Explanation
Background: Ordinance No. 1224-2009 established a tax increment financing (TIF) area pursuant to Ohio R.C. Section 5709.40(B) around the OhioHealth Riverside Methodist Hospital (the “OhioHealth TIF”). Pursuant to Ordinance No. 1689-2009 and Ordinance No. 1020-2016, the City and OhioHealth entered into a Tax Increment Financing Agreement dated June 1, 2011, as amended by its First Amendment dated September 23, 2016 (together, the “OhioHealth TIF Agreement”). The City is now in the process of partnering with the Central Ohio Transit Authority to develop bus rapid transit from Downtown Columbus to Dublin including along Olentangy River Road (the “Northwest BRT Corridor”) where Riverside Methodist Hospital is located. The City has implemented ZoneIn Phase 1 and is implementing ZoneIn Phase 2 to allow for higher density residential and mixed-use developments along parts of the Northwest BRT Corridor. In addition, two separate projects have been proposed along the Northwest BRT Corridor within the OhioHealth TIF for which Continental Development Ventures, LLC and Crawford Hoying, Ltd. have respectively requested tax increment financing to support public infrastructure improvements as allowed under R.C. Section 5709.40(A)(8). OhioHealth has agreed to allow the parcels in the two new projects to be removed from the OhioHealth TIF and placed into the two new proposed TIFs.
This Ordinance will authorize an amendment to both the OhioHealth TIF and the OhioHeath TIF Agreement for such aforementioned purposes. This Ordinance will also establish a new tax increment financing area at 3654 Olentangy River Road on Franklin County Tax Parcel ID No. 010-126692 (the “Olentangy 315 North TIF”) pursuant to R.C. Sections 5709.40(B), 5709.42, 5709.43. The proposed Olentangy 315 North TIF will provide for a one-hundred percent (100%) exemption from real property taxation on the improvements to the parcel(s) within such TIF for a concurrent period for all parcel(s) of not more than thirty (30) years. Columbus City Schools will receive, in the same manner as usual, all amounts they would have received in real property taxes had the tax exemption herein not been granted. Annual service payments in lieu of taxes will be made by the owner(s) of each parcel with respect to the improvements to the Olentangy 315 North TIF parcel(s). The applicable portion of those service payments in lieu of taxes will be distributed directly to the school district described herein, and the remaining portion of those service payments in lieu of taxes will be paid to the City for deposit into the appropriate TIF fund established by this Ordinance to be used to finance public infrastructure improvements, as allowed under R.C. Section 5709.40(A)(8), benefiting the Olentangy 315 North TIF parcel(s). A companion ordinance is being submitted for City Council consideration to remove additional parcels from the Olentangy & North Broadway TIF created pursuant to Ordinance No. 2189-2011 to combine those parcels with some of the parcels removed from the OhioHealth TIF hereunder to create a new TIF for the other project.
Fiscal Impact: No funding is required for this legislation. The City is foregoing one-hundred percent (100%) of the real property tax revenue that it would have received from the improvements within the new Olentangy 315 North TIF. Instead, the non-school portion of that revenue will be diverted to a new Olentangy 315 North TIF Fund.
Title
To authorize a second amendment to the TIF Agreement with OhioHealth; to amend Ordinance No. 1224-2009 to remove certain tax parcels exempted by that ordinance from the OhioHealth TIF; to create the Olentangy 315 North TIF with one of those removed parcels; to declare the improvements to the Olentangy 315 North TIF parcel(s) to be a public purpose and exempt from real property taxation; to require the owner(s) of the parcel(s) in the Olentangy 315 North TIF to make service payments in lieu of taxes; to require the distribution of the applicable portion of those service payments to the Columbus City School District; to deposit the remainder of those service payments into the Olentangy 315 North TIF Fund for financing public infrastructure improvements as allowed under R.C. Section 5709.40(A)(8). ($0.00)
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WHEREAS, pursuant to R.C. Section 5709.40(B) and Ordinance No. 1224-2009, City Council created a tax increment financing (TIF) area around the OhioHealth Riverside Methodist Hospital (the “OhioHealth TIF”); and
WHEREAS, pursuant to Ordinance No. 1689-2009 and Ordinance No. 1020-2016, the City and OhioHealth entered into a Tax Increment Financing Agreement dated June 1, 2011, as amended by its First Amendment dated September 23, 2016 (together, the “OhioHealth TIF Agreement”); and
WHEREAS, the City is now in the process of partnering with the Central Ohio Transit Authority to develop bus rapid transit from Downtown Columbus to Dublin including along Olentangy River Road (the “Northwest BRT Corridor”) where Riverside Methodist Hospital is located; and
WHEREAS, the City has implemented ZoneIn Phase 1 and is implementing ZoneIn Phase 2 to allow for higher density residential and mixed-use developments along parts of the Northwest BRT Corridor; and
WHEREAS, two separate projects have been proposed along the Northwest BRT Corridor within the OhioHealth TIF (the “Northwest BRT Projects”) for which Continental Development Ventures, LLC and Crawford Hoying, Ltd. have requested tax increment financing to support public infrastructure improvements benefiting the proposed projects as allowed under R.C. Section 5709.40(A)(8); and
