Upper Arlington officials are eyeing the extension of a $70,000 business loan to aid the renovation of professional offices on the city's northeast side.
Upper Arlington City Council is expected to hear a final reading of legislation and vote Sept. 23 on a "large business loan/grant" to Kohr Royer Griffith Inc. (KRG), a Columbus-based commercial real estate developer.
The loan would offset a portion of the estimated $400,000 in renovations the company plans for office buildings at 1840 and 1880 Mackenzie Drive. It would be forgiven by the city if KRG completes the purchase of the building and the renovations, secures 85-percent occupancy in the two buildings for at least three years and reaches payroll tax estimates.
According to Upper Arlington Community and Economic Development Manager Bob Lamb, the project is expected to generate more than $500,000 in income taxes for the city over 10 years.
"This project will help the city return one of these sites to a competitive market level, thus allowing for new commercial space to be marketed to existing businesses," Lamb said. "Due to the amount of older office buildings located in the city, this type of redevelopment opportunity needs to be supported when they become available.
"Further, the city will be attracting at least one new employer to the city," he said. "Kohr is currently working on finalizing a lease with a company that is not currently located in Upper Arlington. This will further expand our business community and bring new jobs to the city."
Including the purchase of the two buildings, which total 28,500 square feet, KRG's investment in the project would be $1.1 million.
Lamb said a key component of the city's incentive package includes provisions that Arlington Bank and Portwales Investment LLC sign 10-year lease agreements to operate from the renovated buildings.
Through the agreements, Lamb said, Arlington Bank will remain in the city for the next decade and increase its workforce by 20 employees.
"This will add to the economic vitality of the city by creating new jobs, growing existing payrolls and strengthening one of the community's key business partners," he said. "Further, the redevelopment of this site will allow the Arlington Bank to retain current employees in the city of Upper Arlington.
"The Arlington Bank needs to open up space for new employees at their Reed Road location," Lamb said. "The redevelopment of this site will allow them to shift these employees to a new location in the city of Upper Arlington. This will keep existing employees in the city."
Paul Bloomfield, a KRG partner, said the two Mackenzie Drive buildings currently have a combined vacancy rate near 35 percent.
He said the renovations will include upgrades to the exteriors of the buildings, but most of the work will be geared toward making the office spaces and facilities compliant with the Americans with Disabilities Act.
"Both buildings are two stories and they are non-ADA-compliant," Bloomfield said. "The majority of the money will be spent on updating the buildings to allow their second floors to be accessed from the elevator and making the bathrooms ADA-compliant."
Bloomfield said KRG is close to securing lease agreements with two professional office users, but he declined to identify them. He added that the renovations will begin this fall, if the company receives the loan from the city.
"Our investment is going to far exceed whatever loan/grant the city gives us," he said. "We're looking to really modernize these buildings to keep the occupancy up and to attract office users to Upper Arlington."