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09-04 OrdinanceRECORD OF ORDINANCES Blank.lnc. Ordinance No. 09-04 Passed , 20 AN ORDINANCE CREATING THE TARTAN WEST INCENTIVE DISTRICT, DECLARING IMPROVEMENTS TO CERTAIN REAL PROPERTY WITHIN THAT INCENTIVE DISTRICT TO BE A PUBLIC PURPOSE, DESCRIBING THE PUBLIC INFRASTRUCTURE IMPROVEMENTS TO BE MADE TO BENEFIT THAT PARCEL, REQUIRING THE OWNER THEREOF TO MAKE SERVICE PAYMENTS IN LIEU OF TAXES, PROVIDING FOR THE UNION COUNTY TREASURER TO DISTRIBUTE SERVICE PAYMENTS TO THE DUBLIN CITY SCHOOL DISTRICT IN THE AMOUNT IT WOULD OTHERWISE RECEIVE ABSENT THE EXEMPTION, CREATING A MUNICIPAL PUBLIC IMPROVEMENT TAX INCREMENT EQUIVALENT FUND FOR THE DEPOSIT OF THE BALANCE OF SUCH SERVICE PAYMENTS, AND AUTHORIZING THE EXECUTION OF A TAX INCREMENT FINANCING AGREEMENT AND ONE OR MORE INFRASTRUCTURE AGREEMENTS, AND DECLARING AN EMERGENCY. WHEREAS, "Tartan Development Company West, LLC" (the "Owner") now owns the parcels of real property (a depiction of which is attached hereto as Exhibit A, with the parcels comprising the real property referred to herein as the "Parcels" and each individually as a "Parcel") which are located in the City; and WHEREAS, Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 (the "TIF Statutes") provide that this Council may create an incentive district for parcels of real property located in the City, and declare improvements to these parcels of real property located in the incentive district to be a public purpose, thereby exempting those improvements from real property taxation, specify the life of the incentive district, specify public infrasU-ucture improvements that directly benefit those parcels, provide for payments in lieu of taxes by the owners of the parcels, provide for the distribution of the applicable portion of those service payments to the Dublin City School District, and establish a municipal public improvement tax increment equivalent fund; and WHEREAS, the Owner, or its successors or assigns, has or will develop certain residential and commercial projects within the District (collectively, the "Project") and desires that the public infrastructure improvements described on Exhibit B hereto (the "Public Infrastructure Improvements") be constructed and installed, and agrees that the Public Infrastructure Improvements will benefit the Property; and WHEREAS, this Council finds that the Public Infrastructure Improvements described in Exhibit B attached hereto will directly benefit the Property; and WHEREAS, by Resolution No. 02-04, adopted on January 5, 2004, this Council approved an Economic Development Plan (the "Development Plan") for the incentive district created by this Ordinance, which plan is on file in the office of the Clerk of Council; and WHEREAS, the City Engineer has certified to this Council that (i) the specific parcels of real property described and depicted on Exhibit A attached to this ordinance (the "Property") are located in the City, (ii) the Property is less than 300 acres in size, (iii) the Property is enclosed by a continuous boundary, and (iv) the existing public infrastructure serving the Property is inadequate to meet the development needs of the Project as evidenced by the Development Plan; and WHEREAS, the City is desirous of encouraging cohesive developments designed to improve the quality of life of the residents of the City, and WHEREAS, the Tartan West development assembles approximately 251 acres under one, coordinated, comprehensive land use plan with quality design and architectural character, that set a high standard for the area, and WHEREAS, the Tartan West development provides a variety of housing choices and adds community amenities such as a wellness/fitness center, recreational opportunities and a public gathering place, and WHEREAS, the Tartan West development will provide the opportunity to mitigate water pressure problems and improve current roadway infrastructure for existing residents, and RECORD OF ORDINANCES Blank, Inc. Ordinance No. 09-04 Passed page 2 , 20 WHEREAS, pursuant to Section 5709.40(C) of the Ohio Revised Code and the Development Plan, this Council has determined to create an incentive district known as the "Tartan West Incentive District" (the "District") the boundary of which shall be coterminous with the boundary of the Property; and WHEREAS, this Council has determined that it is necessary and appropriate and in the best interest of the City to exempt from taxation improvements to Parcels located within the District as permitted and provided in Section 5709.40(C), Revised Code, and to simultaneously direct and require the current and future owner(s) of Parcels within the District to make annual service payments in lieu of the real property tax payments they would have made except for the exemption provided by this Ordinance, which service payments shall be made to the Union County Treasurer on or before the final dates for payment of real property taxes pursuant to Section 5709.42 of the Ohio Revised Code; and WHEREAS, this Council has determined to provide for the execution and delivery of a Tax Increment Financing Agreement and an Infrastructure Agreement, to provide for the development of the District; and WHEREAS, the City has determined that a portion of the service payments shall be paid to the Dublin City School District in an amount equal to the real property taxes that the Dublin City School District would have been paid if improvements to the Parcels had not been exempted from taxation pursuant to this Ordinance; and WFIEREAS, this Council finds and determines that notice of this proposed Ordinance has been delivered to all affected school districts in accordance with Sections 5709.40 and 5709.83 of the Ohio Revised Code and hereby ratifies the giving of that notice; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Delaware, Franklin and Union Counties, Ohio, that: Section 1. Creation of Incentive District. Pursuant to Section 5709.40(C) of the Ohio Revised Code, this Council hereby creates the "Tartan West Incentive District", the boundary of which shall be coterminous with the boundary of the Property and the Parcels included therein, which Parcels are identified by their respective parcel numbers in Exhibit A attached hereto. The District shall have a life commencing on the effective date of this Ordinance and terminating on December 31 of the last year in which Service Payments (as defined below) have been paid in connection with Improvements (as defined below) on the Property. Pursuant to Section 5709.40(A)(5), the City Engineer has certified to this Council that (a) the District is less than 300 acres in size, (b) the District is enclosed by a continuous boundary, and (c) the existing public infrastructure serving the District is inadequate to meet the development needs of the Property. Section 2. Tax Exemption. Pursuant to and in accordance with the provisions of Ohio Revised Code Section 5709.40, this Council hereby finds and determines that 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 "Irnprovement" as defined in Section 5709.40) is hereby declared to be a public purpose, and shall beexempt from taxation for a period commencing 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 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 Ohio Revised Code. Section 3. Payment of Service Payments. As provided in Ohio Revised Code Section 5709.42, the owner of each Parcel is hereby required to, and shall make, service payments in lieu of taxes with respect to the Improvements allocable thereto to the Treasurer of Union County, Ohio (the "County Treasurer") on or before the final dates for payment of real properly taxes. Each service payment i n lieu o f taxes s hall be c harged and c ollected i n the s ame m anner and i n the s ame amount as the real property taxes that would have been charged and payable against that Parcel if it were not exempt from taxation pursuant to Section 2. Any late payments shall be subject to penalty and bear interest at the then current rate established under Ohio Revised Code Sections 323.121(B)(1) and 5703.47, 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 payment of penalties and RECORD OF ORDINANCES Blank, Inc. Ordinance No. 09-04 Passed Page 3 20 interest are collectively referred to herein with the service payments in lieu of taxes as the "Service Payments"). The Service Payments, and any other payments in respect of each Parcel which are received by the County Treasurer in connection with the reduction required by Ohio Revised S ection 3 19.302, as t he s ame may be a mended from time t o t ime, o r a ny s uccessor provisions thereto as the same may be amended from time to time (the "Property Tax Rollback Payments"), shall be allocated and distributed in accordance with Section 4 of this Ordinance. Section 4. Distribution of Payments to School District and City. Pursuant to Ohio Revised Code Sections 5709.40 and 5709.42, the County Treasurer shall distribute from each Service Payment and Property Tax Rollback Payments to the Dublin City School District the amount that the Dublin City School District would otherwise receive as real property tax payments (including the applicable portion of any Property Tax Rollback Payments) derived from the Improvement related to the Parcels absent the passage of this Ordinance, and shall distribute all remaining amounts to the City for further deposit into the Fund. All distributions required under this Section 4 shall be made at the same time and in the same manner as real property tax distributions. Section 5. Creation of TIF Fund. This Council hereby establishes pursuant to and in accordance with the provisions of Ohio Revised Code Section 5709.43, the Tartan West Project Municipal Public Improvement Tax Increment Equivalent Fund (the "Fund"). The Fund shall be maintained in the custody of the City and shall receive all distributions required to be made to the City pursuant to Section 4. Those Service Payments and Property Tax Rollback Payments received by the City with respect to the Improvements on the Parcels and so deposited pursuant to law as provided in Ohio Revised Code Section 5709.42 shall be used solely for the purposes authorized in Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43, including, but not limited to, paying debt service on any City securities issued to finance the Public Infrastructure Improvements and paying any costs of the Public Infrastructure Improvements. For purposes of this Ordinance, "costs" of the Public Infrastructure Improvements payable from the Fund shall also include the items of "costs of permanent improvements" set forth in Section 133.15(B), Revised Code, and incurred with respect to the Public Infrastructure Improvements. The Fund shall remain in existence so long as such Service Payments and Property Tax Rollback Payments are collected and used for the aforesaid purposes, after which time said Fund shall be dissolved and any surplus funds remaining therein transferred to the City's General Fund, all in accordance with Ohio Revised Code Section 5709.43. Section 6 . Public I nfrastructure I mprovements. T he P ublic I nfrastructure I mprovements s et forth in Exhibit B hereto are hereby designated as those public infrastructure improvements that directly benefit, or that once made will directly benefit, the Property. Section 7. T1F Agreement. The Tax Increment Financing Agreement relating to the District, in the f orm p recently o n f ile with t he C Jerk o f C ouncil, p roviding f or, a mong o ther t hings, t he payment of such Service Payments, is hereby approved and authorized with changes therein not inconsistent with this Ordinance and not substantially adverse to this City and which shall be approved by the City Manager. The City Manager, for and in the name of this City, is hereby authorized to execute that Tax Increment Financing Agreement, provided further that the approval of changes thereto by that official, and their character as not being substantially adverse to the City, shall be evidenced conclusively by the execution thereof. This Council further hereby authorizes and directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance, or other appropriate officers of the City, to make such arrangements as are necessary and proper for collection of said Service Payments from the owners of the Parcels. Section 8. Infrastructure Agreement. The form of Infrastructure Agreement relating to the District, in the form presently on file with the Clerk of Council, providing for, among other things, the construction of certain of the Public Infrastructure Improvements, is hereby approved and authorized with changes therein not inconsistent with this Ordinance and not substantially adverse to this City and which shall be approved by the City Manager. The City Manager, for and in the name of this City, is hereby authorized to execute the Infrastructure Agreement, provided further that the approval of changes thereto by that official, and their character as not being substantially adverse to the City, shall be evidenced conclusively by the execution thereof. This Council further hereby authorizes and directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance, or other appropriate officers of the City, to make such RECORD OF ORDINANCES Blank, Ordinance No. 09-04 Passed Page 4 2~ arrangements as are necessary and proper for the construction of the Public Infrastructure Improvements. Section 9. Further Authorizations. This Council further hereby authorizes and directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance, or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as maybe appropriate