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Ordinance 116-14Dayton Legal Blank, Inc. Ordinance No. RECORD OF ORDINANCES 116-14 Form Noo30043 Passed 20, AN ORDINANCE DECLARING THE IMPROVEMENT TO CERTAIN PARCELS OF REAL PROPERTY IN THE CITY'S BRIDGE STREET DISTRICT TO BE A PUBLIC PURPOSE AND EXEMPT FROM TAXATION; PROVIDING FOR THE COLLECTION AND DEPOSIT OF SERVICE PAYMENTS AND SPECIFYING THE PURPOSES FOR WHICH THOSE SERVICE PAYMENTS MAY BE EXPENDED; SPECIFYING THE PUBLIC INFRASTRUCTURE IMPROVEMENTS DIRECTLY BENEFITING THE PARCELS; AND AUTHORIZING COMPENSATION PAYMENTS TO THE DUBLIN CITY SCHOOL DISTRICT AND THE TOLLES CAREER AND TECHNICAL CENTER. WHEREAS, the City has prepared a strategy for comprehensive development within an area of the City known as the Bridge Street District (which area is referred to herein as the "District's and has endeavored to work collaboratively with public entities, including the Dublin City School District ("Dublin School Distric l and the Tolles Career and Technical Center ("Tolles Career Centerj, and private entities to plan for and facilitate the development of the District; and WHEREAS, the City's strategy for development within the District is primarily focused on creating a new, more urban core for the City, including a dynamic mix of commercial and residential development types generally not currently available within the City; and WHEREAS, the City and [name of Casto Entity] have heretofore executed a Development and Tax Increment Financing Agreement dated 2015 which generally provides for the construction of project which will include for the construction of a project which will include mixed uses, and the construction of various public infrastructure improvements (the "Casto Development'; and WHEREAS, to facilitate development throughout the District, including but not limited to the Casto Development, and pay the associated costs of infrastructure improvements and related incentives, this Council has determined pursuant to Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43 (collectively, the "TIF Statutes'l to declare the improvement to certain parcels of real property located within the City to be a public purpose and exempt from taxation, require the owner of each parcel to make service payments in lieu of taxes, provide for the distribution of an applicable portion of such service payments to the Dublin School District and Tolles Career Center, establish a municipal public improvement tax increment equivalent fund for the deposit of the those service payments, and specify public infrastructure improvements made, to be made or in the process of being made that directly benefit, or that once made will directly benefit, those parcels; and WHEREAS, the Board of Education of the Dublin School District has heretofore adopted a resolution on April 14, 2014 waiving the provision of certain notices, approving the tax exemption of the Improvements (as defined in Section 3), authorizing an agreement (which has heretofore been executed) between the City and the Dublin School District providing for the remission of certain payments to the Dublin School District (the "Dublin School District Agreementl and making other findings with respect to the tax exemption; and WHEREAS, the Board of Education of the Tolles Career Center has heretofore adopted a resolution on June 26, 2014 waiving the provision of certain notices, approving the tax exemption of the Improvements, authorizing an agreement (which has heretofore been executed) between the City and the Tolles Career Center providing for the remission of certain payments to the Tolles Career Center (the "Tolles Career Center Agreement's and making other findings with respect to the tax exemption; and NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, State of Ohio, of the elected members concurring, that: RECORD OF ORDINANCES Dayton Legal Blank, Inc. Fotm No. 30043 116-14 Page 2 of 3 Ordinance No. _ _ Passed _ 20 Section 1. Parcels. The parcels of real property subject to the exemption granted by this Ordinance are identified and depicted in EXHiBiT A attached hereto (each, as currently or subsequently configured, individually, a "Parcel' and collectively, the "Parcels'). Section 2. Public Infrastructure Improvements. This City Council hereby designates the public infrastructure improvements described in EXHiBiT B attached hereto (the "Public Infrastructure Improvements'l and any other public infrastructure improvements hereafter designated by ordinance as public infrastructure improvements made, to be made or in the process of being made by the City that directly benefit, or that once made will directly benefit, the Parcels. Section 3. Authorization of Tax Exemption. This City 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 "Improvement" as defined in Ohio Revised Code Section 5709.40(A)) is hereby declared to be a public purpose and shall be exempt from taxation in accordance with Ohio Revised Code Section 5709.40(8) for a period commencing for each Parcel with the first tax year that begins after the effective date of this Ordinance and in which an Improvement attributable