Westerville's investment in Westar Place has brought the city another new tenant, this time in the form of a new headquarters for a Fortune 500 company.
At its May 15 meeting, Westerville City Council approved a purchase agreement with Hyperion Properties for a 10.1-acre parcel of Westar Place that sits across the lake from the newly opened Renaissance Marriott Hotel, 409 Altair Parkway.
According to City Manager David Collinsworth, Hyperion is the real-estate subsidiary of German logistics company DHL, which plans to use the space for a 145,000-square-foot, 4-story facility, worth $20 million, that will be its new North and South American headquarters.
Collinsworth said DHL is already a "major employer" in Westerville, thanks to its location at 570 Polaris Parkway that employs 630 people. When construction of the new facility is complete, Colllinsworth said, DHL will move its operation to Westar Place.
"This is huge," Council Chairman Mike Heyeck said.
Westerville will sell the parcel for $175,000 per acre, netting about $1.65 million and inching closer to officially making its money back on the $6.38 million it spent for the land in 2014.
"The impact with respect to Westar Place overall is significant at this point," Collinsworth said. "With this contract going through, we have eight parcels that are either sold or under contract awaiting closing, with six parcels remaining.
"Once all the parcels under contract are closed on, sufficient funds will have been generated to fully pay off the original $6.3 million land-acquisition note which helped us to acquire the property in 2014."
To attract DHL to the space, the city offered a 100 percent property-tax abatement for 12 years worth an estimated $7.2 million, according to Jason Bechtold, the city's economic development director.
Bechtold said DHL currently has an $87 million payroll for its local 630 employees.
He said the agreement includes a 3 percent expansion of that payroll each year and will net an increase of $250,000 per year for the Westerville school system, $7,500 for the Westerville fire fund and $2.5 million annually to the city.
Despite those numbers, councilman Tim Davey opposed the agreement, something he has done for nearly every tax abatement or tax-increment financing agreement proposed since his election to council in 2014.
He said he did not believe in "shifting the burden" of tax revenue and the agreement did not show a "clear benefit" for Westerville.
"This incremental revenue that we'll be receiving from DHL, is that being spent to reduce taxes for everyone or is that just increasing spending as we normally do at the city level?" he asked.
Davey received pushback from multiple other council members.
"These are just flatly specious arguments," Mayor Craig Treneff said. "Without the (agreement), DHL would be looking elsewhere. I'm confident of that, simply because that's the economic landscape of this country. It's not limited to Westerville or Ohio. It's the landscape nationwide.
"The idea that these short-term agreements is a shifting of taxes is a misrepresentation to the public about how this works."
"We didn't choose DHL; DHL chose us," councilwoman Kathy Cocuzzi said. "They did it because they like what Westerville has to offer and they like what they see in that whole area that wouldn't have been done if we didn't do any of these agreements in the first place. There would be nothing there. So it's ridiculous to keep going around in circles."
But Davey said until the city was willing to do an in-depth analysis about the funding and its effect on the city, he wouldn't vote for anything involving tax abatements, even to attract a company such as DHL.
"I'm not comfortable that this is a net positive for the community," he said.
Ultimately, council approved the sale and tax-abatement agreements, each by a 6-1 vote, with Davey dissenting.
Heyeck ended the conversation with a message to DHL and Westerville residents.
"We are going to be the North and South American headquarters for DHL," he said. "I think probably nine out of 10 people in Westerville know what DHL is. They're a great employer; they're going to provide great value for the city of Westerville. They're going to pay the income taxes that help our citizens."
For the full text of both agreements, visit Westerville.org.