to implement this Ordinance. Section 10. Notification of Passage. Pursuant to Ohio Revised Code Section 5709.40, the Clerk of t his C ouncil is h ereby d irected t o d eliver a c opy o f t his O rdinance to t he D irector o f t he Department of Development of the State of Ohio within fifteen days after its passage. On or before March 31 of each year that the exemption set forth in Section 2 hereof remains in effect, the C Jerk o f C ouncil o r o ther a uthorized o fficer o f this C ity s hall p repare and s ubmit t o t he Director of the Department of Development of the State of Ohio the status report required under Section 5709.40(E) of the Ohio Revised Code. Section 11. Open Meetings. This Council finds and determines that all formal actions of this Council concerning and relating to the passage of this Ordinance were taken in an open meeting of this Council and that all deliberations of this Council that resulted in those formal actions were in meetings open to the public in compliance with the law. Section 12. Effective Date. This Ordinance is declared to be an emergency measure necessary for the immediate preservation of the public peace, health, safety or welfare of this City and for the further reason that this Ordinance is required to be immediately effective to allow the City to timely commence the construction of the Public Infrastructure Improvements thereby facilitating the development of the Project and improving traffic flow in the proximate area of the Tartan West Incentive District and providing for enhanced pedestrian and traffic safety, this Ordinance shall be in full force and effect immediately upon its passage. Passed this ~ day of // 1 , 2004. .. Mayor -Presiding Offi e ATTEST: Clerk of Council I hereby certify that copies of this Ordinance/Resolution were posted in the City of Dublin in accordance with Section 731.25 of the Ohio Revised Code. Deputy Clerk of Council, Dublin, Ohio EXHIBIT A DESCRIPTION OF THE DISTRICT The following real estate situated in the City of Dublin, County of Union and State of Ohio, as bounded and described as follows: Tax Parcels No. 1360000112000, No. 1370000024000, No. 1370000017000, No. 1360000112001, No. 1370000036000, No. 137000001900 and No. 1370000037000 ,~ A-1 EXHIBIT B DESCRIPTION OF PUBLIC INFRASTRUCTURE IMPROVEMENTS The Infrastructure Improvements include the construction o£ • Avery-Muirfield/Brand Road Intersection improvements • Hyland-Croy/Brand Road intersection improvements • Avery Road/Brand Road intersection improvements • Post/Hyland-Croy intersection improvements • Glick/Avery/Manley roundabout • Water tower • Booster station • Hyland-Croy pedestrian tunnel • Sewer line to the site • Water line over sizing -along Hyland-Croy • Sewer line over sizing -- through site • Public park development • Bike paths • Fees • Club Drive • Other roadway improvements on Hyland-Croy • Other roadway improvements on Manley • Manley pedestrian tunnel • Glick Road Cul-de-sac/Roma Drive • Water line along Hyland-Croy to serve only Tartan West • Sewer line through site to serve only Tartan West • Interest costs • Fees Constructing and installing curbs and gutters, public utilities which include water mains, sanitary sewer, and storm sewer, burial of utility lines, street lighting, sidewalks, bikeways, and landscaping, traffic signalization, and including design and other related costs, any right-of--way acquisition, erosion and sediment control measures, grading and other related work, survey work, soil engineering and construction staking, and in each case, all other costs and improvements necessary and appurtenant thereto. 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Brautigam, City Manager ~a,,,,,,,f 5 , b ~--- Date: February 25, 2004 Initiated By: Marsha L Grigsby, Deputy City Manager/Director of Finance '~c~Q~-- Memo Re: Ordinance No. 09-04, Tartan West Tax Increment Financing District SUMMARY: As previously identified, the Tartan West development includes 104.5 acres of parkland/open space with 71.3 acres identified as public and 33.2 acres of private. All of the parkland will be maintained privately. A question was raised at the February 17, 2004 City Council meeting as to how the public and private parkland would be identified. A map of the Open Space Plan is attached for your reference. As shown on the map, the majority of the private parkland is located in the southern half of the site and around the two-single family cluster areas and the condo subarea at the southeastern portion of the site. The bikepath system will be located throughout the public and private parkland areas. The parkland identified as private was done so to limit programming and provide for passive areas to the immediate or surrounding neighborhoods. The cluster homes will be targeting the empty-nester market. RECOMMENDATION: Information provided to respond to a request from the February 17, 2004 City Council meeting. Staff is recommending the adoption of Ordinance No. 09-04 on an emergency basis at the March 1, 2004 City Council meeting. T:\2004\012-ORD09-04 MEMO.doc TARTAN WEST I. LOCATION MAP G ~- - ~9~ ~ r~; ~~93 ~_ yyII ._. ~_ ~ r- - / ~ 1 0~ I ~ I ~. y ~~- .rn~ ___ `l/ _. II. PERMITTED USES - F ~ „ ~:~ ,~ ~: _, , . e ~ a_ Dwelling • Themed Communities -Cluster homes targeting the empty- nester market Parks • Open spaces, playgrounds and other related program elements and park features intended to provide for passive amenities to the immediate or surrounding neighborhoods, while limiting off-site impact. • The targeted and anticipated open space for this sub-area will total X6.2 acres. 2.4 acres being publicly owned and 3.8 acres being privately owned. All open space areas will be privately maintained by a home owners association. • The developer maintains the right to minor modifications of the current open space plan for this sub-area, provided that the total open space area for the entire development remains 100 acres, minimum, subject to Final Development Plan approval by the Planning and Zoning Commission. TARTAN WEST I. LOCATION M AP a ~,, ~ ;. ~/ ~:, ,i ;~ ~~: .e, __ ~ ,o ~~ ~. _ ~F _ ~- ,__~' -;- t~- ~ ~:~ n - ,:~ . II. PERMITTED USES Dwelling • Themed Communities -Attached condominium homes (two to five units per structure) Parks • Open spaces, playgrounds and other related program elements and park features intended to provide for passive amenities to the immediate or surrounding neighborhoods, while limiting off-site impact. • The targeted and anticipated open space for this sub-area will total 116.4 acres, 8.2 acres being publicly owned and 8.2 acres being privately owned. All open space areas will be privately maintained by a home owners association. • The developer maintains the right to minor modifications of the current open space plan for this sub-area, provided that the total open space area for the entire development remains TARTAN WEST I. LOCATION MAP s -- _°,~~- -_ -- -- --- - =1 _ _ .-, i' ~ ~ _ I ~~ ~` ~ i i ~_ .:~ ~ ~ r. ,~~ a =3~a ~ ~. ~~. o '~-~ ~.j~i:d'~~~'t ~ ~ 1 ~ ~ snv_s i ~o ~a2 I ,- ,~ ~~ ~ ~. ~~a `~- i _~ ~ r _ , ~~;~,, ~ ~.~ ~o ~ ~ i T-~ -~,i ,-,_;_~ ,, _ ~ o~- ~ ~ ~ ~ ~~ 1') `~~ ~ j ~ -fib r, ~ .~ ~ - ,. ~, ,~ - II. PERMITTED USES Dwelling • Themed Communities -Cluster homes targeting the empty- nester market Parks • Open spaces, playgrounds, community gardens (ornamental in nature) and other related program elements and park featwes intended to provide for passive amenities to the immediate or surrounding neighborhoods, while limiting off- site impact. • The park dedication shall include a preserved barn for use by the City as a storage facility. • The targeted and anticipated open space for this sub-area will total f25.6 acres, 5.8 acres being public and 19.8 acres being private. All open space areas will be privately maintained by a home owners association. Office of the City Mana er 5200 Emerald Parkway • Dubin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 CITY OF DUBLIN Memo To: Members of the Dublin City Council From: Jane S. Brautigam, City Manager <JCZ,,,.~5 ~ ~~.,,~,ti,,,J Date: February 11, 2004 Initiated By: Marsha I. Grigsby, Deputy City Manager/Director of Finance'~~~- Michael H. Stevens, Director of Economic Development Re: Ordinance No. 09-04 -Tartan Development Company West, LLC Summary: Ordinance No. 09-04 authorizes the execution of a Tax Increment Financing (TIF') Agreement and establishes the Tartan West Tax Increment Equivalent Fund. The TIF will provide an additional revenue source to fund several public infrastructure improvements that are in the adopted 2004 - 2008 Capital Improvements Program and partially fund necessary infrastructure improvements associated with the Tartan West development. As City Council is aware (see attached memo, January 23, 2004) staff has been discussing the establishment of a commercial/residential non-school TIF with Tartan Development Company West, LLC over the last several months. The TIF service payments will be used to reimburse infrastructure cost estimated at $14.8 million. By approving the Ordinance City Council will be doing three things; (1) establishing the Tartan West TIF district, (2) authorizing the execution of a TIF Agreement (see attached), and (3) authorizing the execution of an Infrastructure Agreement (see attached). Tartan West TIF District The Tartan West TIF District consists of the entire Tartan West development that was recently rezoned by City Council. The TIF District will include both commercial and residential development, with the majority of the development being residential. The planned commercial development is the wellness/fitness center that will be part of the initial development. The planned residential development includes 61 new single-family lots, 160 cluster dwelling units, 186 condominium units, and 75 residential units. As stated earlier the TIF District will be established as anon-school, meaning that the schools will continue to receive their share of the property tax revenue generated by this development. The TIF is for a 30-year period, although current estimates have the infrastructure payments being reimbursed in 13 years after payment in lieu of taxes (service payments) are initiated. Financial Benefits The total improvement costs identified in the Description of the Public Infrastructure are estimated to be approximately $14.8 million. The offsite improvements that provide a significant benefit to the general public will be paid by the City and reimbursed through the TIF. These improvements total over $9'.6 million (of which more than $5 million already is programmed in the current CIP for some of these Memorandum February 12, 2004 Page Two specific improvements). After the City is reimbursed through the TIF, Tartan West will be reimbursed approximately $4.8 million for onsite improvements that provide some benefit to the general public. The City will be reimbursed for several already programmed projects thus creating a future revenue stream of more than $5 million that can be utilized to complete other needed improvements that have been identified but not programmed due to funding limitations. The City will complete these already programmed projects (in the 2004 and 2005 CIP) and be reimbursed over time through service payments. The reimbursement via service payments will "free up" currently programmed income tax and/or water user fees for other projects. Identified CIP projects funded by the TIF include intersection improvements to Avery-Muirfield/Brand Road, Hyland Croy/Brand Road, Avery Road/Brand Road, Post Road/Hyland Croy, and the Glick/Avery/Manley roundabout. These offsite improvements provide a benefit to the Tartan West development; however, the general public will receive a more significant benefit. Water system improvements totaling nearly $1.5 million currently are programmed for initiation in 2004. The reimbursement of these improvements through TIF service payments can provide a funding source to be applied to programming other water system improvements, such as extending water lines to areas that currently do not have access to the public system. Based on the current build-out schedule and estimated values for the wellness/fitness center and the homes provided by representatives from Tartan Development Company West and the current millage rates, it is estimated the public infrastructure improvements identified in the Ordinance and the TIF agreement will be reimbursed over a period of 13 years. The City will be reimbursed first and then the developer will be reimbursed for the improvements identified in Category C. In addition to the public infrastructure improvements that are identified in the TIF, the developer is investing an additional $10.3 million in infrastructure improvements for roadways, bikepaths and site improvements, including landscaping. As previously mentioned, the public parkland dedication exceeds the required dedication. The required dedication for this site is 31.5 acres and the public parkland dedicated will be 71.3 acres. The value of the excess dedication is approximately $1.6 million. In addition to the public parkland, there is an additional 33.2 acres that will be private parkland/greenspace. Currently, it is estimated that the total value of the housing to be constructed in the development will be $240 million or an average of $546,000 per unit. The units will range from an estimated cost of $360,000 to $800,000 per unit. The development will also include awellness/fitness center that is estimated to cost in excess of $19 million to construct. Impact on Other Governmental Jurisdictions The proposed Tartan West TIF is anon-school TIF and therefore would not financially