to a new structure on that Parcel first appears on the tax list and duplicate of real and public utility property were it not for the exemption granted by this Ordinance and ending on the earlier of (a) thirty (30) years after such commencement or (b) the date on which the City can no longer require service payments in lieu of taxes, all in accordance with the requirements of the TIF Statutes. Section 4. Service Payments. Pursuant to 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 Improvement allocable thereto to the Treasurer of Franklin County, Ohio (the "County Treasure`) on or before the final dates for payment of real property taxes. The service payments in lieu of taxes shall be charged and collected in the same manner and in the same amount as the real property taxes that would have been charged and collected against that Improvement if it were not exempt from taxation pursuant to Section 3 of this Ordinance, including any penalties and interest (collectively, the "Service Payments'). The Service Payments, and any other payments with respect to each Improvement that are received by the County Treasurer in connection with the reduction required by Ohio Revised Code Sections 319.302, 321.24, 323.152 and 323.156, as the same may be amended from time to time, or any successor provisions thereto as the same may be amended from time to time (the "Property Tax Rollback Paymen&J, shall be allocated, distributed and deposited in accordance with Section 6 of this Ordinance. Section 5. TIF Fund. This City Council hereby establishes, pursuant to and in accordance with the provisions of Ohio Revised Code Section 5709.43, the Tuller Municipal Public Improvement Tax Increment Equivalent Fund (the "TIF Fund). The TIF Fund shall be maintained in the custody of the City and shall receive all distributions to be made to the City pursuant to Section 6 of this Ordinance. Those Service Payments and Property Tax Rollback Payments received by the City with respect to the Improvement of each Parcel and so deposited pursuant to Ohio Revised Code Section 5709.42 shall be used solely for the purposes authorized in the TIF Statutes or this Ordinance. The TIF 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 the TIF Fund shall be dissolved and any incidental surplus funds remaining therein transferred to the City's General Fund, all in accordance with Ohio Revised Code Section 5709.43. Section 6. Distributions. Pursuant to the TIF Statutes, the County Treasurer is requested to distribute the Service Payments and Property Tax Rollback Payments to the City for further deposit into the TIF Fund for (a) remission, on a pro rata basis, to RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 116-14 Page 3 of 3 Ordinance No. Passed 120 the Dublin School District in accordance with the Dublin School District Agreement and the Tolles Career Center in accordance with the Tolles Career Center Agreement, (b) payment of costs of the Public Infrastructure Improvements, including, without limitation, debt charges on any securities of the City issued to pay or reimburse financing costs or costs of those Public Infrastructure Improvements and (c) any other lawful purpose. Section 7. Further Authorizations. This City Council hereby authorizes and directs the City Manager, the Director of Finance, the Director of Law, the Director of Development, the Clerk of Council or other appropriate officers of the City to make such arrangements as are necessary and proper for collection of the Service Payments and the Property Tax Rollback Payments. This City Council further hereby authorizes and directs the City Manager, the Director of Finance, the Director of Law, the Director of Development, the Clerk of Council or other appropriate officers of the City to prepare and sign all documents and instruments and to take any other actions as may be appropriate to implement this Ordinance. Section 8. Tax Incentive Review Council. The applicable Tax Incentive Review Council, with the membership of that Council to be constituted in accordance with Section 5709.85 of the Ohio Revised Code, shall, in accordance with Section 5709.85 of the Ohio Revised Code, review annually all exemptions from real property taxation granted by this Ordinance and any other such matters as may properly come before that Council, all in accordance with Ohio Revised Code Section 5709.85. Section 9. Filings with Ohio Development Services Agency. Pursuant to Ohio Revised Code Section 5709.40(I), the City Manager is hereby directed to deliver a copy of this Ordinance to the Director of the Ohio Development Services Agency within fifteen days after its effective date. Further, and on or before March 31 of each year that the tax exemption authorized by Section 3 remains in effect, the Director of Development or other authorized officer of the City is directed to prepare and submit to the Director of the Ohio Development Services Agency the status report required under Ohio Revised Code Section 5709.40(I). Section 10. Open Megtbg. This City Council finds and determines that all formal actions of this City Council and any of its committees