WHEREAS, OhioHealth has agreed to allow the parcels of the Northwest BRT Projects to be removed from the OhioHealth TIF and placed into the new proposed separate TIFs, which the two new TIFs will provide indirect support towards the creation of new housing units within the Northwest BRT Projects in close proximity to the hospital for possible occupancy by OhioHealth employees; and
WHEREAS, to maximize the tax increment financing available for the Northwest BRT Projects and the public infrastructure projects as described on Exhibit B attached hereto (the “Public Infrastructure Improvements”), OhioHealth and the City have determined that it is in their best interests to remove the applicable parcels of the Northwest BRT Projects from the OhioHeath TIF, amend the OhioHealth TIF Agreement for the second time, and add the parcels of the Northwest BRT Projects (and additional adjacent parcels for one of the projects) to new TIFs; and
WHEREAS, R.C. Sections 5709.40(B), 5709.42, and 5709.43 (collectively, the “TIF Statutes”) authorize this Council, by ordinance, to declare the improvement to parcels of real property located within the City 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 in lieu of taxes to the school district in which those parcels are located and to the City, establish a municipal public improvement tax increment equivalent fund for the deposit of those non-school service payments in lieu of taxes, and specify the purposes for which money in that fund will be expended; and
WHEREAS, in order to pay for the costs of the Public Infrastructure Improvements, this Council has determined that it is necessary and appropriate and in the best interest of the City to establish a tax increment financing area at 3654 Olentangy River Road on Franklin County Tax Parcel ID No. 010-126692 as depicted on Exhibit C attached hereto (the “Olentangy 315 North TIF”) to exempt from taxation one-hundred percent (100%) of the improvements to each parcel of real property within the Olentangy 315 North TIF (collectively the “Parcels” and each a “Parcel”) as permitted and provided in R.C. 5709.40(B) for up to a thirty (30) year concurrent period for all Parcels and to simultaneously direct and require the current and future owners of each Parcel (each individually an “Owner” and collectively the “Owners”) to make annual payments in lieu of taxes, in the same amount as they would have made real property tax payments but for the exemptions provided by this Ordinance; and
WHEREAS, the City has determined that the applicable portion of the service payments in lieu of taxes shall be paid directly to Columbus City Schools (the “School District”) in an amount equal to the real property taxes that the School District would have been paid if the improvement to each Parcel located within the School District had not been exempt from taxation pursuant to this Ordinance; and
WHEREAS, pursuant to R.C. Section 5709.43(A), this Council has determined to establish a municipal public improvement tax increment equivalent fund in which there shall be deposited the appropriate remaining non-school service payments in lieu of taxes distributed to the City as provided herein; 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 periods prescribed in R.C. Sections 5709.40 and 5709.83, respectively; and
WHEREAS, a companion ordinance is being submitted for City Council consideration to remove additional parcels from the Olentangy & North Broadway TIF created pursuant to Ordinance No. 2189-2011 to combine those parcels with some of the parcels removed from the OhioHealth TIF hereunder to create a new TIF for the other project.; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. TIF Amendments. That this Council finds and determines that amending Ordinance No. 1224-2009 is in furtherance of, and supports, the Northwest BRT Corridor and ZoneIn Phases 1 and 2. Exhibit A to Ordinance No. 1224-2009 is hereby repealed and replaced with Exhibit A-1 attached hereto to remove Franklin County Tax Parcel ID Nos. 010-126692, 010-305899, 010-305900, and 010-305901; to remove the .453-acre “Common Element” identified on Instrument No. 202202180028234 recorded with the Franklin County, Ohio Recorder’s Office; and to remove the .911-acre “Common Element” less the .754 acres formerly known as Franklin County Tax Parcel ID No. 010-103643 identified on Instrument No. 202202180028234 recorded with the Franklin County, Ohio Recorder’s Office from the OhioHealth TIF (collectively, the “Removed Parcels”). Upon passage of this Ordinance, Ordinance No. 1224-2009 shall be read and interpreted to mean that the Removed Parcels depicted on Exhibit A-1 were included in the OhioHealth TIF from the passage of Ordinance No. 1224-2009 to the passage of this Ordinance. Henceforth from passage of this Ordinance, Franklin County Tax Parcel ID No. 010-126692 shall no longer be part of the OhioHealth TIF but shall be included in the Olentangy 315 North TIF as described herein. Exhibit B to Ordinance No. 1224-2009 is hereby repealed and replaced with Exhibit B-1 attached hereto to supplement the list of eligible public infrastructure made, to be made, or in the process of being made that directly benefit, or that once made, will directly benefit the remaining parcels in the OhioHealth TIF.