impact the Dublin City School District (the District). The District's millage and property tax revenue collected will be the same as if the TIF district were not established. Memorandum February 12, 2004 Page Three The other governmental jurisdictions included in the TIF district are: Union County, Tolles Joint Vocational School District, Washington Township and the City of Dublin. The governmental entities have both "inside" (unvoted) and "outside" (voted) millage. It is estimated that $204,000,000 in new property value from the construction of the homes and the wellness/fitness center will be generated for TIF purposes by tax year 2010 and the annual impact from "inside" millage will be as follows: Union County $242,760 Tolles Joint Vocation School District 35,700 Washington Township 28,560 City of Dublin 124,950 $431,970 With the exception of the City, the revenues are credited to the governmental entities' General Fund. The "inside" millage is not subject to the reduction factor that is set by the state each year and therefore results in the above property taxes revenues being directed to the City for the defined public infrastructure improvements instead of the governmental entities identified. The "outside" millage is adjusted annually by a reduction factor; therefore the added property value from the Tartan West development would not result in additional property tax revenues to the governmental entities identified if the TIF district was not established. The reduction factor results in the "outside" millage being adjusted annually to take into account increases in property values that make up each governmental entities assessed valuation. By not including the future property value from the Tartan West development in the assessed value for the governmental entities, the adjustment to the "outside" millage will be slightly less. In the last six tax years, the City's assessed value has increased by approximately 58%. Assuming that in the next six years the City's assessed value will be increased by 20% and assuming Washington Township's assessed value is the same as the City's (conservative approach), it is estimated the reduction to the "outside" millage for Washington Township and the City of Dublin would be approximately three-tenths of one mill (0.3). This equates to approximately $26 per year for a property with a value of $250,000. This is not an increase; it is an estimated amount of a possible decrease if the TIF district were not established. Adjustments to "outside" millage are difficult to project because of the uncertainty of what future development will occur and the changes in the real estate market which is utilized to determine property values by the County Auditors. Other Residential development has been an important driver of the City's economic development success. The public infrastructure improvements will allow for new economic development in the northwest region, improve access to the Jerome High School site and provide the desired housing for the employees of our businesses and the growing empty nester population. Memorandum February 12, 2004 Page Four The proposed TIF District is located in a fast growing residential area with original infrastructure that was built to handle rural land uses. The approved PUD allows for housing that targets the "empty- nester" market. This market is currently underserved in the Dublin community but is an important economic development component as the City's population has become less transient and more mature. The establishment of a TIF district for this residential development will not obligate the City to establish fiiture TIF's for residential development. This area has significant existing infrastructure needs that can be funded via this TIF and this development has unique elements that do not exist in most residential development, the most significant being its size. It is possible that other residential developers will inquire about utilizing a TIF; however, similar to how the City has structured its economic development incentives, each development would be reviewed and evaluated based on its own merits. Recommendation: Staff is recommending the adoption of Ordinance No. 09-04 on an emergency basis, at its March 1, 2004 Council meeting. C i~ :Public Improvements -Category A :Public Improvements -Category B :Public Improvements -Category C Office of the City Mana er 5200 Emerald Parkway • Dubin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 CITI' OF Di?P,LIN Memo To: Members of the Dublin City Council From: Jane S. Brautigam, City Manager Date: February 11, 2004 `~ Initiated B Paul A. Hammersmith P.E., Director ofEngineering/City Engineer \~ Y Re: Tartan West Development Plan Summary: City Council passed Resolution No. 02-04 on January 5, 2004, establishing the Tartan West Economic Development Plan. The Division of Engineering certifies that the specific parcels of real property depicted in the Tartan West Economic Development Plan (i) are located in the City, (ii) the property is less than 300 acres in size, (iii) the property is enclosed by a continuous boundary, and (iv) the existing public infrastructure serving the property is inadequate to meet the development needs of the project as evidenced by the development plan. Recommendation: For information only. Tartan West Economic Development Plan Prepared by: City of Dublin Division of Economic Development December 30, 2003 Background The creation of a Tax Increment Financing (TIF) District is being proposed for an area north of Brand Road, directly east of Hyland-Croy Road. The proposed TIF District will partially fund necessary infrastructure improvements for the Tartan West proposed development. Proposed Development The area of the proposed TIF District was rezoned from Rural District to a Planned Unit Development (PUD) District that includes 61 new single-family lots, 160 cluster dwelling units, 186 condominium units, 75 residential units, a 13-acre pond and 100 acres of open space. The proposed development provides for alarge-scale (approximately 251 acres) cohesive development that will provide diverse housing and set an extraordinary high standard of architecture for the northwest area of the City. The proposed development also includes a staffed 78,878 square foot fitness/wellness center. While located within the suburban context, the proposed development significantly is changing the rural character of the site, impacting the surrounding roads that were originally designed and built to the rural county standard. Analysis and Assessment As part of the rezoning process the City of Dublin required a traffic study to be submitted by the developer. The City's Division of Engineering accepted the finalized Traffic Impact Study in August of 2003 from EMH&T, who prepared it on behalf of the Tartan West developer. The Traffic Impact Study identified significant public traffic improvements that are necessary to support the growth in this area of the City and specifically the Tartan West development. In addition to the traffic improvements included in the Traffic Impact Study it has been determined that the planned intersection improvements at Muirfield Drive and Brand Road also will benefit the Tartan West development. Jerome High School is scheduled to open in September 2004, and these proposed public traffic improvements also would help alleviate the peak hour congestion and improve the safety of the roads in the northwest area by upgrading them to City design standards. As part of the Tartan West development a new water tower and booster station need to be installed. This will improve the existing water system by creating a new pressure district. Residential development has been an important driver of the City's economic development success. The public infrastructure improvements will allow for new economic development in the northwest region, improve access to the Jerome High School site and provide the desired housing for the employees of our businesses as well as the growing empty nester population. - 1- Conclusion The proposed TIF District is located in a fast growing residential area with original infrastructure that was built to handle rural land uses. The approved PUD allows for housing that targets the "empty-nester" market. This market currently is underserved in the Dublin community but is a critical economic development component as the City's population has become less transient and more mature. Attachments Attachment A -Tartan West Development -Depicts Tartan West in the context of the area. Attachment B -Tartan West Site Impact Analysis Executive Summary -2- C I'I#~ Public Improvements -Category A Public Improvements -Category B Public Improvements -Category C ATTACHMENT B Tartan West Sitc Impact Analysis Executive Summary A. Signalize the Post Rood/State Route 161 Southbound Ramps lntersection 8. Contribute to signalizotion of the Post Road/Hyland & Croy Road intersection when warranted. C. Contribute to signo/izotion of the Hyland & Croy Road/Mitche/l Dewitt intersection when warranted. D. Contribute to the signo/izotion of the Jerome-Manley/Avery Rood/G/ick Rood intersection when warranted. SITE TRAFFIC IMPROI/EME-NTS 1. Contribute to signalizotion of the Post Rood/Hy/and & Croy Rood intersection when warranted. 2. Contribute to signo/izotion of the Hyland & Croy Rood/Mitchell Dewitt intersection when warranted. 3. Contribute to the signo/izotion of the Jerome-Manley/Avery Road/click Road intersection when warranted. 4. Widen Hyland & Croy Rood to provide for o NB right turn lone of the West Site Or 5. Widen Hyland & Croy Rood to provide for o SB left turn lone of the West Site Or. 6. Widen Hy/and & Croy Rood to provide for a NB right turn /one of the South Site Or. 7. Widen Jerome-Manley Rd to provide for o NB left turn /one of the Eost Site Drive. 8. Provide for exclusive westbound left and right turn /ones on the West Site Drive of Hy/and & Croy Rood. PUBL lC TRAFFIC lMPI`~O l/EMENTS TAX INCREMENT FINANCING AGREEMENT This Tax Increment Financing Agreement (the "Agreement"), made and entered into as of this day of , 2004, by and between the CITY OF DUBLIN, OHio (the "City"), a municipal corporation organized and existing under the constitution and the laws of the State of Ohio, and Tartan West (the "Developer" and together with any subsequent owners of any of the Parcels comprising the hereinafter defined Property, the "Owners"), an Ohio limited liability company with offices located in the City. WITNESSETH: WHEREAS, the Developer has acquired by deed certain real property located within the City (which property is depicted on Exhibit A which is attached hereto and incorporated by reference and such property is referred to herein as the "Property" and each individual parcel comprising the Property being referred to herein as a "Parcel"); and WHEREAS, the Developer will make, or cause to be made, certain private improvements upon the Property (which private improvements are more fully described on Exhibit B which is attached hereto and incorporated by reference and such private improvements are collectively referred to herein as the "Project"); and WHEREAS, the Developer desires that certain public infrastructure improvements (which public infrastructure improvements are more fully described on Exhibit C which is attached hereto and incorporated by reference and such public infrastructure improvements are collectively referred to herein as the "Public Improvements") be constructed and installed, and agrees that the Public Improvements will benefit the Property; and WHEREAS, prior to the passage of the TIF Ordinance (as defined below), the City provided notice of the proposed passage of the TIF Ordinance to any affected school districts as required by Ohio Revised Code Sections 5709.40 and 5709.83; and WHEREAS, by Resolution No. 02-04, adopted on January 5, 2004, the City Council approved an Economic Development Plan (the "Development Plan") for the incentive district created by the TIF Ordinance, which plan is on file in the office of the Clerk of Council; and WHEREAS, the City Engineer has certified to the City Council that (i) the Property is located in the City, (ii) the Property is less than 300 acres in size, (iii) the Property is enclosed by a continuous boundary, and (iv) the existing public infrastructure serving the Property is inadequate to meet the development needs of the Project as evidenced by the Development Plan; and WHEREAS, the City has determined that it is necessary and appropriate and in the best interests of the City to provide for the Owners, and their successors and assigns, to make service payments in lieu of taxes with respect to the Property to pay costs of the construction of the Public Improvements and for distribution to the Dublin City School District, all pursuant to and in accordance with Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 (collectively, the "Act"), and the City, by its Ordinance No. 09-04 passed March 1, 2004 (the "TIF Ordinance"), created the Tartan West Incentive District (the "District") and declared that 100% of the increase in assessed value of the Property subsequent to the effective date of the TIF Ordinance (including but not limited to any portion of that increase in assessed value resulting from Owners' construction of the Project and other improvements) is a public purpose and declared to be exempt from taxation for a period commencing with the first tax year that begins after the effective date of the TIF Ordinance and in which an Improvement (as defined in Ohio Revised Code Section 5709.40) 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 Act; and WHEREAS, in order to provide