As Powell officially greenlights the biggest project in the city's history, leaders will provide Ohio State University with hundreds of thousands of dollars in tax incentives.
At their Nov. 20 meeting, Powell City Council approved a development and incentive agreement with Ohio State granting three incentive agreements for the university's proposed ambulatory-care center at the northeast corner of Home Road and Sawmill Parkway.
The facility, planned on a plot of land set to be annexed into the city from Liberty Township, is expected to employ up to 500 people with a payroll of up to $50 million in its first phase, followed by another 125 to 500 employees and between $9.4 million and $37.5 million in payroll during its second phase.
"This isn't just a boon for the city; it's a boon for the area," Powell Mayor Jon Bennehoof said. "This is a very significant achievement. I just can't say how eager we are."
The first part of the agreement, called a job-creation incentive, grants a 50 percent income-tax break for a period of 15 years. That incentive will not kick in until the first year after Ohio State reaches $25 million in payroll for the property.
The job-creation incentive also provides an 18-month period when Ohio State will receive 100 percent of income taxes generated by "temporary construction employees" during construction of the facility.
In the second part of the agreement, called the sanitary-sewer incentive, Powell, Delaware County and Ohio State agreed to split three ways the cost of installing sanitary sewers on the property.
That sewer work is expected to cost $900,000, and Powell's contribution will be capped at $300,000 regardless of the overall cost of the project.
Finally, in an infrastructure-incentive agreement, the city agreed to reimburse the university $650,000 for "street infrastructure costs" that will be paid through Powell's Sawmill Parkway tax-increment financing district.
This portion of reimbursed funds will not be paid until "2023 at the earliest," according to the agreement.
Although council members unanimously were in favor of the deal, Councilman Tom Counts, who leads the finance committee, brought the conversation back down to earth.
"We've talked about this, and I think everyone believes this is a good deal for the city," he said, "but I would caution council to think about both its short-term implications and long-term implications from this deal."
Counts warned that the city's costs are fixed and Ohio State's projected revenues are variable.
He said his calculations suggest that because of the long-term nature of the project, the city's "break-even point" is likely five to 10 years in the future, meaning residents shouldn't expect a massive windfall in new funding any time soon.
"Five to 10 years down the road means that this project is not going to generate money for the city ... for a long time," he said.
"The point that it really generates dollars will be probably 2036 or 2037. So I don't want our residents to think that this is the bonanza we've been waiting for and it's going to solve all our economic problems. We still have a short-term problem with infrastructure."
Councilman Frank Bertone agreed, saying in the short term, the city is in for a "very painful time."
"I think a lot of folks see this OSU opportunity as somewhat of a significant (short-term) windfall for the city. It is not that," Bertone said. "It is certainly a long-term partnership that we're looking forward to, but it's going to have a very long runway."
With two council members absent, the five members present at the Nov. 20 meeting approved the incentives unanimously and by emergency, meaning the agreements take effect immediately.