Columbus’ plan for a multifamily urban grocer development is moving forward, although some plan commission officials have concerns about the project’s viability.
The Columbus Plan Commission approved a resolution Thursday approving the Columbus Redevelopment Commission’s amendments to the Central Economic Development Area. According to a memorandum from city/county planning director Jeff Bergman, the plan is to create a separate TIF district to provide financial support for the development, which is to be located along the south side of Second Street, east of Lafayette Avenue. The matter goes next to the Columbus City Council.
The redevelopment commission has committed to contribute “land, cash and a bond to be valued at some $11.8 million” to the multifamily urban grocer project, which is estimated to cost about $40 million. City officials have said in the past that the development’s property tax dollars will go to repay the bond. The developer, Flaherty & Collins, will pay about 70% of the project cost.
While no commissioners voted against the resolution, some brought up potential concerns about the project. Bergman advised the commission that their role was to decide whether or not the development fits in with the recommendations of the city’s Comprehensive Plan.He added that while it’s typical for the commission to discuss other aspects of the project, those aspects should not affect their vote.
Commissioner Dave Fisher asked if Flaherty & Collins has had any communication with local employers supporting an assumption that 200 is a good number of apartments for the proposed development.
Redevelopment director Heather Pope said she didn’t know if the developer had reached out to any employers. Fisher said he was “very disappointed” by that response.
“Is it wise to make a decision to add all of this housing in this location with remote work unknown, or our largest employer, not knowing what the future holds? … A conversation with employers seems like it would make sense before a commitment to this investment,” said Commissioner Amber Porter.
In regards to occupancy rates, Pope said, “We have no reason to believe that the environment that we’re living in now will not at least go back, in some form, of what it was before.”
Flaherty & Collins is confident that the market will support this development, Pope said, and also expressed her own confidence in its success.
While Fisher said he would support the project, he suggested that redevelopment officials should gather the necessary information to respond to questions that the public will likely have about the project.
“What I think our community doesn’t need right now is for a rah-rah committee to keep championing this with great news on WCSI and banner headlines in The Republic,” he said. “I think you need to get out, boots on the ground, and convince the people that it’s a mistake not to support this opportunity.”
Other topics of discussion included about the city’s contribution to the development and the potential outcome if it were to fail.
Pope compared the city’s contribution to Flaherty & Collins essentially taking out a loan on the project.
“They are ultimately paying back with the property tax dollars,” she said. “… If they fail and are not able to pay the property tax dollars, then the developer steps in and he is obligated to pay that.”
This kind of development is “not uncommon,” she said.
The city has not pledged or obligated other funds aside from the TIF revenues, said Anneliese Williams with Barnes & Thornburg.
“I appreciate the concern ‘What happens five years down the road?’ And I don’t have an answer for you there, but in terms of this city’s exposure from a financial standpoint, you’re in a pretty good position,” Williams said.
City attorney Alan Whitted confirmed that the city would not have any legal liability if the project fails. He said that having the developers commit their property tax payments to pay for the bond is a “good deal for the community.”
Next steps include taking the matter to city council before it returns to the redevelopment commission for a declaratory resolution creating the separate TIF district, Pope said. When the matter goes back to the redevelopment commission, there will be a public hearing.
The project will include approximately 200 market rate apartments and a 12-15,000 square foot urban grocer facility, Pope said. There may also be some retail space in the development.
The multifamily urban grocer development started out as part of a larger joint project. Originally, when the city was considering developers for its hotel conference center project, companies were told that they could get “bonus points” if they brought a multifamily urban grocer to the city as well, Pope said.
For the hotel conference center development, the city chose Sprague Hotel Developers, who partnered with Flaherty & Collins (with the latter company providing the multifamily urban grocer piece).
However, because of the pandemic, the multifamily urban grocer project and the city’s plans for a hotel conference center were later split off into two separate projects, rather than taking place simultaneously.
Sprague Hotel Developers put the hotel conference center project on hold in July of 2020 until the hospitality industry recovers from the impact of the pandemic.
