Explanation
BACKGROUND: Ordinance No. 0973-2008, as previously amended by several ordinances (altogether, the “Downtown TIF Ordinance”), was passed by City Council to establish a tax increment financing area over downtown Columbus (the “Downtown TIF”). The 2022 Downtown Columbus Strategic Plan adopted by Resolution No. 0164X-2022 recommends making downtown a “neighborhood for all” by: (1) identifying focus areas for growing downtown, (2) requiring and approving high density urban residential developments, and (3) converting outdated office space into contributing housing to achieve 40,000 total residents downtown by 2040. 280 High Street, LLC (the “Developer”) and the Developer’s affiliate, 44 Chestnut, LLC, respectively own the 18-story office building at 280 N. High Street and the adjacent parking garage at 44 E. Chestnut Street, collectively known as The Centennial on High (altogether, the “Project”). The Developer intends to convert a 345,000 square foot office building into a mixed-use building with a reduced square footage of approximately 75,000 square feet of renovated office space and approximately 145 newly added apartments in place of some of the existing office space. The Developer has requested the City to support and facilitate the urban redevelopment of the Project by removing the Project parcels (the “Parcels”) from the Downtown TIF and establishing a new tax increment financing area pursuant to R.C. Section 5709.41 (the “280 High TIF”). In accordance with R.C. Section 5709.41, Ordinance No. 2575-2025 was approved by City Council to authorize the City to accept title to the Parcels from the Developer and its aforesaid affiliate and then transfer title back to the previous owners prior to establishing the 280 High TIF.
This Ordinance amends the Downtown TIF Ordinance and establishes the 280 High TIF pursuant to R.C. Section 5709.41 to provide that one-hundred percent (100%) exemption from real property taxation on the increase in assessed value of the removed Parcels after acquisition by the City for a concurrent period of not more than 30 years for all Parcels. Annual service payments in lieu of taxes will be made by the owners of each of the Parcels with respect to the increase in assessed value thereon. Columbus City Schools will receive, in the same manner as usual, all amounts that it would have received in real property taxes had this exemption not been granted. The applicable portion of the service payments will be distributed directly to Columbus City Schools. The remaining non-school portion of those service payments will be paid to the City for deposit into the TIF fund established by this Ordinance to then finance the urban redevelopment. This Ordinance will also appropriate and authorize the 280 High TIF service payments in accordance with the 280 High TIF Reimbursement Agreement between the City and the Developer authorized by this same Ordinance.
FISCAL IMPACT: No funding is required for this legislation. The City is foregoing from taxation one-hundred percent (100%) of the real property tax revenue that it would have received from the urban redevelopment of the 280 High TIF parcels (tax revenue that is already foregone under the existing Downtown TIF). Instead, the non-school portion of that revenue will be diverted to the new 280 High TIF Fund.
EMERGENCY JUSTIFICATION: An emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to amend the Downtown TIF to create the new 280 High TIF, and to authorize the Director of the Department of Development on behalf of the City to enter into the 280 High TIF Reimbursement Agreement, which will allow the Developer to promptly close on the financing for the Project, which such financing will enable the Developer to immediately begin renovation and remodeling of the Project thereby enabling the provision of housing units and renovated office space in accordance with the 2022 Downtown Columbus Strategic Plan, all for the immediate preservation of the public health, peace, property, safety and welfare.
