Explanation
Background: Ordinance 1699-2020, passed by City Council on November 16, 2020, (the “Rezoning Ordinance”) rezoned the property at or near the northwest corner of the intersection of West Broad Street and Doherty Road and generally located at 5960 West Broad Street (Franklin County Tax ID parcel No. 570-184818, the “Developer Property”) now owned by Crown Pointe, LLC (the “Developer”) and rezoned 6000 W. Broad Street (Franklin County Tax ID Parcel No. 570-301099, the “Adjacent Property”). The Developer purchased the ±9.023 acres encompassing the Developer Property in order to privately invest approximately $18 million to construct one-hundred ninety-two (192) multi-family apartment units and private improvements pursuant to the Rezoning Ordinance. The Rezoning Ordinance necessitates the Developer’s implementation of additional public revenue generating programs on the Developer Property consistent with the Big Darby Accord pursuant to Resolution 0216X-2008 adopted by Columbus City Council on April 20, 2009 (the “Big Darby Revenue Program”). The Big Darby Revenue Program identified three revenue generation sources: tax increment financing (TIF), new community authority (NCA) community development charges, and per unit developer contributions (collectively, the “Big Darby Revenue”) for regionally beneficial public infrastructure improvements and Big Darby Accord purposes. Pursuant to Ordinance 2535-2020 passed by Council on November 23, 2020, the Director of Development entered into a development agreement (the “Big Darby Agreement”) dated December 1, 2020 with an affiliate of the Developer to outline the plans and respective commitments of the City and the Developer for the fulfillment of Big Darby Revenue Program requirements, including establishing new tax increment financing for the Developer Property and the Adjacent Property.
This Ordinance establishes a TIF area under Ohio Revised Code Section 5709.40(B) encompassing the Developer Property as identified on Exhibit A attached hereto (the “West Broad Street TIF”). The West Broad Street TIF provides for a ninety-five percent (95%) exemption from real property taxation on improvements to the parcels within the West Broad Street TIF for a not more than a thirty (30) year coextensive period for all parcels within the West Broad Street TIF. South Western City Schools will receive, in the same manner as usual, all amounts that they would have received in real property taxes had the tax exemption not been granted. Annual service payments in lieu of taxes will be made by the owners of each parcel with respect to the exempted improvements of the West Broad Street TIF parcels. The applicable portion of those service payments will be distributed directly to South Western City Schools. The remaining non-school portion of those service payments paid to the City for deposit into the appropriate TIF fund established in this Ordinance will be used to finance public infrastructure improvements identified on Exhibit B attached hereto and directly benefiting the West Broad Street TIF parcels. The Department of Development will submit subsequent legislation to City Council for the appropriation and authorized expenditure of the non-school service payments for the public infrastructure improvements in accordance with an authorized TIF or cooperative agreement.
Emergency Justification: Emergency legislation is required to allow for immediate effectiveness of this Ordinance to establish the TIF prior to the assessment of any new improvements to the TIF parcels at the end of the year in order to maximize revenue available for the public infrastructure improvements.
Fiscal Impact: No funding is required for this legislation. The City is foregoing ninety-five percent (95%) of the real property tax revenue that it would have received from development on the TIF parcels. Instead, the non-school portion of that revenue will be diverted to the TIF fund to support public infrastructure improvements.
