New Albany News

Rapid progress leads City Council to tweak incentives

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New Albany officials last week modified an economic-incentive agreement for a company that has exceeded expectations for jobs and payroll.

New Albany City Council voted 5-0 on Nov. 5 to change the agreement and to review three tax-increment financing agreements at future meetings.

Jennifer Chrysler, the city's community development director, said the city needed to amend its agreement with NACOT I for its planned three-building office campus at NACOT Place.

The Daimler Group was expected to build three buildings on the site and create 200 jobs and a $5 million payroll with each building -- figures that have been exceeded with one building complete.

"IQor created 800 jobs at the facility, which is triple the amount required for this phase in the CRA agreement," according to Chrysler's legislative report to City Council. "The payroll for the project is $20 million, which exceeds the total payroll benchmark for the entire campus."

Two years ago, City Council offered a 15-year, 75 percent tax-abatement on the property that would increase to 100 percent on the first building as the second building was built and to 100 percent on the second building when the third building was built.

Chrysler said the agreement needed to be changed because the first tenant, iQor, an outsourcing company, needed a larger building and more parking than was anticipated when the incentive agreement was signed in 2011.

"Daimler is ready to break ground on phase two, which is approximately 67,200 square feet," Chrysler's report said. "The size of the first two facilities (iQor and the 67,000-square-foot building) with the additional parking does not allow for the construction of a phase three."

City Council approved a resolution that authorizes City Manager Joseph Stefanov to enter into a new economic-development agreement with NACOT I to reimburse the building owner for "payments in lieu of taxes" made in years 11 to 15 of the tax-abatement agreement because Daimler cannot build the third phase.

Chrysler said she could not estimate the amount the city might be required to return in the future payments.

The new agreement requires the Daimler Group to ensure "the overall investment, job creation and payroll benchmarks" in the original agreement are met.

In other business Nov. 5, City Council:

* Heard the first reading of an ordinance to create a tax-increment financing district south of Smith's Mill Road on 40 acres recently developed by Bob Evans Farms.

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 was approved.

The second reading of the ordinance is scheduled Nov. 19.

* Heard the first reading of an ordinance to create a TIF on 18.6 acres known as the Straits Farm development. It includes 51 empty-nester homes being developed west of Reynoldsburg-New Albany Road south of Maplewood Cemetery.

The second reading of the ordinance is scheduled Dec. 3.

* Heard the first reading of an ordinance to change the village center TIF to include parcels to the south and convert it entirely to a "nonschool" TIF, which allows the New Albany-Plain Local School District to earn property taxes from the area and changes the city's need for a revenue-sharing agreement with the school district.

Chrysler said the city shares income-tax revenue from development in the village center with the school district as part of an agreement approved when the original TIF was created. It is the only TIF in the city that was not created as a nonschool TIF, Chrysler said.

The second reading of the ordinance is scheduled Nov. 19.

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