Title
To amend Ordinance No. 0973-2008, as previously amended by several ordinances, by removing eleven parcels owned by 280 High Street, LLC or 44 Chestnut, LLC from the Downtown TIF; to declare the improvements to those eleven parcels to be a public purpose and exempt from real property taxation pursuant to R.C. Section 5709.41 to create the new 280 High TIF; to require the owners of those parcels to make service payments in lieu of taxes; to require the distribution of the applicable portion of those service payments to the Columbus City Schools; to establish an urban redevelopment tax increment equivalent fund for the deposit of the remainder of those service payments; to appropriate and authorize the expenditure and transfer of revenues deposited in the aforementioned 280 High TIF fund; to authorize the Director of the Department of Development to enter into the 280 High TIF Reimbursement Agreement between the City and the Developer to provide most of those appropriated revenues to the Developer, for the reimbursement of certain urban redevelopment obligations thereunder; and to declare an emergency. ($0.00)
Body
WHEREAS, Ordinance No. 0973-2008, as amended by Ordinance Nos. 1189-2009, 0923-2012, 3169-2019, and 2971-2020 (altogether, the “Downtown TIF Ordinance”), was passed by City Council to establish a tax increment financing area over downtown Columbus (the “Downtown TIF”); and
WHEREAS, the City is engaged in urban redevelopment pursuant to the 2022 Downtown Columbus Strategic Plan (the “2022 Downtown Plan”) adopted by Resolution No. 0164X-2022 that recommends making downtown a “neighborhood for all” by: (1) identifying focus areas for growing downtown, (2) requiring and approving high density urban residential developments, and (3) converting outdated office space into contributing housing to achieve 40,000 total residents downtown by 2040; and
WHEREAS, 280 High Street, LLC (the “Developer”) and the Developer’s affiliate, 44 Chestnut, LLC, respectively own the 18-story office building at 280 N. High Street and the adjacent parking garage at 44 E. Chestnut Street, collectively known as The Centennial on High (altogether, the “Project”); and
WHEREAS, the Developer intends to convert a 345,000 square foot office building into a mixed-use building with a reduced square footage of approximately 75,000 square feet of renovated office space and approximately 145 newly added apartments in place of some of the existing office space; and
WHEREAS, the Developer has requested the City to support and facilitate the urban redevelopment of the Project by removing the Project parcels (collectively, the “Parcels” and each a “Parcel”) from the Downtown TIF and establishing a new tax increment financing area for the Parcels (the “280 High TIF”) pursuant to R.C. Sections 5709.41, 5709.42, and 5709.43 (the “TIF Statutes”); and
WHEREAS, the TIF Statutes authorize the legislative authority of a municipal corporation engaged in urban redevelopment, by ordinance, to declare the improvements to certain parcels of real property located within the municipal corporation, and for which it held fee title, 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 those service payments in lieu of taxes to the relevant school districts, establish an urban redevelopment tax increment equivalent fund for the deposit of the remainder of the service payments in lieu of taxes and payments from such TIF fund; and
WHEREAS, in accordance with R.C. Section 5709.41, Ordinance No. 2575-2025 was approved by City Council to authorize the City to accept title to the Parcels from the Developer and its aforesaid affiliate and then transfer title back to the previous owners prior to establishing the 280 High TIF; and
WHEREAS, the City held fee title to the Parcels via quit-claim deeds recorded with the Franklin County Recorder’s Office as Instrument Nos. 202604150043423 and 202604150043456; and
WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to amend the Downtown TIF Ordinance to remove the Parcels and thereafter exempt from taxation one hundred percent (100%) of the improvements to each of the removed Parcels as permitted and provided for in the TIF Statutes for a concurrent period of up to thirty (30) years for all of the Parcels and to simultaneously direct and require the current and future owner(s) of each of the Parcels (each such owner individually, an “Owner,” and collectively, the “Owners”) to make annual service payments in lieu of taxes, including any penalties and interest (collectively, the “Service Payments”), in the same amount as they would have made in real property tax payments but for the exemption provided by this Ordinance; and
WHEREAS, the City has determined that a portion of the Service Payments shall be paid directly to the Columbus City School District (the “School District”) in an amount equal to the real property taxes that the School District would have been paid if the improvements to each of the Parcels located within that School District had not been exempted from taxation pursuant to this Ordinance; and
WHEREAS, pursuant to R.C. Section 5709.43(B), this Council has determined to establish an urban redevelopment tax increment equivalent fund (the “TIF Fund”) in which there shall be deposited the remaining non-school Service Payments distributed to the City from the 280 High TIF 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 5709.41 and 5709.83; and
WHEREAS, it is necessary and appropriate to authorize the City to enter into the 280 High TIF Reimbursement Agreement (the “TIF Agreement”) with the Developer to allow for the non-school Service Payments to be pledged to the reimbursement of certain urban redevelopment obligations thereunder; and
WHEREAS, it is now necessary to appropriate and authorize the expenditure and transfer of the non-school Service Payments and any monies deposited into the TIF Fund described herein to the Developer, or its designee, pursuant to the TIF Agreement; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to amend the Downtown TIF to create the new 280 High TIF, and to authorize the Director of the Department of Development on behalf of the City to enter into the TIF Agreement, which will allow the Developer to promptly close on the financing of the Project, which such financing will enable the Developer to immediately begin renovation and remodeling of the Project thereby enabling the provision of housing units and renovated office space in accordance with the 2022 Downtown Plan, all for the immediate preservation of the public health, peace, property, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Downtown TIF Ordinance Amendment. That this Council finds and determines that amending the Downtown TIF Ordinance is in furtherance of and supports the City’s engagement in urban redevelopment pursuant to the 2022 Downtown Plan. Exhibit A to Ordinance No. 0973-2008, as was most recently repealed and replaced by Exhibit A to Ordinance No. 2971-2022, are both hereby repealed and replaced with Exhibit A attached hereto to remove the Parcels from the Downtown TIF to add the Parcels to the new 280 High TIF.
