Chevy dealer’s tax break advances

The owner of Chevrolet of Columbus made it clear he wants “Columbus” to stay in the dealership’s name.

That desire took one step forward when Columbus Economic Development Commission members voted 2-1 to recommend that a development site for the dealership in the west-side Columbus Crossing become an economic development target area.

The Tuesday vote came after explanation, debate, questions and public comment about the wisdom of heading down a new path — creating tax abatement opportunities for retail developments in the city.

Commission member George Dutro and commission chairman Dick Lovelace voted to recommend the car dealership’s proposal move forward to the city council. Newly appointed commission member Justin Hohn, named by Mayor Kristen Brown to replace Israel Acosta, who has moved out of Columbus, voted against the recommendation.

Brown said the auto dealership’s request does not even remotely meet the test called for in the state statute about economic development target areas.

“I don’t see development being hindered in that area,” she said, pointing to the new Goodwill store now under construction in Columbus Crossing. “If the city believes it’s undevelopable, that’s a real stretch. They shouldn’t be picking off one lot at a time.”

In addition to commission approval, the economic development target area also must be approved by the Columbus City Council, which also decides tax abatements.

The economic development target area designation is needed under state law before the car dealership’s planned new building could be considered for a tax abatement.

The commission decision is crucial because state statutes exclude retail trade and auto dealerships from tax-abatement eligibility unless the developments are part of an economic development target area, said Carl Malysz, the city’s community development director.

The dealership has been operating out of a temporary location at 3560 National Road, something Chevrolet of Columbus President Leo Portaluppi said he had to persuade Chevrolet to allow him to do when he opened the dealership last year.

Part of his agreement with the automaker is that he will build a franchise-approved Chevrolet dealership, Portaluppi said.

Other options are available outside the Columbus city limits — Taylorsville and Edinburgh were mentioned — at locations that would cost less to develop and had far fewer restrictions than the site at 400 Merchants Mile, where Portaluppi has an option to purchase.

“Columbus is still my number-one choice,” he said. “I want to be here. It’s Chevrolet of Columbus. I want to be in this city.”

The company is proposing a 21,562-square-foot dealership that would be the first new auto dealership development in almost 30 years, the company’s application states.

The dealership would be a $4.2 million investment on about 4 acres of land on Merchants Mile, which would be an additional $2 million. A tax abatement on the development would allow the company to retain 28 full-time employees and four part-timers and expand the ranks to add seven full-time workers and two-part-time employees. Average salaries are listed at $40,000.

After the vote, Portaluppi said the support from the city felt good and the decision was a win-win for everybody.

Convincing the commission

To get to Tuesday’s decision, Portaluppi needed to convince the commission that the Merchants Mile property had impaired values or factors that prevented a normal development or use of the property.

Portaluppi and his attorney, Tim Coriden, talked to the commissioners about Columbus Crossings’ restrictions on development within its boundaries, including the type of building and signage that would be allowed. In addition, neighboring properties have brought up concerns about flooding and the city has considered a moratorium on development in the area until water-drainage issues are resolved.

The economic development target area would apply only to the Chevrolet of Columbus acreage and not to the entire development area, Coriden said.

An apartment development that backed out of locating in the area last year, The Flats of Columbus, was mentioned as another indicator that the land had some impaired value. The land Portaluppi is considering purchasing has been vacant since Menards purchased it and developed its own store, Coriden said.

Hohn said he didn’t see development being prevented by not recommending the area be an economic target area.

When the Columbus Crossing area flooded in 2008, no abatements were available for any of the retail outlets there, he said.

There were strong arguments either way, but his inclination was to put the decision in the hands of elected officials — the city council, Dutro said.

“I don’t want to be the one that doesn’t let this get to an elected official,” he said.

If that is what he felt was necessary, Dutro shouldn’t be serving on the commission, the mayor said.

The commission’s role is to provide checks and balances to make a ruling, and there is a reason for the commission to do that under state law, she said.

Dutro said he wanted to create an environment in the city of Columbus in which a business owner’s first investment, and every investment thereafter, is made in Columbus.

“Do we want to be the most generous city on tax abatements?” he asked. “Some people have trouble with it. But we’ve done it for 30 years at Woodside because we wanted the investment,” referring to the city’s industrial park.

Hohn argued that advancing the dealership’s chance for a tax abatement was essentially spending $600,000 in taxpayer money that was being forfeited through the abatement.

But Chevrolet of Columbus officials pointed out the property was only generating about $100 a year in taxes, compared to nearly $47,000 in the first year of an abatement. By 2020, the tax would reach $102,760, and it would reach $973,019 for the 10-year window through 2024, the company has calculated.

“Ten years from now, people will thank us,” Dutro said. “We’re not spending any money. No one has to write a check for anything.”

Support also came from a competitor, Robert C. Poynter, who owns the Chrysler, Dodge, Jeep Hyundai dealership in Columbus, which stretches from 3020 to 3040 N. National Road and totals 12.71 acres.

From a competitive standpoint, he asked if Portaluppi’s proposal moved forward that the same opportunity be given to his dealership in the future.

“Sounds like it’s working,” Portaluppi said. “Bob wants to put up a new building.”

Hohn said he isn’t convinced about the need for tax abatements to spur development.

“We have more to offer than that. The criteria here doesn’t seem to past muster,” he said. “I don’t feel the case made rises to the guidelines.”

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The request by Chevrolet of Columbus for a 4-acre parcel in Columbus Crossing to be designated as an economic development target area now moves to the Columbus City Council, which also will consider a tax abatement request for the car dealership. The council’s next meeting is 6 p.m. Tuesday at City Hall.