concerning and relating to the passage of this Ordinance were taken in an open meeting of this City Council or any of its committees, and that all deliberations of this City Council and any of its committees that resulted in those formal actions were in meetings open to the public, all in compliance with the law including Ohio Revised Code Section 121.22. Section 11. Effective Date. This Ordinance shall be in full force and effect on the earliest date permitted by law. Signed: Mjryor - Presiding cer Attest: Clerk of Council Passed: 11r 206 Effecbv r 20t�- EXHIBIT A IDENTIFICATION AND MAP OF THE PARCELS The shaded area on the following map specifically identifies and depicts the Parcels and constitutes part of this EXHIBIT A. The Parcels include, without limitation, the following tax parcels: 273-008249, 273-008811, and 273-009322 (as they existed in the County Auditor's records on , 2014). A-1 Rd TIFs EXHIBIT B PUBLIC INFRASTRUCTURE IMPROVEMENTS The Public Infrastructure Improvements include the following improvements and all related costs of those improvements (including, but not limited to, those costs listed in Section 133.15(8) of the Ohio Revised Code): • Construction of roadways and other infrastructure improvements within the Bridge Street District, including those improvements indicated in the City of Dublin Thoroughfare Plan. Examples include but are not limited to the following: o Construction of John Shields Parkway, o Construction of Hobbs Landing Drive, o Construction of McCune Avenue, o Construction of Watson Street, o Construction of Deardorff Street, o Construction of a roadway connecting Dale Drive and Tuller Ridge Drive, o Improvements to Tuller Road from Riverside Drive to Tuller Ridge Drive, o Improvements to Riverside Drive between Tuller Road and SR 161, o Improvements to Tuller Ridge Drive, o Improvements to Dale Drive, o Improvements to the Riverside Drive/Tuller Road intersection, o Construction of a roundabout at the intersection of US 33/Riverside Drive/SR 161, and o Construction of a roadway connecting Dale Drive to Village Parkway, • Improvements to accommodate on -street parking throughout the Bridge Street District, • Construction of the Scioto River pedestrian bridge, • Improvements to and/or replacement of the existing Bridge Street vehicular bridge, • The construction of public parking (including acquisition of interests in real property and related design), • Construction of civic facilities including but not limited to a public library, arts facility, and municipal government facility, • Land acquisition for public purpose, • Construction of public parks and open space plazas, and in each case, together with transportation improvements, including constructing, reconstructing, extending, opening, widening, grading, draining, curbing, paving, resurfacing, and traffic signage and signalization, bridges or tunnels, public utilities, including water, sanitary sewer, storm sewers, storm water improvements, burial and/or relocation of utility lines, gas, electric and communications service facilities (including fiber optics), street lighting, business signage restoration or improvements, landscaping, aesthetic improvements, sidewalks, bikeways, acquisition of interests in real property, erosion and sediment control measures, and acquisition of related equipment, each together with all other necessary appurtenances thereto, which improvements will benefit the Parcels. M Icityof Dublin Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017-1090 Phone: 614-410-4400 • Fax: 614-410-4490 Memo To: Members of Dublin City Council From: Marsha I. Grigsby, City Manager `%� Date: December 4, 2014 Initiated By: Angel L. Mumma, Director of Finance Re: Ordinance Nos. 116-14 and 118-14 — Ordinances Establishing Tax Increment Financing Districts (Tuller) Background In conjunction with Ordinance No. 115-14, which authorizes the City Manager to enter into a Development and Tax Increment Financing (TIF) Agreement with Casto Tuller LLC for the development of property within the Bridge Street District (BSD), Ordinances No. 116-14 and No. 118-14 propose the establishment of the Tuller TIF under two different sections of the Ohio Revised Code (ORC). Ordinance No. 116-14 would establish a TIF under the provisions of ORC 5709.40 on parcels 273- 009322, 273-008249, and 273-008811 (parcels highlighted in blue on the attached map). This section permits the legislative authority of a municipal corporation to declare improvements to certain parcels of real property located in the municipal corporation to be a public purpose. An ordinance adopted under this section designates the specific public infrastructure improvements made, to be made, or in the process of being made by the municipal corporation that directly benefit, or that once made will directly benefit, the parcels for which improvements are declared to be a public purpose. The service payments generated in this area will be used to finance the public infrastructure improvements designated in the ordinance. All of the active TIFs throughout the City were established under this section of ORC. Ordinance No. 