Groups line up on both sides of Upper Arlington community center Issue 2
CORRECTION: Omar Ganoom, ACTT's treasurer, is managing director of Boenning & Scattergood. The print and earlier online version of this misspelled his last name.
Early voting for the May 4 election began April 6, and as residents vote on the fate of an Upper Arlington community center, groups are lining up on both sides.
The “advisory question” for Issue 2 asks simply, “Should the city build a new community center?”
Issue 2 does not seek approval of a tax increase or funding to build the center, but a “yes” vote would give city officials the go-ahead to issue $55 million in bonds to be repaid over 30 years to build a 95,300-square-foot facility as part of the planned redevelopment of the Macy’s building at Kingsdale Shopping Center.
A “no” vote, according to City Manager Steve Schoeny and Upper Arlington City Council, would end the city’s pursuit of a community center as currently proposed at Kingsdale.
A group of local residents who formed the political-action committee Yes for UA Community Center rolled out a website Jan. 21 at yescommunitycenter.com and has been campaigning in support of Issue 2 by distributing yard signs throughout the community.
“We have an opportunity to build a beautiful intergenerational community center at Kingsdale, without any income or property tax increases,” campaign co-chair Catherine Strauss said.
Yes for UA Community Center points to an online survey commissioned by the city in November 2020 in which 74.55% (1,195 respondents) said they would support issuing up to $55 million in bonds to be repaid through existing revenues, without raising any new taxes, in order to build the facility.
According to the survey, 15.03% (241 respondents) said they would oppose the move.
“Our volunteers/team believe the community center is the multigenerational gathering space our city needs after a year of being deprived of social interaction,” said Natalie Boe, campaign coordinator for Yes for UA Community Center. “Even before COVID, it was clear we needed indoor recreation space and an improved senior center, and we couldn’t ask for a more perfect location and opportunity than the one before us now.”
On the other side of the issue is a political-action committee called Arlington Citizens for Truth in Taxation, which opposes the community center project on the grounds that it ultimately will cost residents additional taxes. The group has a website at notoissue2.com.
One of ACTT’s arguments centers around the city’s plan to provide a $17.5-million tax-increment financing deal to Continental Real Estate Cos., which would include the community center as part of development at the Macy’s site. That project also calls for two 7-story buildings that would house 142 assisted-living units, 6,000 square feet of restaurant space, 325 apartments, eight townhouses and a 2-story garage along Northwest Boulevard.
The Upper Arlington Board of Education voted unanimously Dec. 8 in favor of the TIF arrangement that, should the community center project proceed, would enable the developer to pay up to $17.5 million into a TIF fund, rather than pay those property taxes to the school district.
If Issue 2 is voted down, the TIF amount would be for $16.5 million.
About $1.6 million would be taken from the fund annually to pay the construction debt, according to city officials, and additional money from that fund would be used to build the parking garage for the development and for other public infrastructure improvements for the site.
If Issue 2 is passed, the deal means the city would transfer ownership of land at 1945 Ridgeview Road – where the Upper Arlington Senior Center sits – to the district after demolishing the current buildings there and resurfacing the parking lot.
While the district would still receive the $124,000 in annual property taxes it receives from the Macy’s site presently, as well as $50,000 in annual payments from the city, it would not receive the additional $17.5 million in property taxes from the Continental project at Macy’s for 30 years.
In the meantime, Upper Arlington Schools administrators and school board members said March 9 the district will need to pass a new operating levy in 2022.
ACTT said the Continental project, especially if the community center is included, will result in the district seeking more tax money from Upper Arlington property owners.
“Since the school district is the principle funding source for this project, UA property owners can expect multiple periodic property-tax increases from the schools to make up for the lost revenue,” the ACTT said in a four-page document posted on its website.
ACTT also maintains the city’s estimated $54 million cost to build the community center doesn’t include interest on the bond.
“At the city's estimated interest rate of 3.15%, which is below current bond rates, that will cost an additional $21 million in interest payments,” the ACTT release states. “Thus, the actual cost of this community center will approach $75 million when bond interest is included.”
Upper Arlington officials say that is incorrect. A “fact sheet” on the city website, upperarlingtonoh.gov, says ACTT’s statements are misleading because they imply “the city has not been straightforward about the costs for construction.”
“The city’s financial plan for the community center covers all associated debt service, even if the $21 million interest payments number were accurate,” the city website states. “Consistent with the city’s conservative financial budgeting practices, projected interest payments are based on a rate of 3.15%.
“By comparison, in September 2020, the city of Upper Arlington issued debt at a 2.23% interest rate, and several other bond issuances of recent years have secured similarly low interest rates.”
Omar Ganoom, ACTT’s treasurer, is managing director of Boenning & Scattergood, an independent securities, asset management and investment banking firm. He said the 3.15% interest rate was provided by the city but said he believes it’s a low estimate because interest rates have climbed.
“(The city) is misdirecting,” Ganoom said. “There’s been a move in the market and that’s (3.15%) not going to happen. But even with that, we used their number.”
While ACTT says the community center will create more financial strain for the school district that will lead to higher taxes and cites concerns over the costs of interest on the bond to build the facility, Yes on UA Community Center argues the project will enhance recreation and gathering amenities.
“The proposed community center plans include an indoor pool, running track, multiuse gymnasiums, a weight room and exercise facilities, improved senior center, fitness classes, community meeting and event space, and child watch facilities, teen space, and programming for all ages,” Yes on UA Community Center’s website states.
Other sticking points for the two groups and the city include costs for operations.
The city, backed by a CCFTF study, has maintained it will cost $3 million annually to run the facility and those costs can be covered by membership fees.
ACTT said the city’s projections are “rosy,” and noted, according to public information and news articles, that several central Ohio communities supplement the costs of operating their community centers.
Westerville's recreation center, for example, had a 2021 operating budget of approximately $4.15 million, according to Westerville Parks and Recreation director Randy Auler.
Auler said membership fees finance approximately $3.59 million of the total operating costs. The balance is funded by a portion of income taxes dedicated to capital improvement projects and parks facilities, and $557,500 from the city's general fund.
According to the city’s website, it’s expected that 16% of Upper Arlington’s total population will become members of the community. Comparatively, it reported 12% of Dublin’s total population are members at that city’s community, whereas 13% of Westerville’s total population belongs to its community center and 29% of Worthington’s total population are members at the Worthington Center.
For city residents, Upper Arlington’s website states the projected memberships for Upper Arlington’s community center would be $27 for an individual, $46 for a couple, $70 for a family and $20 for a senior citizen.
By comparison, the city listed fees for Westerville ($26, $52, $70, $24), Worthington ($22, $35, $48, $15) and Dublin ($21, $36, $53, $11).
Upper Arlington also intends to rent office space on the community center’s sixth and seventh floors, estimating that $264,512 can be raised annually to help service construction debt for the facility.
ACTT called that a “risky bet” and said “taxpayers will have to make up the difference” if projections don’t play out.
Asked if Yes on UA Community Center has concerns about the office space being leased following the pandemic, Boe said that was a question better directed to the city.
She added, however, “As supporters, we’ve reviewed the plans and feel confident that the city and city council did their due diligence and that the task force, comprised of volunteer residents, went well beyond the industry standard of stress-testing for one year by conducting a five-year ‘downturn’ projection.”