for the collection of such payments in lieu of taxes and to enable the Project to be carried out, the City and the Developer desire to enter into this Agreement on the terms as hereinafter provided; Now, THEREFORE, in consideration of the premises and covenants contained herein, and to induce the Developer to proceed with the Project and the City and the Developer to proceed with the construction of the Public Improvements, the City and the Developer hereto agree as follows: Section 1. Covenant to Make Payments in Lieu of Taxes. The Developer, for itself and any subsequent Owners of any of the Parcels, or any part thereof or interest therein, hereby agrees that the then current Owner of each Parcel shall make for that Parcel semiannual service payments in lieu of taxes with respect to the "Improvement" (as that term is used and defined in the Act) to that Parcel pursuant to and in accordance with the requirements of the Act, and pursuant to the TIF Ordinance and any subsequent amendments or supplements thereto. Any late payments shall be subject to penalty and bear interest at the then current rate established under Ohio Revised Code Sections 323.121(B)(1) and 5703.47, 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 payment of penalties and interest are collectively referred to herein with the payments in lieu of taxes as the ``Service Payments"). Such Service Payments shall be made semiannually to the County Treasurer of Union County, Ohio (or to the Treasurer's designated agent for collection of the Service Pa}nnents) on or before the date on which real property taxes would otherwise be due and payable for the Improvement. Each semiannual payment shall be in the same amount as the real property taxes that would have been charged and payable against the Improvement (after credit for any other available payments received by the City under Ohio Revised Code Section 319.302 as the same may be amended from time to time, or any successor provisions thereto as the same may be amended fi-oin time to time, herein the "Property Tax Rollback Payments") had an exemption from taxation not been granted, and otherwise shall be in accordance with the requirements of the Act. The Service Payments and Property Tax Rollback Payments shall be distributed in accordance with the TIF Ordinance. No Owner shall, under any circumstances, be required for any tax year to pay both real property taxes with respect to the Improvement and Service Payments with respect to the Improvement, whether pursuant to Ohio Revised Code Section 5709.42, the TIF Ordinance, this Agreement or any other applicable law. -2- It is intended and agreed, and it shall be so provided by the Developer in a declaration filed and of record in the office of the County Recorder of Union County, Ohio (the "Declaration"), and in any future deed from any Owner conveying a Parcel of the Property or any part thereof, that the covenants provided in this Section shall be covenants running with the land and that they shall, in any event and without regard to technical classification or designation, legal or otherwise, be binding to the fullest extent permitted by law and equity for the benefit and in favor of and enforceable by the City whether or not this Agreement remains in effect or whether or not such provision is included by an Owner in any succeeding deed to the Owner's successors and assigns in interest to that Parcel. It is further intended and agreed that these agreements and covenants shall remain in effect for the full period of exemption permitted in accordance with the requirements of the Act and the TIF Ordinance. Each Owner shall only be responsible for making Service Payments, which become due and payable in respect of that Owner's respective period of ownership. Such covenants running with the land in the Declaration shall have priority over any mortgage or other lien on the Property, and the Developer shall cause any and all holders of mortgages or other liens existing on the Property (if any) as of the time of recording of the Declaration, to subordinate such lien to the covenants running with the land provided in the Declaration. Section 2. Exemption Application. The Developer further agrees for itself and any Owners of the Parcels to assist and cooperate with the City in the preparation and filing by the City of all necessary applications and supporting documents to obtain the exemption from real property taxation for the Improvement authorized by the Act and the City, and to enable the City to collect Service Payments thereunder, and the Owners shall cooperate with the City in connection with the preparation and filing of the initial and any further applications required to accomplish that purpose. The Developer authorizes the City to file any application necessary to exempt the Improvement from taxation as provided in the TIF Ordinance. The Developer further agrees that the initial application may be filed by the City no later than December 31, 2004, unless the City determines that a later date is permissible. Section 3. Tax Increment Equivalent Fund. The City and the Owner acknowledge the creation, pursuant to the TIF Ordinance, of the [Tartan West] Project Municipal Public Improvement Tax Increment Equivalent Fund (the "Fund") to be maintained in the custody of the City. The City and the Owner agree that the Fund shall receive all Service Payments and Property Tax Rollback Payments payable to the City (after providing for certain payments to the Dublin City School District) in respect of the Property as described in Section 1, with all such Service Payments and Property Tax Rollback Payments deposited into the Fund being used to finance or pay the costs of the Public Improvements. Any incidental surplus remaining in the Fund shall be disposed of as provided in Section 5709.43(D) of the Revised Code. Section 4. Construction of Project. In consideration for the City's agreements herein, the Developer agrees to construct, or cause the construction of, the Project. Section 5. Construction of Public Improvements. The City and the Developer have agreed and identified on Exhibit C those Public Improvements to be constructed by the City (which -3- Public Improvements are identified on Exhibit C as the "Public Improvements -Category A") and those to be constructed by the Developer (which Public Improvements are identified on Exhibit C as the "Public Improvements -Category B" which refers to those Public Improvements the costs of which will be reimbursed to the Developer by the City upon completion of those Public Improvements and the "Public Improvements -Category C" which refers to those Public Improvements the costs of which will be reimbursed to the Developer by the City only after sufficient monies have been deposited into the Fund to reimburse the City for the costs of the Public Improvements - Category A and Public Improvements -Category B). The City and the Developer also agree to enter into an infrastructure agreement to provide generally for the construction of the Public Improvements to be constructed by the Developer. Section 6. Release. Upon satisfaction of the Owners' obligations under this Agreement and termination of the Owners' obligations to make the Service Payments, the City shall, upon the request an Owner, or its successors and assigns in interest to the Property, execute an instrument in recordable form evidencing such termination and releasing the covenants running with the land set forth in the Declaration. Section 7. Estoppel Certificate. Upon request of an Owner or any successor or assign in interest to any Parcel comprising the Property, the City shall execute and deliver to that Owner, any such successor and assign or any proposed purchaser, mortgagee or lessee of that Parcel, a certificate stating: (a) that the Agreement is in full force and effect, if the same is true; (b) that the Owner or that successor or assign is not in default under any of the terms, covenants or conditions of the Agreement, or, if the Owner or the successor or assign is in default, specifying same; and (c) such other matters as the Owner or the successor or assign reasonably requests. Section 8. Representations of Parties. The Developer hereby represents that it is the owner in fee simple of the Property and has full power and authority to enter into this Agreement and carry out its terms. The City hereby represents that the TIF Ordinance was passed by the City Cowlcil on , 2004. Section 9. Successors. This Agreement shall be binding upon the Owners, and their respective beneficiaries, successors and assigns, all as and to the extent provided for herein. Section 10. Information Reporting. The Developer, for itself and any Owners of the Parcels, agrees that it shall cooperate in all reasonable ways with and provide necessary and reasonable information to the designated Tax Incentive Review Council (the "TIRO") to enable the TIRC to review and determine annually during the term of this Agreement, the compliance of the Owners with the terms of this Agreement. Any information supplied by the Owners shall be provided solely for the purpose of monitoring its compliance with this Agreement. Section 11. Agreement Binding on Parties; No Personal Liability; City Consents. All covenants, obligations and agreements of the City and the Developer and Owners contained in this Agreement shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future member, officer, agent or employee of the City in other than their official capacity or of any individual person who is an officer, director or shareholder of any of the Owners other -4- than in their capacity as an officer, director or shareholder, and neither the members of the City Council nor any City official executing this Agreement, or any individual person executing this agreement on behalf of any of the Owners, shall be liable personally by reason of the covenants, obligations or agreements of the City or the Owners contained in this Agreement. Any consent of the City to be given under this Agreement may be given by the City Manager or other authorized representative, and shall be given in writing. Section 12. Amendments. This Agreement may only be amended by written instrument executed by all of the parties to this Agreement. Section 13. Notices. Except as otherwise specifically set forth in this Agreement, all notices, demands, requests, consents or approvals given, required or permitted to be given hereunder shall be in writing and shall be deemed sufficiently given if actually received or ifhand-delivered or sent by recognized, overnight delivery service or by certified mail, postage prepaid and return receipt requested, addressed to the other party at the address set forth in this Agreement or any addendum to or counterpart of this Agreement, or to such other address as the recipient shall have previously notified the sender of in writing, and shall be deemed received upon actual receipt, unless sent by certified mail, in which event such notice shall be deemed to have been received when the return receipt is sig~led or refused. The parties, by notice given hereunder; may designate any further or different addresses to which subsequent notices; certificates, requests or other communications shall be sent. The present addresses of the parties follow: (a) To Developer at: Tartan Development Company West, LLC 8070 Tartan Fields Drive Dublin, Ohio 43017 (b) To the City at: City of Dublin, Ohio 5800 Shier-Rings Road Dublin, Ohio 43016 Attention: Economic Development Director Section 14. Counterparts. This Agreement may be signed in one or more counterparts or duplicate signature pages with the same force and effect as if all required signatures were contained in a single original instrument. Any one or more of such counterparts or duplicate signature pages may be removed from any one or more original copies of this Agreement and annexed to other counterparts or duplicate signature pages to form a completely executed original instrument. (signature pages to follow) -5- IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be executed in their respective names by their duly authorized officers, as of the date hereinabove written. CITY OF DUBLIN, OH10 By: Printed: Jane Brauti Title: City Manager Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law Tartan Development Company West, LLC By: Printed: Title: -6- FISCAL OFFICER'S CERTIFICATE The undersigned, Director of Finance of the City under the foregoing Agreement, certifies hereby that the moneys required to meet the obligations of the City during the year 2004 under the foregoing Agreement have been appropriated lawfully for that purpose, and is in the Treasury of the City or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code. Dated: , 2004 Marsha I. Grigsby Deputy City Manager/Director of Finance -7- EXHIBIT A PROPERTY The following real estate situated in the City of Dublin, County of Union and State of Ohio, as bounded and described as follows: Tax Parcels No. 1360000112000, No. 1370000024000, No. 1370000017000, No. 1360000112001, No. 1370000036000, No. 137000001900 and No. 1370000037000 A-1 EXHIBIT B PROJECT A residential community designed around a 78,878-square foot recreation/wellness center. The project includes 61 new single-family lots, 160 cluster dwelling units, 186 condominium units, 75 residential units, a 13-acre pond and 100 acres of open space. B-1 EXHIBIT C PUBLIC IMPROVEMENTS Public Improvements -Category A Avery-Muirfield/Brand Road intersection improvements Hyland-Croy/Brand Road intersection improvements Avery Road/Brand Road intersection improvements Post/Hyland-Croy intersection improvements Glick/Avery/Manley