118-14 would establish a TIF under the provision of ORC 5709.41 on parcel 273- 009088 (parcel highlighted in red on the attached map). This section permits the legislative authority of a municipal corporation to declare any improvement to a parcel of real property to be a public purpose if (1) the municipal corporation held fee title to the parcel prior to the adoption of the ordinance and (2) the parcel is leased, or the fee of the parcel is conveyed, to any person either before or after adoption of the ordinance. Service payments generated on improvements to parcels within a TIF established under this section or ORC are permitted to be used to finance public and private improvements. This would be the first TIF established within the City under this section of ORC. Service payments received in a TIF established under 5709.40 can only be used to fund public infrastructure improvements, while those received in a TIF established under 5709.41 can be used to fund public and private infrastructure improvements. Memo re. Ordinance Nos. 116-14 and 118-14 — Ordinances Establishing Tax Increment Financing Districts (Tuller) December 4, 2014 Page 2of3 Given that the City currently owns 10± acres known as the Byers property, it is appropriate to establish a TIF under ORC 5709.41 on this particular parcel as it provides the City additional flexibility, at the City's sole discretion, to fund various improvements, whether public or private. These proposed TIF Districts are within the defined area covered by the Bridge Street District Cooperative Agreement between the Dublin City School District (DCS) and the City. As a reminder, the Cooperative Agreement permits the City to authorize various tax incentives, including TIFs, within the BSD that provide for the following (for each incentive authorized): ■ Years 1-15 — DCS agrees to forego 100% of the applicable real estate taxes in respect of the improvements to any particular parcel within the applicable tax incentive district. ■ Years 16-30 — DCS will receive 10% of what it would have received if the applicable tax incentive district had not been in place. Additionally, as part of the Cooperative Agreement, DCS waived any right to receive notification of the passage of any Ordinance or legislation authorizing the real property tax exemptions. However, staff has notified Dublin City Schools that this new TIF within the Bridge Street District is being considered by City Council. For the purposes of projecting potential service payments, staff has estimated that the market valuation of the private improvements will be $20 million (the TIF Agreement provides that Casto Tuller LLC will make minimum service payments to the City based on this estimated market valuation if the final market valuation is less than $20 million). Based on the current millaQe, it is estimated that at completion of Phase I, the TIF will generate approximately $702,000 annually in years 1-15 and $655,000 annually in years 16-30. While this valuation has been utilized in staffs projections, it is anticipated that the valuation for the Phase I development will be in excess of $20 million. These service payments will provide funding for the public infrastructure improvements contemplated in the Agreement, including John Shields Parkway, Hobbs Landing Drive, McCune Avenue, Watson Street, Deardorf Street, as well as other Bridge Street District infrastructure improvements that are identified within the TIF Ordinances. As Council is aware, other governmental jurisdictions are impacted by the establishment of TIF districts and the resulting deferral of property tax revenue. In Franklin County, several agencies have operating levies. For those agencies, the Tuller TIF will result in the following estimated annual property tax deferrals (based on valuation of $20 million): ■ Children's Services $34,900 ■ ADAMH 15,400 ■ MRDD 49,000 ■ Metro Parks 5,200 ■ Office on Aging (Senior Options) 9,100 In addition to Franklin County, there are other agencies that have operating levies in place. The annual property tax deferrals (based on valuation of $20 million) for those agencies are as follows: ■ Columbus Zoo $ 5,200 ■ Columbus Metropolitan Library 19,600 ■ Washington Township 74,500 Memo re. Ordinance Nos. 116-14 and 118-14 — Ordinances Establishing Tax Increment Financing Districts (Tuller) December 4, 2014 Page 3 of 3 It is noteworthy to mention that these agencies will continue to receive their respective portion of the property taxes generated on the base value of the properties prior to the TIF being established. Only the incremental increase in valuation is attributable to the TIF. Additionally, it is important to keep in mind how these dollars compare to the overall tax revenue collected by these agencies. The total assessed valuation for all of the City's established TIF districts within Franklin County is $489 million, which is less than two percent of Franklin County's total assessed valuation (per the Franklin County 2013 CAFR). Recommendation Staff recommends that Council adopt Ordinances No. 116-14 and No. 118-14 at the second reading/public hearing on January 5, 2015.