Section 2. Parcels of the 280 High TIF. That the Parcels, as currently or subsequently configured, subject to this Ordinance are identified and depicted on Exhibit B. Pursuant to the TIF Statutes, the Parcels will be included in a new tax increment financing area known hereafter as the 280 High TIF the boundaries of which shall correspond with the boundary of, and shall include, the Parcels.
Section 3. Parcels Ownership and Urban Redevelopment. That this Council finds that the City is engaged in urban redevelopment pursuant to the 2022 Downtown Plan (attached hereto as Exhibit C), adopted by Resolution No. 0164X-2022, and the City held fee title to each of the Parcels in 2026 prior to passage of this Ordinances as such conveyances were authorized by Ordinance No. 2575-2025 and recorded with the Franklin County Recorder’s Office as Instrument Nos. 202604150043423 and 202604150043456 as each are attached hereto as Exhibit D.
Section 4. Exemption. That pursuant to R.C. Section 5709.41, this Council hereby finds and determines that one-hundred percent (100%) of the increase in assessed value of the Parcels after acquisition of the Parcels by the City (which increase in assessed value is hereinafter referred to as the “Improvement” as defined in R.C. Section 5709.41(A)) is hereby declared to be a public purpose and exempt from taxation for a period commencing on January 1st of tax year 2030 (for Service Payments to be first collected in 2031) and ending on the earlier of: (a) thirty (30) years after such commencement or (b) the date on which the Improvement ceases to be a public purpose, all in accordance with the requirements of the TIF Statutes (the “TIF Exemption”). The TIF Exemption provided by this Ordinance is subordinate to any exemption for a Parcel granted pursuant R.C. Sections 717.05 through 717.053 (off-street parking facilities), R.C. Sections 3735.65 et. seq. (community reinvestment area), R.C. Sections 5709.61 et. seq. (enterprise zone) and R.C. Section 5709.08 (government and public property), and R.C. 5709.081 (public recreational facility used for athletic events) (collectively, the “Authorized Superior Exemptions”). In accordance with R.C. Section 5709.911(B), by this duly enacted Ordinance, this Council provides its duly authorized written consent to any Authorized Superior Exemptions to the Parcels applied for after the TIF Exemption.
Section 5. Service Payments. That, subject to the Authorized Superior Exemptions, as provided in R.C. Section 5709.42, each Owner and collectively the Owners are hereby required to make the Service Payments 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 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 exempted from taxation pursuant to this Ordinance. 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 6. TIF Fund. That this Council establishes, pursuant to and in accordance with the provisions of R.C. Section 5709.43, the 280 High Urban Redevelopment 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 to the City. 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 7. Distributions; Payment of Costs. That pursuant to the TIF Statutes, the Franklin 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 exempted 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 urban redevelopment identified in the TIF Agreement, including, without limitation, permanent property improvements directly related to the Project whether those costs were incurred two-years prior to or are incurred after the effective date of the TIF Agreement and debt charges on any securities of or loans undertaken to pay or to reimburse financing costs whether those costs were incurred two-years prior to or are incurred after the effective date of the TIF Agreement.
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 8. Further Authorizations. That this Council hereby authorizes the Director of the Department of Development, the City Clerk, or other appropriate officers of the City (or each’s designee) 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 (or each’s designee) to prepare and sign all agreements and instruments and to take any other actions as may be appropriate to implement this Ordinance.
Section 9. TIF Agreement. 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 the TIF Agreement with the Developer 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 and shall be evidenced conclusively by the written execution and delivery thereof.
Section 10. Appropriation and Expenditure. That the Service Payments and Property Tax Rollback Payments to be deposited into the TIF Fund created by this Ordinance shall be deemed appropriated for the purposes set forth in the TIF Agreement and authorized to be expended therefrom in accordance with the TIF Agreement, and the City Auditor is authorized to make payments to the Developer or its designee from the TIF Fund in accordance with the TIF Agreement 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 11. City Fees. That the City Auditor is authorized to make annual transfers of $5,000 from the Service Payments and Property Tax Rollback Payments in the TIF Fund to the Business Tax Incentive Fund (Fund 2229), subject to the authorization of the Director, for the City’s TIF Administrative / Monitoring Fee in accordance with the TIF Agreement and Ordinance No. 1837-2025 on condition that more than $5,000.00 may be transferred in any one-year if during the prior years there were insufficient Service Payments and Property Tax Rollback Payments to pay the prior years’ annual $5,000.00 fee.
Section 12. Account Codes. 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, or modifications associated with this Ordinance or the transactions contemplated by the TIF Agreement.
Section 13. Balances. 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 14. 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 passage if the Mayor neither approves nor vetoes the same.