42 of the Revised Code.
Section 3. Pursuant to Section 5709.42 of the Revised Code, the City hereby directs and requires the current and future owners of the Property to make annual Service Payments to the Franklin County Treasurer on or before the final dates for payment of real property taxes.
Section 4. The City hereby designates the Public Infrastructure Improvements described in Exhibit C attached hereto as public infrastructure improvements that directly benefit and/or serve the Incentive District.
Section 5. In accordance with the Sections 5709.40 and 5709.42 of the Revised Code, and this Ordinance, the Franklin County Treasurer shall pay directly to the School District a portion of the Service Payments made to the Franklin County Treasurer equal to the amount of the real property taxes that such School District would have received if the Improvements had not been exempted from taxation pursuant to this Ordinance. The Franklin County Treasurer shall pay to the City for deposit into the TIF Fund (defined in Section 6 hereof) the remainder of those Service Payments, as appropriate.
Section 6. The City hereby establishes for the Incentive District the "Short North Tax Equivalent Fund" (the "TIF Fund"), into which the Franklin County Treasurer shall deposit the portion of the Service Payments collected from the Incentive District not required to be distributed to the School District pursuant to Section 4 hereof. Any expenditure of Service Payments deposited into the TIF Fund is subject to the expenditure restrictions and appropriation requirements of Sections 27 through 31 of the Charter of the City. The TIF Fund shall remain in existence so long as Service Payments are collected and used for the aforesaid purposes, after which the TIF Funds shall be dissolved in accordance with Section 5709.43 of the Revised Code.
Section 7. The form of Project and Development Agreement between the City and the Short North Special Improvement District, Inc. (the "Agreement") presently on file with the City Clerk is hereby approved and authorized with changes therein not inconsistent with this Ordinance and not substantially adverse to the City and which shall be approved by the Director of the City's Department of Development (the "Director"). The Director, for and in the name of the City, is hereby authorized to execute the Agreement in substantially that form with any one or more of the Owners, provided that the approval of changes thereto by the Director, and the character of those changes as not being substantially adverse to the City, shall be evidenced conclusively by the execution thereof by the Director. The Director is hereby directed to enter into the Agreement within 10 business days of the effective date of this Ordinance. This Council further hereby authorizes and directs the City Auditor to make such arrangements as are necessary and proper for collection of the Service Payments from the Owners.
Section 8. Pursuant to Section 5709.40(G) of the Revised Code, 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 exemptions provided for herein remain 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 Section 5709.40(G) of the Revised Code.
Section 9. That for the reason 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 its passage if the Mayor neither approves nor vetoes the same and provided that prior to December 19,2005, the Board of Education for the Columbus City School District by resolution of the Board shall not have submitted comments to the City Clerk nor requested a meeting with the Director of Development to discuss the terms of this ordinance.