Title
To create the West Broad Street TIF encompassing undeveloped parcel(s) within the City at 5960 West Broad Street (Parcel No. 570-184818); to declare improvements to those parcel(s) to be a public purpose and exempt from real property taxation; to require the owners of those parcel(s) to make service payments in lieu of taxes; to require the distribution of the applicable portion of those service payments to the South Western City Schools; to establish a municipal public improvement tax increment equivalent fund for the deposit of the remainder of those non-school service payments; and to declare an emergency. (AMENDED BY ORD. 3154-2022 PASSED 11/21/2022) BA
Body
WHEREAS, Crown Point LLC (the “Developer”) is developing an approximately 9.023-acre site near the northwest corner of the intersection of West Broad Street and Doherty Road and generally located at 5960 West Broad Street within the municipal corporate boundaries of the City (Franklin County Tax ID parcel No. 570-184818, the “Developer Property”) as depicted on Exhibit A attached hereto; and
WHEREAS, the Developer is investing $18 million to construct on the Developer Property eight three-story multi-family residential apartment buildings with 192 units, appropriate associated amenities, and surface and structured parking necessary to support those uses (the “Project”); and
WHEREAS, in order to successfully develop the Project and fulfill requirements of the Big Darby Accord, certain public infrastructure improvements identified in Exhibit B attached hereto (collectively, the "Public Infrastructure Improvements" and each a "Public Infrastructure Improvement") will need to be designed and constructed; and
WHEREAS, in keeping with Ordinance 1699-2020 rezoning the Developer Property and as authorized by Ordinance 2535-2020, the Director of the Department of Development entered into a development agreement dated December 1, 2020 with an affiliate of the Developer (the “Big Darby Agreement”); and
WHEREAS, under the Big Darby Agreement, the Developer has agreed to be responsible for initially bearing design and construction costs including the costs of financing thereof associated with certain regionally beneficial Public Infrastructure Improvements while the City will be responsible for Big Darby Accord Public Infrastructure Improvements; and
WHEREAS, the Big Darby Agreement outlined the plans and respective commitments of the City and the Developer to implement additional public revenue generating programs on the Developer Property consistent with the Big Darby Accord pursuant to Resolution 0216X-2008 adopted by Columbus City Council on April 20, 2009 (the “Big Darby Revenue Program”) including establishing a new tax increment financing area over the Developer Property (the “West Broad Street TIF”) to finance the Public Infrastructure Improvements; and
WHEREAS, Ohio Revised Code (“ORC”) Sections 5709.40, 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 to the subjected school districts and the City, establish a municipal public improvement tax increment equivalent fund for the deposit of those non-school service payments, and specify the purposes for which money in that fund will be expended; and
WHEREAS, to facilitate the desired development of the Developer Property and the Big Darby Accord area and to pay 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 encompassing the Developer Property (the “West Broad Street TIF”) to exempt from taxation ninety-five percent (95%) of the improvements to each parcel within the West Broad Street TIF (collectively the “Parcels” and each a “Parcel”) as permitted and provided in ORC Section 5709.40(B), as applicable, for up to a thirty (30) year coextensive 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 (the “Service Payments”), in the same amount as they would have made real property tax payments but for the exemptions provided by this Ordinance; and
WHEREAS, in accordance with the Big Darby Revenue Program, the five percent (5%) of the real property taxes of the improvements to each Parcel not exempted from taxation pursuant to this Ordinance will be distributed directly to Franklin County and the county-wide levy agencies; and
WHEREAS, the City has determined that the applicable portion of the Service Payments shall be paid directly to South Western 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 ORC 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 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 by ORC Sections 5709.40 and 5709.83, respectively; and
WHEREAS, an emergency exists in the daily operations of the Department of Development such that the West Broad Street TIF must be immediately established before the end of the year prior to the assessment of any new Project improvements to the Parcels to maximize the revenue available for the Public Infrastructure Improvements all 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. Parcels and Creation of TIF Area. The real property subject to this Ordinance is identified and depicted on Exhibit A (as currently or subsequently configured, the “Parcels”, with each individual parcel, a “Parcel”) and pursuant to the TIF Statutes, this Council hereby creates a new tax increment financing area (the “West Broad Street TIF”) the boundaries of which shall be coextensive with the boundary of, and shall include, the Parcels.
Section 2. Public Infrastructure Improvements. This Council hereby designates the public infrastructure improvements described in Exhibit B (the “Public Infrastructure Improvements”) 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 3. Exemption. Pursuant to Ohio Revised Code (“ORC”) Section 5709.40(B), this Council hereby finds and determines that ninety-five percent (95%) 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 ORC 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 contemporaneously for all Parcels with the first tax year that begins after the effective date of this Ordinance and in which an 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 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 exemption provided by this ordinance is subordinate to any exemption for a Parcel granted pursuant to ORC Section 3735.65 et. seq. (community reinvestment area), ORC Section 5709.61 et. seq. (enterprise zone) and ORC Section 5709.08 (government and public property).
Section 4. Service Payments. As provided in ORC Section 5709.42, the current and future owners of each Parcel (each individually an “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 ORC 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 5. TIF Fund. This Council establishes, pursuant to and in accordance with the provisions of ORC Section 5709.43, the West Broad Street 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 South Western City Schools (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). 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 ORC Section 5709.43.
Section 6. Distributions; Payment of Costs. 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 financing 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 7. Further Authorizations. This Council hereby authorizes the Director 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. This Council further authorizes the Director 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 8. TIRC. 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 9. 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.