Explanation
Background: Pulte Homes of Ohio, LLC and Harmony Development Group, LLC (together, the “Developers”) purchased or have options to purchase ±369.2 acres within the City of Columbus near the intersection of Alton & Darby Creek Road and Renner Road (the “Developers’ Property”). The Developers’ Property is subject to the requirements of the “Big Darby Revenue Program” adopted by Council under Resolution 0216X-2008 as further agreed upon in the Big Darby Development Agreement dated March 10, 2021 (the “Agreement”) between the City and the Developers pursuant to Ordinance 1557-2020. Pursuant to the Big Darby Revenue Program and in accordance with the Agreement, the Department of Development proposed establishing two tax increment financing (“TIF”) incentive districts under Ohio Revised Code (“ORC”) Section 5709.40(C) for parts of the Developers’ Property (the “Sugar Farm Incentive District” and the “Renner South Incentive District,” collectively, the “Incentive Districts”). Pursuant to ORC Section 5709.4(E), not later than forty-five business days prior to City Council adopting the ordinance to establish the Incentive Districts, the City delivered notice to the Franklin County, Ohio Board of County Commissioners (the “Commissioners”) of the City’s intent to exempt improvements with respect to the parcels within the Incentive Districts for more than ten years and greater than seventy-five percent. Within thirty days after receipt of the City’s notice, pursuant to the Commissioners’ Resolution Nos. 0834-21 and 0835-2021, the Commissioners formally objected to the exemptions for the number of years in excess of ten (10) until such time as either the Commissioners negotiate a mutually acceptable compensation agreement with the City, or the City proceeds to create the Incentive Districts providing for compensation to the Commissioners at the default rate as set forth in ORC Section 5709.40(E)(2). The City has determined to enter into a mutually acceptable compensation agreement with the Commissioners pursuant to ORC Section 5709.40(E) (the “Compensation Agreement”), wherein the City and the Commissioners have outlined their understandings for implementation of the Big Darby Revenue Program. This Ordinance approves and authorizes entering into the Compensation Agreement between the City and the Commissioners to outline the respective compensation and remittances under the Big Darby Revenue Program.
Emergency Justification: Emergency legislation is required to allow for the immediate effectiveness of this ordinance, which is necessary for City Council to be able to adopt the Incentive Districts ordinance after the Compensation Agreement is agreed to by the Commissioners and City Council.
Fiscal Impact: No funding is required for this legislation. The compensation contemplated by this legislation will be paid, in the same manner as usual, from the real property taxes that the appropriate taxing authorities would have received in real property taxes from the improvements to the parcels in the Incentive Districts or from the service payments in lieu of taxes required to be paid by the owners of the parcels in the Incentive Districts.
Title
To authorize the Director of the Department of Development or his or her designee, on behalf of the City, to execute and deliver a mutually acceptable compensation agreement between the City and the Franklin County, Ohio Board of County Commissioners (the “Commissioners”) for the mutually agreed upon compensation as required by Ohio Revised Code Section 5709.40(E) following the Commissioners’ objection to the City’s proposed ordinance to establish the Sugar Farm Incentive District and Renner South Incentive District under Ohio Revised Code Section 5709.40(C); and to declare an emergency.
Body
WHEREAS, pursuant to Ordinance 0627-2005 adopted by Council on April 4, 2005 and Ordinance 0527-2006 adopted on March 13, 2006, the Director of the Department of Development (the “Director”), on behalf of the City, entered into the Big Darby Accord Participation Agreement (the "Big Darby Accord") and its amendment with the Cities of Grove City and Hilliard, Village of Harrisburg, Franklin County, and Prairie, Brown, Pleasant, Norwich, and Washington Townships to secure their funding commitments to the Big Darby Accord Watershed Master Plan; and
WHEREAS, Pulte Homes of Ohio, LLC and Harmony Development Group, LLC (together, the “Developers”) plan to develop an approximately ±369.2 acre site within the City of Columbus and the area of the Big Darby Accord Watershed Master Plan near the intersection of Alton & Darby Creek Road and Renner Road (the “Developers’ Property”); and
WHEREAS, the Developers’ Property is subject to Big Darby Accord revenue program requirements (the “Big Darby Revenue Program”) as adopted by Resolution 0216X-2008 adopted by Columbus City Council on April 20, 2009, including establishing new tax increment financing (“TIF”) for parts of the Developers’ Property; and
WHEREAS, the Director entered into an agreement dated March 10, 2021 with the Developers (the “Big Darby Development Agreement”) authorized by Ordinance 1557-2020 to outline the plans for the TIFs; and
WHEREAS, Ohio Revised Code (“ORC”) Sections 5709.40, 5709.42, and 5709.43 (collectively, the “TIF Statutes”) authorize this Council, by ordinance, to create one or more incentive districts, declare the improvement to parcels 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 (the “Service Payments”), provide for the distribution of the applicable portion of such Service Payments to the 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 (the “City Service Payments”), and specify the purposes for which money in those funds will be expended; and
