The Union County-Marysville Economic Development Partnership intends to add a new tool to its development tool kit.

The Union County-Marysville Economic Development Partnership intends to add a new tool to its development tool kit.

Marysville City Council heard the first reading of legislation Thursday night to create the Marysville-Union County Port Authority.

"A port authority is a political subdivision which is created by a county or by a joint partnership between the largest municipal corporation in the county and the county," said Eric Phillips, executive director of the Union County-Marysville Economic Development Partnership.

A port authority can buy, sell and lease property, issue federal tax-exempt bonds, establish and operate foreign trade zones, make loans, own property, receive federal and state grants and loans, use eminent domain and levy taxes, Phillips said.

"One of the main advantages of a port authority is that it can assist a business by owning property and leasing it back to the business so that the property is 'off the books,'" Phillips said. "The port authority can also issue bonds which are tax-exempt, which could result in cost savings for the business."

As an example, Phillips said that if a port authority had been in place in the 1990s, it could have helped the Scotts Miracle-Gro Co. when it expanded its System IV facilities.

"Since we did not have a port authority in place, the Ohio Department of Development now owns a majority of the property on which the Scotts Co. is located," he said.

Phillips said there are currently more than 40 port authorities operating in Ohio, including the Marion County and Delaware County port authorities, the Columbus-Franklin County Finance Authority, the Columbus Regional Airport Authority and the West Central Ohio (Springfield) Port Authority.

"The Marion Port Authority was recently used by the Union County YMCA to secure bonds in which $6-million in financing fees was paid to the Marion Port Authority," he said. "If we had a port authority in place, that money could have stayed here in Union County and been reinvested in the business community."

Phillips noted that while Union County already has a Community Improvement Corporation (CIC) in place, a port authority would have more powers and abilities including "off the books" financing and tax-exempt bonds.

Phillips said the idea to create a local port authority had been discussed in the past but took hold during a September 2007 joint meeting with Marysville City Council and the Union County Board of Commissioners. During that meeting, Steve Grasbaugh of Peck Shaffer and Williams, a Columbus-based law firm, made a presentation and answered questions related to the formation of a port authority.

"The general consensus of the meeting was for the city and county to pursue the creation of a port authority," Phillips said.

While the port authority would be authorized to levy taxes and use eminent domain, Phillips said that power would be limited. Those actions could only be taken with ormal approval of both Marysville City Council and the Union County Board of Commissioners.

Phillips said the authority would be governed by a seven-member board. Marysville City Council and the mayor would appoint three members. The Union County Commissioners would appoint three members, and all three entities would appoint the seventh member. No members would be elected officeholders, but would come from the business community.

jdonahue@thisweeknews.com

While Union County already has a community improvement corporation in place, the addition of a port authority would help bolster development activity in the area.

Under the Ohio Revised Code, a port authority has 25 defined powers while a CIC has only nine.

Among the powers of a CIC:

The ability to borrow money, issue bonds, notes and secure borrowing by a mortgage or other means. However, since a CIC is not a political subdivision or a municipal corporation, it does not have the power to issue federal tax exempt bonds.

The ability to make loans to a person or corporation, provided the borrowing party has applied for the loan through ordinary banking or commercial channels and been refused by at least one financial institution.

The ability to purchase, sell or lease property.

The ability to buy or sell the assets of businesses, including industrial plants and other business establishments, as well as real estate.

The ability to buy or sell ownership interest and other securities, including debt, of all kinds of businesses.

The ability to mortgage, pledge or otherwise encumber any of its own property.

The ability to become a member or stockholder of a development corporation.

The ability to serve as an agent for grant applications and for the administration of grants.

And, the ability to do "all things necessary or convenient" to carry out the abovementioned powers.

A port authority has many of those same abilities plus many others in its powers granted under the Ohio Revised Code.

One of the major differences is that as a political subdivision, the interest on a port authority's bonds or notes can be exempt from federal taxation, if structured properly.

The other most significant power of a port authority is its ability to exercise the right of eminent domain.

Eric Phillips, Union County-Marysville Economic Development Partnership executive director, said port authorities have a proven track record of success.

"In 2005, the Ohio Department of Development conducted a survey and study on the economic impact of Ohio's 40-plus port authorities," Phillips said. "The $.7-billion annual economic impact in 2004 was a significant part of Ohio's $407-billion gross state product for 2004."

Phillips said port authorities were responsible for more than 53,000 jobs and an annual payroll of $1.2-billion.

"A Marysville-Union County port authority would provide our community another economic development tool for creating investment, jobs and payroll," Phillips said.

jdonahue@thisweeknews.com