roundabout Total Estimated Cost: $5,538,133 Public Improvements -Category B Water tower Booster station Hyland-Croy pedestrian tunnel Sewer line to the site Water line over sizing -along Hyland-Croy Sewer line over sizing -through site Public park development Bike paths Fees Total Estimated Cost: $4,365,745 Public Improvements -Category C Club Drive Other roadway improvements on Hyland-Croy Other roadway improvements on Manley Manley pedestrian tunnel Glick Road cul-de-sac/Roma Drive Water line along Hyland-Croy to serve only Tartan West Sewer line through site to serve only Tartan West Interest costs Fees Total Estimated Costs: $4,949,357 C-1 INFRASTRUCTURE AGREEMENT THIS INFRASTRUCTURE AGREEMENT (the "Agreement") dated March _, 2004, by and between the CITY OF DUBLIN, OHIO (the "City"), a municipal corporation duly organized and validly existing under the Constitution and laws of the State of Ohio (the "State") and its Charter, and "Tartan Development Company West, LLC" ("Tartan", and collectively with the City, the "Parties" and each individually a "Party"), an Ohio duly organized and validly existing under the laws of the State of Ohio, having its principal office in Dublin, Ohio. WITNESSETH: WHEREAS, Tartan owns certain parcels of real property in the northwestern sector of the City on which it plans to develop a high quality residential and commercial development; and WHEREAS, the Parties have determined that certain Public Infrastructure Improvements will need to be constructed to facilitate the development of the Project (such Public Infrastructure Improvements are more fully described on Exhibit A attached hereto and collectively referred to herein as the "Public Infrastructure Improvements"); and WHEREAS, in accordance with Sections 5709.40, 5709.42 and 5709.43 of the Ohio Revised Code and pursuant to Ordinance No. 09-04, passed by the City Council of the City on March 1, 2004 (the "TIF Ordinance"), the Parties have entered into a Tax Increment Financing Agreement, dated 2004 (the "TIF Agreement"), to provide generally for the development and financing of the Public Infrastructure Improvements; and WHEREAS, the TIF Agreement provides that Tartan is responsible for the construction of the Public Infrastructure Improvements, all as more particularly described herein and in the TIF Agreement; and WHEREAS, the City has determined pursuant to the TIF Ordinance that it would be in the best interest of the City to contract with Tartan to provide for the construction and installation of the Public Infrastructure Improvements described herein; Now THEREFORE, the Parties covenant, agree and obligate themselves as follows: ARTICLE I DEFINITIONS Section l.l. Definitions. Unless otherwise defined herein, words and terms used in this Agreement with initial capital letters shall have the meanings set forth in this Section 1.1. "Agreement" means this Infrastructure Agreement dated March _, 2004, by and between the City and Tartan, as duly amended or supplemented from time to time in accordance with its terms. "Agreement Term" means the period commencing with the delivery of this Agreement and ending on the Termination Date. "Authorized City Representative" means initially the City Manager of the City. The City may from time to time provide a written certificate to Tartan signed on behalf of the City by the City Manager designating an alternate or alternates who shall have the same authority, duties and powers as the initial Authorized City Representative. "Authorized Tartan Representative" means initially President. Tartan may from time to time provide a written certificate to the City signed on behalf of Tartan by any authorized Tartan official designating an alternate or alternates who shall have the same authority, duties and powers as the initial Authorized Tartan Representative. "Budget" means the budget for the Cost of Work as described in Exhibit E. "City" means the City of Dublin, Ohio. "City Constructed Public Infrastructure Improvements" means any real and/or personal property identified generally on Exhibit C of the TIF Agreement and referred to thereon as the Public Improvements - Category A and generally referring to those Public Infrastructure Improvements which will be constructed and paid for by the City. "City Documents" means this Agreement, the TIF Agreement dated March _, 2004 and the TIF Ordinance. "Completion Date" means the date specified in a certificate given pursuant to Section 2.3 of this Agreement. ``Construction Documents" means the detailed construction documents for the Public Infrastructure Improvements including, without limitation, working drawings, plans and specifications for the Public Infrastructure Improvements dated ~, 2004] and on file with and approved by the Authorized City Representative on behalf of the City, as the same may be revised or supplemented from time to time with the approval of the Authorized City Representative. "Cost of World' means the total consideration paid or to be paid for the construction or installation of the Public Infrastructure Improvements pursuant to Article II, all in accordance with the Budget. "Event of Default" means an Event of Default under Section 6.1 of this Agreement. "Force Majeure" means acts of God; fires; epidemics; landslides; floods; strikes; lockouts or other industrial disturbances; acts of public enemies; acts or orders of any kind of any governmental authority; insurrections; riots; civil disturbances; arrests; explosions; breakage or malfunctions of or accidents to machinery, transmission pipes or canals; partial or entire failures of utilities; shortages of labor, materials, supplies or transportation; lightning, earthquakes, humcanes, tornadoes, stomas -2- or droughts; periods of unusually inclement weather or excessive precipitation; or any cause or event not reasonably within the control of Tartan or the City, as the case maybe. "Notice Address" means: (a) As to the City: City of Dublin, Ohio 5800 Shier-Rings Road Dublin, Ohio 43016-7295 Attention: Director of Economic Development (b) As to Tartan: Tartan Development Company West, LLC 8070 Tartan Fields Drive Dublin, Ohio 43017 Attention: or a different address as to which notice is given pursuant to Section 7.1 of this Agreement. "Person" shall mean an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a joint venture, a trust, an unincorporated organization, or a government or any agency or political subdivision thereof. "Public Infrastructure Improvements" means collectively, the Public Infrastructure Improvements - Category B and Public Infrastructure Improvements -Category C. "Public Lzfi~astructure Improvements -Category B" means any real and/or personal property identified generally on Exhibit A hereto and referred to thereon as the Public Improvements - Category B and generally referring to those Public Infrastructure Improvements which will be constructed by Tartan and the Cost of Work of which will be reimbursed to Tartan by the City upon completion of those Public Infrastructure Improvements, all as more fully described herein. "Public Infrastructure Improvements -Category C" means any real and/or personal property identified generally on Exhibit A hereto and referred to thereon as the Public hmprovements - Category C and generally referring to those Public Infrastructure Improvements which will be constructed by Tartan and the Cost of Work of which will be reimbursed to Tartan by the City only after the City has received sufficient monies in the TIF Fund to reimburse the City for the Cost of Work of the City Constructed Public Infrastructure Improvements and the Public Infi-astructure Improvements -Category B, all as more fully described herein. "Public Infrastructure Improvements Site" means the real estate described in Exhibit B of this Agreement. -3- "Service Payments "shall have the same meaning as set forth in the TIF Ordinance. "State" means the State of Ohio, one of the United States of America. "Tartan " means Tartan West, an Ohio existing under the Constitution and laws of the Columbus, Ohio. duly organized and validly State of Ohio, having its principal office in "Termination Date" means the later of (a) the date which is one (1) year after the latest Completion Date for any portion of the Work or (b) the earlier of (i) the date on which the City has reimbursed Tartan for all Costs of Work, including interest on those Costs or (ii) the City has received its final distribution from the service payments in lieu of taxes relating to the real property tax exemptions as provided in the TIF Ordinance. "TIF Fund" means the Tartan West Project Municipal Public Improvement Tax Increment Equivalent Fund created pursuant to the TIF' Ordinance. `TIF Ordinance "means Ordinance No. 09-04 passed by the Council of the City on March 1, 2004. "World' means the construction of the Public Infrastructure Improvements in accordance with Articles 2 and 3 of this Agreement. Section 1.2. Certain Words Used Herein; References. Any reference herein to the City, any members or officers thereof, or other public boards, commissions, departments, institutions, agencies, bodies or other entities, or members or officers thereof, includes without limitation, entities or officials succeeding to their respective functions, duties or responsibilities pursuant to or by operation of law or performing their functions lawfully. Any reference to a section or provision of the Constitution of the State, the Act, a section, provision or chapter of the Ohio Revised Code, federal or State laws includes without limitation, that section, provision or chapter, or those laws or regulations, as amended, modified, revised, supplemented or superseded from time to time. Words of any gender include the correlative words of any other gender. Unless the context indicates otherwise, words importing the singular number include the plural number, and vice versa. The terms "hereof," "herein," "hereby," "hereto" and "hereunder", and similar terms, refer to this Agreement; and the term "hereafter" means after, and the term "heretofore" means before the date of delivery of this Agreement. -4- ARTICLE II CONSTRUCTION OF THE PUBLIC INFRASTRUCTURE IMPROVEMENTS Section 2.1. General Considerations. In consideration of Tartan's promise to cause to be developed the Public Infrastructure Improvements, the City agrees to reimburse Tartan for the Cost of Work in accordance with this Agreement. ~' Section 2.2. Construction of the Public Infrastructure Improvements. Tartan covenants and agrees that it will contract for the construction of the Public Infrastructure Improvements in Tartan's name with a contractor or contractors. Tartan covenants and agrees: (a) to make, execute, acknowledge and deliver any contracts, orders, receipts, writings and instructions hereafter delivered, and do all other things which may be necessary or advisable for the construction, improvement and equipping of the Public Infrastructure Improvements, all in conformity with all then applicable governmental laws, rules and regulations; (b) pursuant to the provisions of this Agreement, to provide for the payment of all fees, costs and expenses incurred in the construction, improvement and equipping of the Public Infrastructure Improvements from funds made available therefor in accordance with this Agreement, by the City or otherwise; and (c) to the extent commercially reasonable, to ask for, demand, sue for, levy upon, recover and receive all sums of money, indebtedness and other demands whatsoever which may be due, owing or payable to Tartan under the terms of each contract, agreement, obligation, bond, performance security, order and receipt in connection with the construction, improvement and equipping of the Public Infrastructure Improvements and to enforce the provisions of each contract, agreement, obligation, bond, performance security, order and receipt in connection therewith. Section 2.3. Completion Date and Certifications. The Parties agree to cooperate hereunder in order that the Public Infrastructure Improvements maybe substantially complete on or before , 200_. The Parties further agree that the Work may be completed in several phases as mutually agreed upon in writing by the Authorized City Representative and the Authorized Tartan Representative. Finally, the Parties agree that such completion date may be extended by mutual written agreement of the Authorized City Representative and the Authorized Tartan Representative. The Completion Date of each phase of the Work shall be specified to the City in a certificate signed by the Authorized Tartan Representative, which certificate (a) shall describe all property acquired or installed as part of that completed phase of the Work from the monies deposited in the TIF Fund, (b) shall state the Cost of Work allocable to that completed phase, and (c) shall state that: -5- (i) the construction, improvement and equipping of that phase of the Work have been completed substantially in accordance with the related Construction Documents, all costs then due and payable in connection therewith have been paid, and all obligations, costs and expenses in connection with that phase of the Work and payable out of the TIF Fund or otherwise have been paid or discharged except for any amounts retained in the TIF Fund as provided below; (ii) all other facilities necessary in connection with that phase of the Work have been constructed, improved and equipped; and (iii) the construction, improvement and equipping of that phase of the Work have been accomplished in a manner which conforms to all then applicable governmental laws, rules and regulations. The certificate also shall specify (d) the date by