WHEREAS, in relation to the parts of the Developers’ Property where one to three residential units per parcel are to be constructed, the Department of Development determined that it is necessary and appropriate and in the best interest of the City to establish two separate incentive districts over the parcels owned by each of the Developers (the “Sugar Farm Incentive District” and the “Renner-South Incentive District” and together, the “Incentive Districts”); and
WHEREAS, the Department of Development proposed the Incentive Districts would exempt from taxation ninety-five percent (95%) of the improvements to each parcel as permitted and provided in ORC Section 5709.40(C), as applicable, for up to a thirty (30) year period, and to simultaneously direct and require the current and future owners of each parcel within the Incentive Districts to make annual payments in lieu of taxes in the same amount as they would have made in real property tax payments but for the exemptions provided by Ordinance No. 3259-2021; and
WHEREAS, notice of the proposed ordinance for the Incentive Districts was delivered to the Board of County Commissioners of Franklin County, Ohio (the “Commissioners”) in accordance with and within the time periods prescribed in ORC Sections 5709.40(E)(1); and
WHEREAS, pursuant to ORC Section 5709.40(E)(2) and the Commissioners’ Resolution Nos. 0834-21 and 0835-21, the Commissioners formally objected to the exemption for the number of years in excess of ten (10) until such time as either the Commissioners negotiate a mutually acceptable compensation agreement with the City or the City proceeds to create the Incentive Districts providing for compensation to the County at the default rate as set forth in ORC Section 5709.40(E)(2); and
WHEREAS, the City has determined to enter into a compensation agreement with the Commissioners pursuant to ORC Section 5709.40(E)(2) and (3) (the “Compensation Agreement”), wherein the City and the Commissioners have agreed to outline their understandings of the implementation of the Big Darby Accord Revenue Program, which the Commissioners had also adopted on April 9, 2009 pursuant to Commissioners’ Resolution No. 0271-09; and
WHEREAS, the TIF Statutes, however, do not provide the City the necessary legal authority to fully except the Norwich Township Fire Department and Emergency Medical Services (the “Fire Department”) from real property tax exemptions as contemplated by the Big Darby Revenue Program; and
WHEREAS, pursuant to the TIF Statutes, the Hilliard City Schools and Tolles Career & Technical Center (the “School Districts”) will receive, in the same manner as usual, an amount equal to the real property taxes that the School Districts would have been paid if the improvements within the Incentive Districts and the School Districts had not been exempt from taxation; and
WHEREAS, the appropriate taxing authorities under ORC Section 5709.40(F), including the Fire Department, will also receive, in the same manner as usual, 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 ORC Section 5709.40(F)(1)-(13); and
WHEREAS, in accordance with the Big Darby Revenue Program, in lieu of direct compensation from the City, under the Compensation Agreement, the County shall receive, in the same manner as usual, an amount equal to five percent (5%) of the remaining real property taxes that the County would have been paid for the improvements to each parcel located within the Incentive Districts; and
WHEREAS, the City will provide to the Fire Department from the City Service Payments an amount equal to the real property taxes the Fire Department would have received if not for the ninety-five percent (95%) exemption provided to the improvements within the Incentive Districts less the amount of Service Payments the Fire Department receives pursuant to ORC Section 5709.40(F)(13); and
WHEREAS, in furtherance of the Big Darby Revenue Program’s requirements to have twenty percent (20%) of the City Service Payments used for regional purposes and seventy-five percent (75%) for Big Darby Accord purposes, after the City provides the City Service Payments to the Fire Department, the remainder of the ninety-five percent (95%) that becomes the City Service Payments will be split so that cumulatively approximately 21.05% of the remaining 95% is used for the City’s priority regional purposes and 78.95% of the remaining 95% is used for Big Darby Accord purposes; and
WHEREAS, pursuant to ORC Section 5709.40(E), the Commissioners, by Resolution No. 0970-21, have authorized the County’s acceptance of the Compensation Agreement; and
WHEREAS, the Department of Development will submit additional legislation for City Council consideration for the appropriation and authorized expenditure of the City Service Payments to pay for Public Infrastructure Improvements in accordance with an authorized TIF reimbursement agreement between the City and the Developers as well as an authorized agreement with Norwich Township and Franklin County, as applicable; and
WHEREAS, an emergency exists in the daily operations of the Department of Development in that this Ordinance needs to be immediately effective to approve the Compensation Agreement and authorize entering into the Compensation Agreement in order to establish the Incentive Districts prior to the assessment of any improvements to the parcels and before the end of the year to maximize revenue available for the public infrastructure improvements already in process, such 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. Compensation Agreement. That the Director of the Department of Development (the “Director”) or his or her designee, for and in the name of the City, is hereby authorized to execute and deliver the Compensation Agreement 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 2. 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.