Pickerington officials have agreed to purchase 214 acres near the intersection of Busey and Pickerington roads that they say is ripe for commercial and industrial development and could help protect the city from a high-density residential project.

In what officials called a "great buy" and one that ultimately will lead to economic development opportunities that will generate income taxes for the city, Pickerington City Council unanimously voted Nov. 6 to purchase the land west of Pickerington Road and south of Busey Road from 8185 Pickerington Holdings LLC.

The city is issuing $4 million in notes to pay $3.3 million for the land, which is located in Violet Township and will have to be annexed into Pickerington, and other costs associated with the purchase.

According to Mayor Lee Gray, the city has long coveted the land but had to stand pat because it has been in contract for sale to residential developers multiple times in recent years.

City Manager Frank Wiseman said the property is attractive to the city because it includes 70-80 acres that front Pickerington Road that the city intends to market for commercial and industrial development that would generate income taxes.

He also said it would give the city control over the remainder of the land that likely will become a housing developments.

"This property is close enough to be annexed to the city and is large enough with a great deal of frontage on Pickerington Road for our needs," Wiseman said. "We were concerned with its potential to be developed as all homes, right on our border.

"With this purchase, we will be able to set aside 70-80 acres for commercial development and we can guarantee the residential portion will not be more dense than two units per acre. An added advantage is the $4,200 impact fee the city receives per home."

Wiseman said if the land was to be developed outside Pickerington's borders and governance, the city "would not be able to collect the impact fees, control density and we would not be able to annex the ground we want to develop commercially."

Currently, the 214 acres consists of undeveloped land, a house and a 9,000-square-foot commercial building.

Wiseman said Horner Appraisal Group recently valued the land at $4 million to $4.28 million, and the property was being marketed for $4.28 million.

Pickerington Finance Director Chris Schornack said including an assignment fee the city must pay for the transaction, the total for the land purchase is $3.767 million.

"The notes were greater than the land costs due to legal fees and other issuance costs associated with the debt issue," he said. "The money gets paid back in several ways.

"The developer agreement states the city will receive $8,000 per lot with a total of 280 buildable lots for a total of $2.24 million paid back to us by the developer."

Schornack said the city is responsible for paying back the balance of the notes "with non-tax revenues received in the general fund."

"These could be permit fees, interest, zoning fees, franchise fees, cell tower leases, etc.," he said. "These are revenues that are not property or income taxes.

"No impact fees can be used to pay back the debt."

Council President Jeff Fix said the investment in the land, as well as how the city is seeking to guide its development, is a shift in policy and strategy that will produce better results for income-tax generation, while also reducing burdens to local schools brought on when new housing developments lead to an influx of students.

"A generation ago the city of Pickerington would annex land by promising high-density housing, forgiven tap fees and other incentives to developers in exchange for their agreement to annex," Fix said. "In 2018, the city is growing by making smart decisions about buying land and annexing it to the city.

"By doing so, the city is able to guarantee commercial development on the property, as well as a density of two units per acre, thus protecting our infrastructure and schools," he said. "This commercial development and lower density make this property more valuable than if the city had not stepped in to buy it."

Fix added development of the land presents "a clear path to a return on investment for the city."

Both Wiseman and Gray called the purchase a "great buy" for the city, but Wiseman noted there's no clear timetable for its development.

He said projects for the property will be "market- and need-driven."

"Development opportunities will continually change and we wish to be ready," Wiseman said. "Ground in Pickerington will continue to have great value."

Gray said the investment will "pay for itself" after residential developers pay impact fees. He said commercial and industrial development on the 70 to 80 acres fronting Pickerington Road will generate income taxes as its built out.

He said no deals currently are in place for the land's development, but he believes it will offer attractive space for residential developers, new commercial and industrial projects, as well as a place where current Pickerington businesses could relocate and grow.

"This type of ground is quickly going away in our area because it's getting developed," Gray said. "The key is the control– (the city) has the property.

"It's going to be a positive for the city of Pickerington for years to come."