which the foregoing events shall have occurred, (e) which costs and expenses, if any, are not yet due, or are being contested by Tartan, and (f) what amounts should be retained for any other reasons. In reliance thereon, the City may retain in the TIF Fund an amount equal to the aggregate of those costs and expenses. Notwithstanding the foregoing, the certificate shall state that it is given without prejudice to any rights against third parties which then exist or which may come into being subsequently. Section 2.4. Acceptance of Public Infrastructure Improvements. Acceptance by the City of the Public Infrastructure Improvements in one or more phases shall not relieve Tartan of its responsibility for defects in material or workmanship as set forth in Section 5.5. ARTICLE III FURTHER PROVISIONS RELATING TO THE CONSTRUCTION OF THE PUBLIC INFRASTRUCTURE IMPROVEMENTS Section 3.1. Construction Documents. Tartan covenants and agrees that the construction, improvement and equipping of the Public Infrastructure Improvements will be accomplished in accordance with the Construction Documents as approved by the Authorized City Representative, as those Construction Documents maybe revised or supplemented from time to time, provided such revisions or supplements are approved by the Authorized City Representative. Section 3.2. Prevailing Wage. The Parties acknowledge and agree that the Public Infrastructure Improvements are subject to the prevailing wage requirements of Ohio Revised Code Chapter 4115 and all wages paid to laborers and mechanics employed on the Public Infrastructure Improvements shall be paid at not less than the prevailing rates of wages of laborers and mechanics for the classes of work called for by the Public Infrastructure Improvements, which wages shall be determined in accordance with the requirements of that Chapter 4115. The Parties shall comply, and Tartan shall require compliance by all contractors and shall require all contractors to require compliance by all subcontractors working on the Public Infrastructure Improvements, with all applicable requirements of that Chapter 4115. Tartan agrees that upon written request of the City, Tartan shall promptly provide to the City written evidence that Tartan and all subcontractors -6- working on the Public Infrastructure Improvements have complied in all respects with this Section 3.2. Section 3.3. Awarding of Contracts. The Parties agree that the Plans and Specifications for the Public Infrastructure Improvements have been or will be prepared by the City or Tartan, as the case may be, and that Work on the Public Infrastructure Improvements will not commence until the Parties have mutually agreed upon such Plans and Specifications. The Parties agree that Tartan may request and receive bids on the Public Infrastructure Improvements in one or more packages, the number and form of which shall be subject to the reasonable approval of the Authorized City Representative. Tartan agrees that with respect to each bid package, Tartan shall request and receive no less than three (3) responsible bids, except as may otherwise be approved in writing by the Authorized City Representative. Tartan shall award the contract for each bid package subject to the reasonable approval of the Authorized City Representative. Section 3.4. Traffic Control Requirements. Tartan shall be responsible for ensuring the provision, through contractors or otherwise, of all traffic control devices, flaggers and police officers required to properly and safely maintain traffic. All traffic control devices shall be furnished, erected, maintained and removed in accordance with the "Ohio Manual of Traffic Control Devices for Construction and Maintenance Operation." Section 3.5. Security for Performance. Tartan shall furnish or require all contractors performing Work to furnish prior to commencement of construction of that Work, one of the following types of project guarantees: (a) Contract Bonds. A surety bond which shall name Tartan and the City as obligee in the form provided by Section 153.57 of the Ohio Revised Code. The performance and materialman's bond shall cover all Costs of Work, including a guarantee period of one (1) year set forth in Section 5.5 hereof. (b) Irrevocable Letter of Credit. A letter of credit naming Tartan and the City as obligee in the form provided by 153.57 of the Ohio Revised Code. The letter of credit shall be subject to the Uniform Customs and Practices for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500. The letter of credit shall cover all Costs of Work, including a guarantee period ofone (1) year set forth in Section 5.5 hereof. Any bond shall be executed by sureties that are licensed to conduct business in the State and are named in the current list of "companies Holding Certificates of Authority as Acceptable Securities on Federal Bonds and as Acceptable Insurance Companies" as published in Circular 570 (amended) by the Audit Staff Bureau of Accounts, U.S. Treasury Department or as may be otherwise approved in writing by the Authorized City Representative. All bonds signed by an agent must be accompanied by a certified copy of the authority to act. If the surety of any bond so furnished by a contractor declares bankruptcy, become insolvent or its right to do business is terminated in the State, Tartan shall within five (5) days thereafter cause the contractor to substitute another bond and surety, both of which shall be acceptable to the City and Tartan. Tartan shall provide to the City prior to commencement of any Work by each contractor a copy of the Contract Documents relating -7- to the Work to be performed by that contractor and the security for performance provided by the contractor pursuant to this Section. Section 3.6. Public Use. Tartan agrees that, upon satisfactory completion of the Public Infrastructure Improvements in accordance with this Agreement, such Public Infrastructure Improvements shall be dedicated to the City for public use. Section 3.7. Equal Opportunity Clause. Tartan will, in all solicitations or advertisements for employees placed by or on behalf of Tartan, state that Tartan is an equal opportunity employer. Tartan shall require all contractors and shall require all contractors to require all subcontractors to include in each contract a summary of this equal opportunity clause. Section 3.8. Insurance Requirements. Tartan shall require all contractors and shall require all contractors to require all subcontractors to take out or cause to be taken out and maintained until such time as that contractor or subcontractor has completed its portion of the Work, such insurance as is required by the Construction Documents, which insurance shall protect the Parties and any contractor or subcontractor performing Work covered by this Agreement from the types of claims for damages as set forth in the Construction Documents. Such insurance policy or policies shall include the Parties as additional named insureds. Such insurance policies shall further provide that any attorney fees accruing or payable with respect to a claim under such policy shall be paid by the insurer and shall not count against the coverage limits of such policy. Prior to commencement of any portion of the Work by any contractor or subcontractor, such contractor or subcontractor, as the case may be, shall provide to the Parties an original certificate of insurance as proof of such insurance coverage. Such insurance shall remain in full force and effect during the Agreement Term. Insurance may not be changed or canceled unless all insureds, including the Parties, are notified in writing not less than thirty days prior to such change or cancellation. Section 3.9. City Income Tax Withholdings. Tartan shall withhold and pay, shall require all contractors to witl~l~old and pay, and shall require all contractors to require all subcontractors to withhold and pay, all City Income Taxes due or payable with respect to wages, salaries, commissions and any other income subject to the provisions of Chapter 35, Dublin City Codes. Section 3.10. Compliance with Occupational Health and Safety Act of 1970. Tartan and all contractors and subcontractors shall be solely responsible for their respective compliance with the Occupational Safety and Health Act of 1970 under this Agreement. Section 3.11. Provision of Security for Mechanic's Liens. To the extent any materialman, contractor, or subcontractor files and records a mechanic's lien against the Public Infrastructure Improvements, Tartan shall, or shall require the appropriate contractor to, provide any security required by Ohio Revised Code Section 1311.11 to cause that mechanic's lien to be released of record with respect to the Public Infrastructure Improvements. -8- ARTICLE IV PAYMENT OF COSTS Section 4.1. Deposit of Monies in the TIF Fund. Upon the execution of this Agreement, the City covenants and agrees to deposit monies into the TIF Fund in an amount equal to the estimated Cost of Work for the Public Infrastructure Improvements -Category B, and thereafter, to deposit into the TIF Fund all monies required to be deposited therein pursuant to the TIF Ordinance. Section 4.2. Disbursements from the TIF Fund. (a) General. The City agrees to pay the Cost of Work in accordance with the Construction Documents, including any retainage as provided for therein, based on Written Requisitions executed by the Authorized Tartan Representative substantially in the form attached hereto as Exhibit C. The Authorized City Representative, with the concurrence of the Director of Law, may agree to vary the lien waiver requirements in paragraph (vii) of attached Exhibit C. All disbursements requested pursuant to this section shall be subject to the prior approval of the City Engineer and the Director of Finance. All disbursements pursuant to this Section shall be made solely from the monies on deposit in the TIF Fund. Pursuant to the TIF Ordinance, the City has established the TIF' Fund for the payment of the Cost of Work. The monies on deposit in the TIF Fund shall be disbursed from time to time to make payments to persons designated by Tartan (including Tartan) in respect of portions of the Cost of Work, upon receipt by the City of a written requisition executed by the Authorized Tartan Representative substantially in the form attached hereto as Exhibit C. Upon request of the Authorized City Representative, Tartan shall furnish invoices or other documentation in connection with each such Written Requisition. Any Written Requisition under this Section 4.2 may be in the form of a communication by telegram, telex, or facsimile transmission, but if in such form, it shall be promptly confirmed by a Written Requisition executed by an Authorized Tartan Representative and approved by the Authorized City Representative. In paying any Written Requisition under this Section 4.2, the City shall be entitled to rely as to the completeness and accuracy of all statements in such Written Requisition upon the approval of such Written Requisition by an Authorized Tartan Representative, execution thereof, and communication thereof by telegram, telex, or facsimile transmission, to be conclusive evidence of such approval, and Tartan shall indemnify and save harmless the City from any liability incurred in connection with any Written Requisition so executed or communicated by an Authorized Tartan Representative. Tartan shall not submit or cause to be submitted to the City any Written Requisition pursuant to this Section 4.2 and shall have no claim upon any monies in the TIF Fund, so long as there shall have occurred and be continuing any Event of Default. The obligation of the City to make payments to Tartan pursuant to this Agreement is not an obligation or pledge of any moneys raised by taxation and does not represent or constitute a debt or pledge of the faith and credit of the City. Except for the payments -9- from the TIF Fund and in the aggregate amount described in this Agreement, Tartan shall receive no other monies from the City in connection with the construction of the Public Infrastructure Improvements. (b) Public Infrastructure Improvements -Category B. In connection with the submittal of a Written Requisition for the Cost of Work related to Public Infrastructure Improvements - Category B Work, the City shall remit payment in accordance with that Written Requisition submitted in compliance with this Agreement within twenty-one (21) days following receipt of such Written Requisition. (c) Public Infrastructure Improvements -Category C. In connection with the submittal of a Written Requisition for the Cost of Work related to Public Infrastructure Improvements - Category C Work, the Parties agree that the City shall only be obligated to reimburse Tartan for the Cost of Work related to Public Infrastructure Improvement - Category C Work after the City has been reimbursed from monies deposited in the TIF Fund for the Cost of Work related to the City Constructed Public Infrastructure Improvements and the Public hnfrastructure Improvements -Category B. Tartan agrees to submit all Written Requisitions related to the Cost of Work related to Public Infrastructure Improvements - Category C Work no later than 180 days following the last Completion Date of the Public Infrastructure hmprovements - Category C Work. The City agrees that commencing on the first December 1 following (i) the date on which the City has been fully reimbursed for the Cost of Work related to the City Constructed Public Infrastructure Improvements and the Public Infrastructure Improvements - Category B Work, (ii) the date that Tartan has completed construction of the Public Infrastructure