City Council mulls amendment to 'gateway' development TIF
Hilliard City Council members could revise a tax-increment financing (TIF) agreement with Britton Parkway GE LLC concerning a mixed-use retail, office and residential development at Britton Parkway and Cemetery Road.
The need to revisit the agreement will delay the project because the developer, Continental Real Estate, postponed closing on the purchase of the property while the amendment is pending. As the project is completed, ownership will be transferred to Britton Parkway GE, of which Continental Real Estate will be a component.
Council members thought the matter had been settled July 9 when, after months of negotiations, they approved development of the 56-acre parcel at the northwest corner of Cemetery Road and Britton Parkway. It includes plans for a 84,000-square-foot Giant Eagle, a 450-unit residential complex, medical offices and restaurants, among other amenities.
But upon their return Aug. 27 from a summer recess, council members reviewed an ordinance that would amend the original agreement by lifting a maximum $4.5-million cap on the amount of money Hilliard will repay the developer for the construction of public infrastructure needed to support the development.
The current estimate for required infrastructure, including stormwater and sewer lines, curbs, gutters and new roundabouts on Britton Parkway, is about $6.8 million.
The amended ordinance was referred back to committee after its first reading. It next will be considered at the Sept. 10 meeting of the Economic and Entrepreneurial Development Committee. A public hearing also is expected at the Sept. 10 City Council meeting.
Two council members, Nathan Painter and Stephanie Kunze, voted against reassigning the ordinance to a committee.
"I think (the agreement) should stay as is," Kunze said after the Aug. 27 council meeting.
The amended ordinance was introduced by the Economic and Entrepreneurial Development Committee, which met immediately prior to the full council meeting.
Law Director Pam Fox said there had been some "disagreement and misunderstanding" regarding the administration of the TIF, including the manner in which the Hilliard school district is reimbursed.
A TIF is an economic development mechanism available to local governments to finance public infrastructure improvements and, in certain circumstances, residential rehabilitation, according to the Ohio Department of Development. A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation is approved.
The developer was to reimburse the school district according to the existing TIF agreement, but the amended agreement calls for the school district to be reimbursed from a tax-increment finance fund.
Fox outlined the order in which entities are to be repaid.
For the first three years of the TIF agreement, the city of Hilliard will use the general fund to reimburse the developer; the school district is the next to receive reimbursement, followed by the city of Hilliard and then Continental Real Estate.
After the third year, the school district is reimbursed first, then the city of Hilliard and last, Continental Real Estate.
The term of the TIF has not been set; it will be contingent on how many projects the city of Hilliard identifies as associated with the project or determines could provide a regional benefit.
Some council members voiced concern about the amendment.
"I'm surprised to be here ... this was already negotiated," Council President Brett Sciotto said.
But Frank Kass, chairman of Continental Real Estate, said the amount of infrastructure was underestimated and costs had also increased since the estimates were last prepared.
"The infrastructure needed for all the projects is yet to be determined," Kass said.
Hilliard Mayor Don Schonhardt concurred that the $4.5 million was an estimate, but said the administration also desires the flexibility of identifying additional projects that TIF funds could finance.
Councilman Al Iosue said he supported the plan of additional infrastructure but questioned the incentive for a developer to control costs if TIF funds were not limited.
Kass said the Britton Parkway project is not bonded but rather financed with a four-year, $6.5-million loan, therefore "we're at risk for all of this."
"We want this road to be a showcase," Schonhardt said of Britton Parkway and the need for the flexibility to finance more than $4.5 million in projects.
Those could be done as part of the current development or an unrelated future project within the corridor.
Schonhardt and Council members have described Cemetery Road and Britton Parkway as a "gateway to Hilliard," and Britton Parkway as an office and retail resource akin to Emerald Parkway in Dublin.
Two prior proposals for the intersection were withdrawn and developers for the current proposal once walked away from a meeting, prompting Hilliard officials to believe the third proposal was dead.
But an agreement was reached July 9 for construction of the mixed-use retail, office and residential development.