An unresolved issue involving $300,000 promised to the developer of the downtown Cole apartments by former Columbus officials is taking a step toward resolution.
Columbus Mayor Kristen Brown and other city officials plan a face-to-face meeting next week in Columbus with the attorney for Buckingham Cos.
Brown said the $300,000 was an oral agreement made by former Columbus Redevelopment Commission Executive Director Ed Curtin, former CRC President Tom Vujovich and former CRC and Columbus Downtown Inc. attorney Terry Coriden. Brown indicated during Wednesday’s redevelopment commission meeting that former CDI president John Burnett told her Curtin, Vujovich and Coriden promised Buckingham the money to pay for architectural fees, a key to finalizing the deal.
Two documents signed by CDI members, one in 2009 and the other in 2011, describe a $300,000 payment to Indianapolis-based Buckingham, which is working to finish the $18 million apartment complex at 200 Jackson St. The apartments wrap around the Second Street garage.
The first document said “the City” is to pay the money, although Brown said Burnett explained the intent was for the redevelopment commission to pay with tax-increment financing funds, not with money from the city’s general fund.
The problem is that CDI, the private company created on behalf of the redevelopment commission to make agreements, acquire property and sign leases, has no legal authority to obligate public money to be spent, Brown said. And the redevelopment commission never publicly approved the payment, she added.
Brown said the issue is whether the city is obligated to pay something that was just a promise. The mayor equated it to her hiring a city employee at the maximum salary allowed but promising to get that person $5,000 more. But she has to get approval from the Columbus City Council for the extra money. Brown said the council is not obligated to honor that promise.
“When public officials make commitments that (they) have no authority to do, do we have to honor that commitment?” the mayor said.
Under terms of the first document, the money was due to Buckingham in March 2011, when Fred Armstrong was still mayor.
Buckingham told the mayor it was “shocked and disappointed in Columbus” when the payment wasn’t made, she said Thursday.
Brown questioned why this issue was left unresolved before she took office if the payment was such a priority.
“Why didn’t the previous administration pay this amount?” Brown said.
In ongoing discussions with Buckingham, the company has maintained its stance that it wants to be paid the money, Brown said.
“Their position is that an obligation was made to them, and it’s not their responsibility to make sure the redevelopment commission properly approved it,” Brown said.
Buckingham also said it already has made a concession by agreeing to recoup that money by withholding payments for the 200 parking spaces it is leasing.
The problem with agreeing to that, Brown said, is it can affect the operational budget of the garage.
The 2011 document signed by CDI said a lease rate would be negotiated and would not exceed $50 per parking space per month. For 200 parking spaces, that could equate to $120,000 per year. Recouping the $300,000 by withholding parking lease payments would be like not paying for the spaces for two-and-a-half years, Brown said.
“If that parking garage goes into the red, we can’t use TIF money to fund operations,” Brown said. The only way to fund the garage if it was operating at a loss, she added, would be to use money from the city’s general fund.
An option would be negotiate a lower amount recouped each month over an extended period of time, Brown said.
Frank Jerome, a member of the redevelopment commission and the Columbus City Council, said he opposes giving Buckingham “a nickel.”
“I don’t think they have done right by us,” he said.
Buckingham received the land for free, along with tax and bond incentives to develop the apartments.
“It is as unpalatable to me as it is to you,” Brown said to Jerome at the meeting.
Brown said she wants to do the right thing because she takes seriously her responsibility of helping the public understand how their “precious dollars” are spent.
Stan Gamso, attorney for the redevelopment commission and CDI, said at Wednesday’s meeting that “the courtroom is not a good place to resolve this.” He added that Buckingham likes Columbus and wants to do more developments here.
And a working relationship is needed because of Buckingham’s use of the garage, Brown said.
That’s why both sides will have a face-to-face discussion.
Brown, Gamso, Columbus Redevelopment Commission Executive Director Heather Pope and possibly Jerome will participate in the meeting, the mayor said.
“The bottom line on the meeting is to understand what Buckingham will accept so I can bring it back to the commission for consideration,” Brown said.
Columbus Redevelopment Commission discusses the need for housing as part of downtown revitalization.
July 6, 2009
Columbus Redevelopment Commission creates a tax-increment financing district for The Cole site called the South Commons Residential Block Development Allocation Area.
Sept. 2, 2009
John Burnett, on behalf of Columbus Downtown Inc., signs agreement that says the city will pay Buckingham Cos. $300,000 no later than 18 months after date of the agreement.
July 20, 2010
The Columbus City Council approves a $2.5 million Taxable Economic Development Revenue Bond to support construction of The Cole.
March 2, 2011
18-month mark passes. CDI has not paid the $300,000, but Buckingham has not asked for it.
Sept. 23, 2011
Ann DeVore, on behalf of CDI, signs agreement with Buckingham that allows the developer to withhold monthly parking payments, not to exceed $50 per space per month, if it has not been paid the $300,000. It’s unclear why the amount changed.
Jan. 1, 2012
Kristen Brown takes over as Columbus mayor and begins efforts to gain control of CDI, transfer its assets and leases to the public Columbus Redevelopment Commission, and dissolve CDI.
Attorney for Columbus Redevelopment Commission advises CRC members and Mayor Kristen Brown not to pay the $300,000 because of legal questions. Brown vows the city will not pay it.
Mayor Kristen Brown says city officials will meet with Buckingham’s attorney next week to try to resolve the $300,000 issue.