Improvements -Category C, (iii) the dedication to and acceptance by the City of the Public Infrastructure Improvements - Category C, and (iv) delivery to the City of a written certification of the actual cost of construction of those Public Infrastructure Improvements - Category C with supporting documentation, and on each December 1 thereafter or such earlier date as may be determined by the City, the City will pay to Tartan any monies on deposit in the TIF Fund until such time that Tartan has been fully reimbursed for the Cost of Work (including interest as described below) related to the Public Infrastructure Improvements - Category C. Each payment made by the City pursuant to this Section 4.2 shall also include interest on the unreimbursed portion of the Cost of Work related to the Public Infrastructure Improvements - Category C and such interest shall be calculated at the rate of three and seventy-three one-hundredths percent (3.73%) per annum. Interest on the unreimbursed portion of the Cost of Work related to the Public Infrastructure Improvements - Category C shall accrue during a period commencing on the first date that Service Payments are deposited into the TIF Fund and concluding on the first date that the City remits a reimbursement payment to the City in respect of the Cost of Work related to the Public Infrastructure Improvements -Category C. In no event shall the aggregate payments made by the City from the monies deposited in the TIF Fund to reimburse Tartan (or a related entity of Tartan) for the Cost of Work related to the Public Infrastructure Improvements - Category C exceed (excluding the interest paid pursuant to this Section 4.2(c)) the Cost of Work related to the Public Infrastructure Improvements - Category C. The payments described in this Section 4.2(c) shall be made solely from and to the extent monies are available in the TIF Fund. -10- Section 4.3. Tartan Required to Pay Costs of Work Related to Public Infrastructure Improvements - Category C if Amounts in TIF Fund Insufficient. The City does not make any representation or warranty, either express or implied, that the monies which will be deposited into the TIF Fund in accordance with the TIF Ordinance, and which under the provisions of this Agreement will be available for payment of the Cost of Work related to the Public Infrastructure Improvements - Category C to be accomplished pursuant hereto, will be sufficient to pay all of the Cost of Work thereof. Tartan covenants and agrees that if Tartan has not been reimbursed in full for the Cost of Work of the Public Infrastructure Improvements - Category C after the expiration of the real property tax exemptions provided for in the TIF Ordinance and the exhaustion of the monies on deposit in the TIF Fund, Tartan will not be entitled to any further reimbursement therefor from the City and the City shall have no obligation to reimburse Tartan for that unreimbursed Cost of Work from any other City monies. ARTICLE V CERTAIN REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS Section 5.1. Certain Representations, Warranties, Covenants and Agreements of City. The City represents and warrants as of the date of delivery of this Agreement that: (a) It is a municipal corporation and political subdivision duly organized and validly existing under the Constitution and laws of the State. (b) It will have duly accomplished all conditions necessary to be accomplished by it prior to the execution and delivery of the City Documents and to constitute such City Documents as valid and binding instruments enforceable in accordance with their respective terms. (c) It is not in violation of or in conflict with any provision of the laws of the State which would impair its ability to observe and perform its covenants, agreements and obligations under the City Documents. (d) It has and will have full power and authority (i) to execute, deliver, observe and perforni the City Documents and all other instruments and documents executed and delivered by the City in connection therewith and (ii) to enter into, observe and perform the transactions contemplated in the City Documents and those other instruments and documents. (e) It has or will have duly authorized the execution, delivery, observance and performance of the City Documents. -11- (f) The TIF Ordinance and the TIF Agreement are each valid and binding, have not been amended, modified or rescinded, and are in full force and effect. Section 5.2. Certain Representations, Warranties, Covenants and Agreements of Tartan. Tartan represents and warrants as of the date of delivery of this Agreement that: (a) Tartan (i) is an Ohio duly organized, validly existing and in good standing under the laws of the State and (ii) has all requisite power and authority and all necessary licenses and permits to own and operate its properties and to carry on its business as now being conducted and as presently proposed to be conducted. (b) There are no actions, suits, proceedings, inquiries or investigations pending, or to the knowledge of Tartan threatened, against or affecting Tartan in any court or before any governmental authority or arbitration board or tribunal which involve the possibility of materially and adversely affecting the transactions contemplated by this Agreement or the ability of Tartan to perform its obligations under this Agreement. (c) The execution and delivery by Tartan of this Agreement and the compliance by Tartan with all of the provisions hereof (i) are within the authority and powers of Tartan, (ii) will not conflict with or result in any breach of any of the provisions of, or constitute a default under, any agreement, articles of organization, operating agreement or other instrument to which Tartan is a party or by which it maybe bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over Tartan or any of its activities or properties, and (iii) have been duly authorized by all necessary action on the part of Tartan. (d) No event has occurred and no condition exists with respect to Tartan that would constitute a default under this Agreement or which, with the lapse of time or with the giving of notice or both, would become an Event of Default under this Agreement. Section 5.3. Tartan to Maintain Legal Existence. Tartan covenants and agrees that it will maintain its legal existence so long as Tartan remains liable under this Agreement. Section 5.4. Indemnification. Tartan shall indemnify, defend and hold harmless the City, its agents, and employees from and against any and all suits or claims for damages or losses arising or allegedly arising out of, or resulting from performance of the Work by Tartan, its contractors, subcontractors, agents, employees or representatives. Tartan shall require that all contractor agreements, and shall require all contractors to require that all subcontractors agreements, include indemnification language as found above. Tartan shall promptly reimburse the City and its successors and assigns, for any cost, expense or attorney's fees incurred on account of any such suit or claim incurred in enforcing the terms of this Agreement. This indemnification provision is agreed by Tartan to expressly waive Tartan's immunity, if any, as a complying employer under Section 35, Article II of the Ohio Constitution and Worker's Compensation laws of the Ohio Revised Code from indemnifying and holding the City harmless from claims by employees, agents or contractors of Tartan. This indemnity does not cover (a) any injuries or damages occurring after -12- the completion of construction of the Work by Tartan, or (b) any injuries or damages arising out of the actions or inactions of the City or its agents or employees. Section 5.5. Further Tartan Guaranties Relating to the Public Infrastructure Improvements. Tartan warrants that it will cause to be exercised in the performance of the Work the standard of care normally exercised by nationally recognized engineering and construction organizations engaged in performing comparable services. Tartan further warrants that each phase of the Work shall be free from defects in materials and workmanship (without regard to the standard of care exercised in its performance) for a period of one (1) year after final written acceptance of that phase of the Work. Tartan shall at its own expense: (a) Correct or re-execute, or cause to be corrected or re-executed, any of the Work that fails to conform with the requirements of the Construction Documents and appears during the prosecution of the Work; (b) Correct, or cause to be corrected, any defects in materials and workmanship of the Work (without regard to the standard of care exercised in its performance) which appear within a period of one (1) year after final written acceptance of that Work or within such longer period of dine as maybe set forth in the Construction Documents; and (c) Replace, repair, or restore, or cause replacement, repair or restoration of, any parts of the Work or any of the fixtures, equipment, or other items placed therein that are injured or damaged as a consequence of any such failure or defect, or as a consequence of corrective action taken pursuant hereto. Should Tartan fail to make, or cause to be made, corrections required by this Section, then the City may do so at the expense and for Tartan. Section 5.6. Tartan Representations as to Personal Property Taxes. Tartan represents that at the time of the execution of this Agreement, Tartan was not charged with any delinquent personal property taxes on the general tax list of personal property of Union County, Ohio. Further, Tartan shall require all contractors to execute an affidavit in the form attached as Exhibit D, a copy of which certificate shall be delivered to the Authorized City Representative prior to the commencement of any work by that contractor or subcontractor. ARTICLE VI EVENTS OF DEFAULT AND REMEDIES Section 6.1. Events of Default and Remedies. (a) Except as otherwise provided in this Agreement, in the event of any default in or breach of this Agreement, or any of its terms or conditions, by either Party hereto, or any successor to such Party, such Party or successor shall, upon written notice from the other, proceed promptly to cure or remedy such default or breach. in case such remedial action is not taken or not diligently pursued within thirty (30) days of such written notice, the Party asserting default or breach may institute such proceedings at law or in equity, or in the case of a claim against the City, an action in mandamus, as may be necessary or desirable in its opinion to remedy such default or breach. -13- Division of Economic Development 5800 Shier Rings Road, Dublin, Ohio 43016-1236 CITY OF DUBLIN phone: 614.410.4600, Fax: 614.761.6506 To: Members of Dublin City Council From: Jane S. Brautigam, City Manager Date: January 23, 2004 Initiated By: Marsha I. Grigsby, Deputy City Manager/Director of Finance Michael H. Stevens, Director of Economic Development Colleen M. Gilger, Economic Development Specialist Re: Benefits Associated with the Proposed Tartan West TIF ~~ Memo Background As City Council is aware (see previous memos attached), the creation of a Tax Increment Financing (TIF) District is being proposed for the area north of Brand Road, directly east of Hyland Croy Road. The proposed TIF District will partially fund necessary infrastructure improvements for the Tartan West proposed development. Summary Similar to City Council members, staff had concerns about establishing a residential TIF but since has determined that this proposed TIF could be a major financial benefit to the entire community. This memo is meant to answer the question of why it is to the City's benefit to establish a TIF district for the Tartan West development. As is true in other TIF development projects, the developer of the project, Tartan West, indeed will realize financial benefits, but more importantly the City has a tremendous amount to gain as well by going forward with the creation of a TIF district. This TIF will provide a new funding source for existing infrastructure needs that have been programmed in the City's CIP. In addition to the direct financial benefits, Tartan West will be a high quality development that sets a new standard for the area. As with the other TIF districts throughout Dublin, this TIF will benefit the property included in the TIF district as well as the general public. Financial Benefits The total improvement costs that will be identified in the Description of the Public Infrastructure are estimated to be approximately $14.8 million. The offsite improvements that provide a significant benefit to the general public will be paid by the City and be reimbursed through the TIF. These improvements total over $9.6 million (of which more than $5 million already is programmed in the current CIP for some of these specific improvements). After the City is reimbursed through the TIF, Tartan West will be reimbursed approximately $4.8 million for onsite improvements that provide some benefit to the general public. The City would be reimbursed for several already programmed projects thus creating a future revenue stream of more than $5 million that can be utilized to complete other needed improvements that have been identified but not programmed due to funding limitations. The City will complete these already programmed projects (in the 2004 and 2005 CIP) and be reimbursed over time through service payments. The reimbursement via service payments will "free up" currently programmed income tax and/or water user fees for other projects. Identified CIP projects funded by a potential TIF include intersection improvements to Avery-Mui~eld/Brand