Columbus is moving forward with its $11.8 million financial contribution to the downtown multifamily urban grocer project.
The Columbus City Council approved the second reading of an ordinance Tuesday authorizing issuance of up to $11 million in bonds for the mixed-use development. Columbus Redevelopment Director Heather Pope said that the Economic Development Commission approved issuing the bonds on Monday.
The council also passed a resolution authorizing the Redevelopment Commission to contribute $2 million from the Central Allocation Area to the project.
According to a memo from Pope, the estimated cost of the mixed use development is some $40 million and the developer will pay about 71% of the cost. The city will fund the balance with a bond.
Pope told city council members that the $2 million is part of the city’s contribution to the project. It will help cover costs associated with bonds and possibly lower the bond amount.
Andrew Lanam with Stifel Financial Corp. explained that selling the bonds may require a debt service reserve fund.
“If we’re able to eliminate the debt service reserve fund, that’ll actually bring the borrowing amount down some,” he said. “And the debt service reserve fund is basically money that’s set aside in the event of a shortfall in payments. And it’s fairly common with a revenue type bond. But that money would come back to the city at the end.”
The developer will receive no more than $11.8 million in cash from the city including bond proceeds, Lanam said.
City officials have said in the past that the development’s property tax dollars will reimburse the city for its contribution. The redevelopment commission has also committed to selling property for the development at minimal cost to the developer.
The multifamily urban grocer development will include approximately 200 market rate apartments and an urban grocer facility at the southeast corner of Lafayette Avenue and Second Street.
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.
