New Albany City Council on Oct. 1 officially requested $5.15 million be released from the economic-development fund -- which is held by the New Albany Community Authority -- to improve local business parks.
City Manager Joseph Stefanov said he asked the community authority to release the funds Sept. 2 because its board met before he could get legislation before City Council.
"Typically, I come to you first," Stefanov said.
He explained that the community authority "can't release the funds until you approve this legislation."
City Council approved a resolution in a 7-0 vote.
The city will use the money for four projects in New Albany business campuses.
Three projects support the Personal Care and Beauty Campus at state Route 161 and Beech Road. Nine companies are part of the campus: Accel, Alene Candles, Anomatic Corp., Arminak and Associates, Axium Plastics, the Jeyes Group, the Knowlton Development Corp., Sonoco Plastics and Vee Pak.
First, the city must widen Beech Road from Jug Street south to Smith's Mill Loop Road, which could cost an estimated $2 million, Stefanov said.
New Albany City Council agreed Sept. 3 to apply to the Ohio Public Works Commission for half of the funding.
Stefanov said city officials would learn in January if New Albany will receive the state funds for the project. He said the money would be allocated in June 2014.
If the city receives money from the state, it would not need $2 million from the economic-development fund.
Construction is expected in 2014.
Second, the park needs a second water tower and a second water line, which are expected to cost $4.5 to $5 million, Stefanov said.
New Albany receives water from the city of Columbus and Columbus has agreed to fund $2.5 million of the estimated $5 million cost.
City officials are requesting $2 million from the economic-development fund for that project.
Stefanov said the project is slated to begin this year.
Third, the city needs to extend the fiber-optics lines in the Personal Care and Beauty Campus to loop and connect with other fiber lines so that if one line has an interruption in service, the businesses in the park would not lose access, Stefanov said.
That project is expected to cost $250,000 and would start in 2014.
The fourth project would connect businesses in the Zarley Industrial Park to the medical facilities on Forest Drive with the extension of Zarley Street to Forest Drive.
That work is estimated to cost $900,000 and would begin in 2014, Stefanov said.
Stefanov told City Council the city might finance the Beech Road widening and water-tower installation over a three-year period so the economic-development funds would not have to be released all at once.
"The multiyear disbursement will facilitate cash flow and the city may be able to obtain a very low interest rate due to its AAA bond rating," City Council's legislative report said.
Purpose of the fund
The economic-development fund was created before the business parks were developed with help from local resident and businessman Leslie Wexner, said New Albany spokesman Scott McAfee.
"Back when the business park was literally a vision in a cornfield, the (then) village government had neither the funds nor the credit to construct millions of dollars in necessary infrastructure improvements to grow the park," McAfee said. "Bonds were sold for this purpose, with Mr. Wexner backing the debt with a personal letter of credit."
McAfee said New Albany committed to repay the bonds by allocating 30 percent of income-tax revenue from the business park to an account held by the community authority, which was created by Wexner and his development company, the New Albany Co.
Thirty-five percent of the income-tax revenue generated from the business parks goes to the city, 35 percent goes to the New Albany-Plain Local School District and 30 percent goes into the economic-development fund, McAfee said.
McAfee said the debt for the business parks was structured so that the money in the economic-development fund is used "for projects only within the business park and must also encourage growth within the park itself."
"Today, when the city requests the use of economic-development funds from the community authority to further economic-development activity within the business park, these funds consist solely of income-tax revenues that have already been collected by the city," McAfee said.
McAfee said the economic-development fund is not related to the community authority's 4.75-mill property-tax assessment, which is collected from 16 residential neighborhoods, the New Albany Country Club communities and about 27 businesses, according to the community authority website.
Those funds are used to pay off debt incurred in the late 1990s to construct Fodor Road, improve the Plain Township fire station and build parts of New Albany High School.