Road, Hyland CroyBrand Road, Avery Road/Brand Road, Post Road/Hyland Croy, and the Glick/Avery/Manley roundabout. These offsite improvements provide a benefit to the Tartan West development; however, the general public will receive a more significant benefit. Water system improvements totaling nearly $1.5 million currently are programmed for initiation in 2004. The reimbursement of these improvements through TIF service payments can provide a funding source to be applied to programming other water system improvements, such as extending water lines to areas that currently do not have access to the public system. The developer will provide the site for the water tower that is needed to serve the Tartan West development and future development in the area; therefore the City does not need to acquire new property. Through this TIF project, the City receives the ability to identify the developer contribution for the construction of anew water tower and booster station for the underserved northwest area. There is no precedent or previous requirements from the City to any developer in such a manner. The City previously funded the rest of the City's water towers and booster stations at 100 percent through income taxes (pre-1992) and revenue from the Water Fund. Construction of the water tower and booster station dramatically will improve the declining water pressure in the northwest, specifically the Mui~eld area, which has a history of lower than normal water pressure. A l2-inch water line along Club Drive and a 16-inch line along Hyland Croy, McKitrick and Manley will connect into Muirfield-43 and provide the preferred loop system for water delivery. The type of housing planned in Tartan West results provides much less of an impact on the Dublin City Schools. The empty nester units produce a fourth of school-aged children compared to a typical single-family development in Dublin. Tartan West would be a large net positive for the schools by generating an estimated $3.5 million in excess of what it would cost to educate the children from this development. The public parkland, approximately 71 acres that will be dedicated as part of this development, will be maintained privately. This will result in a savings to the City of approximately $90,000 per year. One of staff's budget concerns has been the growing cost to maintain public parkland. This development will provide additional parkland without the additional operating costs. Other The Tartan West development represents a major land assemblage, which would provides the City with a more cohesive development totaling over 251 acres. In the updated Future Land Use Map this area is identified as "residential -medium density" (1 to 2 units per acre). The Tartan West plan shows a density of 1.83 units per acre; 43 units were eliminated during the rezoning process. The development provides a variety of housing choices largely geared at the empty nester, and meets the "clustering" component largely encouraged in the Community Plan. This will generate fewer vehicle trips on an average weekday than a standard single-family development. These daily trips generated are significantly less than trips assigned by the Community Plan for this area. Residential development has been an important driver of the City's economic development success. The public infrastructure improvements will allow for new economic development in the northwest region, improve access to the Jerome High School site and provide the desired housing for the employees of our businesses and the growing empty nester population. The proposed TIF District is located in a fast growing residential area with original infrastructure that was built to handle rural land uses. The approved PUD allows for housing that targets the "empty-nester" market. This market is currently underserved in the Dublin community but is an important economic development component as the City's population has become less transient and more mature. The establishment of a TIF district for this residential development will not obligate the City to establish future TIFs for residential development. This area has significant existing infrastructure needs that can be funded via this TIF and this development has unique elements that do not exist in most residential development, the most significant being its size. It is possible that other residential developers will inquire about utilizing a TIF; however, similar to how the City has structured its economic development incentives, each development would be reviewed and evaluated based on its own merits. Currently it is estimated that the total value of the housing to be constructed in the development will be $240 million or an average of $546,000 per unit. The units will range from estimated cost of $360,000 to $800,000 per unit. The development will also include awellness/fitness center that is estimated to cost in excess of $19 million to construct. Significant on-site infrastructure cost will be obtained and included in future information. The Draft TIF Agreement and Infrastructure Agreement relating to primary and secondary improvements were received on Thursday, January 22, and staff has not had the chance to review them as of yet. Staff will keep City Council updated as work progresses. Staff also will be providing information to address concerns raised regarding the potential impact to other governmental entities as a result of the TIF. Recommendation: For information only. f,ITY OF DLBLIIV Deputy City Manager/Director of Finance 5200 Emerald Parkway • Dublin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 R ~ ~ ~ • , ~. ~ _. ~ ~~ Memo To: Jane A. Brautigam, City Manager From: Marsha I. Grigsby, Director of Finance Date: October 8, 2003 Re: Infrastructure Improvements Related to the Proposed Tartan West Development As we have briefly discussed, Mike and I have met with representatives of Tartan Development Company West, LLC to discuss infrastructure needs related to the proposed Tartan West development. Some of the improvements identified in the proposed Tartan West site impact analysis are improvements that have previously been identified as needed improvements in the City's Capital Improvements Program (i.e. Hyland Croy/Brand Road intersection improvements and Muirfield Drive/Brand Road intersection improvements). We have discussed the possibility of establishing a tax increment financing (TIF) district to provide a revenue source for the various improvements that have been identified. In the past we have utilized TIFs for commercial developments only. Prior to December 2001 a TIF could only be used for residential development if it was fora "blighted area" or an "impacted city". In December 2001, Section 5709.40 of the Ohio Revised Code was amended to provide for the establishment of an "incentive district'' if the area is not more than 300 acres, has a continuous boundary and meets one of several characteristics. One of the characteristics is: "As certified by the engineer for the political subdivision, the public infrastructure serving the district is inadequate to meet the development needs of the district as evidenced by a written economic development plan or urban renewal plan for the district that has been adopted by the legislative authority of the subdivision". Mike and I have met with Squire, Sanders and Dempsey, the City's bond counsel, to discuss what needs to be included in an economic development plan for this purpose. We anticipate receiving an example of a plan that has been prepared for this type of incentive district in the near future. In talking with our bond counsel, the use of a TIF for the proposed Tartan West development appears to be feasible. Once we review the example of an economic development plan, we will be better able to make a determination on the feasibility of establishing an incentive district. At that time, we will provide information to City Council for their review. We have had preliminary discussions with the representatives of Tartan Development Company West with regard to the infrastructure improvements that might possibly be able to be funded by a TIF. As you know, the city has many infrastructure needs. The use of a TIF to provide a revenue source to fund infrastructure improvements needed in the area of the proposed Tartan West development is an option that I feel needs to be reviewed and evaluated by staff. We are in the preliminary review phase and will keep you updated as we continue our review. c: Frank Ciarochi, Director of Development Mike Stevens, Director of Economic Development f,ITI' OF DLBLIN Deputy City Manager/Director of Finance 5200 Emerald Parkway • Dublin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 To: Jane S. Brautigam, City Manager From: Marsha I. Grigsby, Deputy City Manager/Director of Finance Date: October 24, 2003 Re: Proposed Tartan West Development { ~ .,. ~~ ~_. i t r ,~~ ~ Memo As you are aware, Mike Stevens and I have met with representatives from Tartan Development Company West, LLC to discuss the possibility of establishing a tax increment financing (TIF) district encompassing the proposed Tartan West development. This memo provides an update on issues related to establishing a TIF district for this area. In a previous memo dated October 8, 2003, I discussed the City's ability to establish a TIF district, or an "incentive district" as referenced in the Ohio Revised Code. A TIF district can be established for a residential development if the City Engineer certifies the public infrastructure serving the district is inadequate to meet the development needs as evidenced by a written economic development plan. Squire, Sanders and Dempsey, the City's bond counsel, has forwarded to us a copy of an economic development plan that has been adopted by the City of Columbus to establish a TIF district fora multi- family residential development. Based on our review of the economic development plan and the analysis of the public infrastructure that has been completed for the area that includes the proposed Tartan West development, Mike and I believe the City can meet the requirements of the Ohio Revised Code to establish a TIF district for the proposed development. We have also had preliminary discussions with Paul Hammersmith on the infrastructure needs in the area. The numerous TIF districts that have been established by the City have been for commercial developments. The proposed Tartan West development includes a limited amount of commercial development for awellness/fitness center. The public infrastructure improvements related to the established TIFs have provided a direct benefit to the property in the TIF districts and the public in general. The possible public infrastructure improvements that could be associated with this TIF would provide a direct benefit to the proposed development and the general public. We have reviewed potential infrastructure improvements that could be included in the Description of Public Infrastructure Improvements for this TIF if it were established. This potential TIF could provide a funding source for several public infrastructure improvements that are in the adopted 2004 - 2008 Capital Improvements Program (CIP). The funding sources currently identified for these improvements are income tax revenues and utility fees. Based on this preliminary review, several projects, including the Muirfield Drive/Brand Road and the Hyland Croy/Brand Road intersection improvement projects, could be funded from this potential TIF. As part of the planning process, the developer for Tartan West would be responsible for a small portion of these two improvements as well as several other infrastructure projects in the area. There are also infrastructure improvements that are identified as developer responsibility, such as "Road A" that connects Manley Road to Hyland Croy Road, that we Memorandum October 24, 2003 Page Two have discussed including in the TIF. We have projected the amount of service payments that could be generated from this potential TIF based on estimated costs of the wellness/fitness center, and the homes and build-out supplied by the developer. I have adjusted their estimated values to be more conservative. Based on my preliminary estimates, I am estimating that approximately $10 million in "non-school" service payments could be generated in a 10-year period beginning in 2007. There has been a concern expressed at staff level about using a TIF for residential development. The concern is that every residential developer coming in will request the same thing be done for their development; however, similar to economic development incentives, each development should be reviewed on its own. I feel this development is different in several respects. This project is much larger than most, this development is for approximately 251 acres. Larger scale projects such as this generally allow for a more cohesive development of the area which is a benefit to the community. Few residential developments of this size are assembled. This area also has significant existing infrastructure needs which have been identified and programmed in the City's CIP. Utilizing a TIF will provide a funding source to reimburse, over time, the City for the costs of those improvements. This project will provide different housing choices in Dublin that have been discussed as a need and the fitness/wellness center is an amenity that will help address the need for this type of facility as the City continues to grow. Please let me know if you have any questions or need any additional information. c: Frank Ciarochi, Deputy City Manager/Director of Development Mike Stevens, Director of Economic Development