The city’s redevelopment commission has given its final approval on a resolution necessary to help fund a mixed-use development downtown.
The Columbus Redevelopment Commission passed a confirmatory resolution Monday amending the Central Allocation Area to create a new Tax Increment Financing (TIF) district for the project.
This multifamily urban grocer project is estimated to cost about $40 million. The commission has committed to contribute “land, cash and a bond to be valued at some $11.8 million” to the project. 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.
The company has also committed to a guarantee that new property taxes generated from the project “will be a minimum of $500,000 a year for 25 years.” Bruce Donaldson, who is a bond counsel with Barnes & Thornburg, said earlier this year that the new standalone TIF is needed to facilitate that 25-year guarantee, as the Central TIF area is set to expire sometime in the mid-2020s or ‘30s.
The redevelopment commission approved an initial resolution amending the Central allocation area in February. The matter then went to plan commission, which sent it forward to city council with a favorable recommendation. City council, in turn, approved the resolution, and the matter returned to the redevelopment commission for a confirmatory resolution and public hearing on Monday.
Anneliese Williams with Barnes & Thornburg said that the plan is to “extract the specific property for the Flaherty & Collins project and create a separate allocation area for that project.”
The property had previously been part of a larger central TIF district encompassing the downtown all the way to Walesboro. A TIF district allows the city redevelopment commission to siphon off increasing property taxes in an area to fund improvements within that zone, essentially allowing development to pay for itself.
City Councilman Tom Dell, who attended Monday’s meeting virtually, voiced his support for the resolution and said that the project will be “a big asset not only to the downtown, but to the whole city.”
The multifamily urban grocer development will include approximately 200 market rate apartments and a 12,000-15,000 square foot urban grocer facility. There may also be some retail space in the development.
The endeavor 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 partner to the city as well.
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.
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Following adoption of the resolution for the new TIF area, Barnes & Thornburg will help the city with some administrative next steps. These include notifying the Department of Local Government Finance and the county auditor.
Redevelopment Director Heather Pope said that the city has received two appraisals on property intended for this project and is working with Donaldson to prepare an offering sheet.
She also said that part of the site for the project is the former location of Bob’s Car Wash, which is in need of some "environmental remediation." She said that the city is working with the Indiana Department of Environmental Management on appropriate vapor mitigation and a soil management plans as they continue preparing the site for Flaherty & Collins.
“At the same time, Flaherty & Collins continues to work on their final design and are working closely with our environmental firm, August Mack, to make sure that we have all of the environmental issues taken care of," Pope added.
Mayor Jim Lienhoop said in his State of the City address that the city expects construction on the project to begin in early 2022. Andrew Lanam of Stifel Financial Corp., who serves as a financial adviser to the city, said in January that completion of some or all of the units would likely occur in fall of 2023, with people beginning to move in late 2023 with more occurring in 2024.
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