Section 2. No Other Modifications. That except as provided herein, all provisions of Ordinance No. 1224-2009 shall remain in full force and effect; it is the intent of City Council that Ordinance No. 1224-2009 and this Ordinance be construed together as a single instrument, as appropriate.
Section 3. Parcels and Creation of TIF Area. That the Parcels, and each individual Parcel as currently or subsequently configured, subject to this Ordinance are identified and depicted on Exhibit C. The Parcels will be included in a new tax increment financing area the boundaries of which shall be corresponding with the boundary of, and shall include, the Parcels known hereafter as the Olentangy 315 North TIF.
Section 4. Public Infrastructure Improvements. That this Council hereby designates the Public Infrastructure Improvements described on Exhibit B and any other public infrastructure improvements hereafter designated by ordinance as public infrastructure improvements made, to be made, or in the process of being made that directly benefit, or that once made, will directly benefit the Parcels.
Section 5. Exemption. That, pursuant to R.C. Section 5709.40(B), this Council hereby finds and determines that one-hundred percent (100%) 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 R.C. Section 5709.40(A)) is hereby declared to be a public purpose and exempt from taxation for a coextensive period for all Parcels, which commences for all Parcels with the tax year in which an exempted Improvement, due to a new structure, first appears on the tax list and duplicate of real and public utility property and that commences after the effective date of the ordinance 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 “TIF Exemption”).
Section 6. Service Payments. That, as provided in R.C. Section 5709.42, each Owner and collectively the Owners are hereby required to make service payments in lieu of taxes with respect to the Improvement allocable to each Parcel to the Franklin County Treasurer or its designee on or before the final dates for payment of real property taxes. The service payments in lieu of taxes will be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and collected against that Improvement if it were not exempt from taxation pursuant to this Ordinance, including any penalties and interest (collectively, the “Service Payments”). The Service Payments, and any other payments with respect to each Improvement that are received in connection with the reduction required by R.C. Sections 319.302, 321.24, 323.152 and 323.156, as the same may be amended from time to time, or any successor provisions thereto as the same may be amended from time to time (the “Property Tax Rollback Payments”), will be deposited and distributed in accordance with this Ordinance.
Section 7. TIF Fund. That this Council establishes, pursuant to and in accordance with the provisions of R.C. Section 5709.43, the Olentangy 315 North Municipal Public Improvement Tax Increment Equivalent Fund (the “TIF Fund”) into which the appropriate Service Payments and Property Tax Rollback Payments collected with respect to the Parcels and not required pursuant to this Ordinance to be distributed to the School District will be deposited. The TIF Fund will be maintained in the custody of the City. The City may use amounts deposited into the TIF Fund only for the purposes authorized in the TIF Statutes and this Ordinance (as it may be amended from time to time). The TIF Fund will remain in existence so long as the Service Payments and Property Tax Rollback Payments are collected and used for the aforesaid purposes, after which time the TIF Fund will be dissolved and any surplus funds remaining therein transferred to the City's General Fund, all in accordance with R.C. Section 5709.43.
Section 8. Distributions; Payment of Costs. That, pursuant to the TIF Statutes, the County Treasurer is requested to distribute the Service Payments and Property Tax Rollback Payments as follows:
a. To the School District, an amount equal to the amount the School District would otherwise receive as real property tax payments (including the applicable portion of any Property Tax Rollback Payments) derived from the Improvement to each Parcel if the Improvement had not been exempt from taxation pursuant to this Ordinance.
b. To the City, all remaining amounts for further deposit into the TIF Fund for payment of costs of the Public Infrastructure Improvements, including, without limitation, debt charges on any notes or bonds issued to pay or reimburse finance costs or costs of those Public Infrastructure Improvements.
All distributions required under this Section are to be made at the same time and in the same manner as real property tax distributions.
Section 9. Further Authorizations. That this Council hereby authorizes the Director of the Department of Development, the City Clerk, or other appropriate officers of the City to deliver a copy of this Ordinance to the Ohio Development of Development and to make such arrangements as are necessary and proper for collection of the Service Payments and Property Tax Rollback Payments. This Council further authorizes the Director of the Department of Development, the City Clerk, the City Attorney or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as may be appropriate to implement this Ordinance.
Section 10. TIRC. That the City’s Tax Incentive Review Council (“TIRC”) shall review annually all exemptions from taxation resulting from the declarations set forth in this Ordinance and any other matters as may properly come before the TIRC, all in accordance with Section 5709.85 of the Ohio Revised Code.
Section 11. Second Amendment. That the Director of the Department of Development or his or her designee (together, the “Director”),on behalf of the City, is hereby authorized to enter into a second amendment to the OhioHealth TIF Agreement (the “Second Amendment”) presently on file with the Department of Development, 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 not being substantially adverse to the City, shall be evidenced conclusively by the execution and delivery thereof. For the purposes of Ordinance No. 1689-2009 and Ordinance No. 1020-2016, the Second Amendment together with the OhioHealth TIF Agreement shall be construed together as a single instrument, as appropriate.
Section 12. Effective Date. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.