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Tax district spread, swallowed Downtown


The Columbus Dispatch
July 13, 2008
By By Mark Ferenchik THE COLUMBUS DISPATCH


At first, Columbus leaders simply wanted to make sure they had enough money to pay for some Downtown parking garages.

Last year, they looked at creating a small tax-increment financing district around N. 4th and Elm streets, where one garage was planned. New property taxes generated there would help pay for the garage.

That idea has since blossomed into a 735-acre Downtown district to funnel property taxes to not only parking garages but potentially a host of other public improvements including caps -- platforms for parks, shops and restaurants built over freeways.

The reason the district ended up covering the entire Downtown is simple, city Auditor Hugh J. Dorrian said: "To draw in as much money as we could."

Officials have been working on financing mechanisms for the garages for more than a year. They held no public hearings, although they said they didn't try to hide the plan from the public.

They said they kept Columbus City Council members informed.

Now, the city has its 50th tax-increment financing district, which the council approved Monday. It would first pay for new city-owned garages at S. Front and W. Town streets and at N. 4th and Elm streets.

Dorrian was a key player behind the Downtown TIF district. He said he wanted a way to help pay for the garages that would protect the city's capital budget.

"The bottom line was to build without the city putting any money into them," he said.

The money also can pay for new roads and curbs, parks, trees, sidewalks, lights, trash bins, newspaper racks and public transportation.

"The overall consensus of the community is we need a better Downtown," Columbus Development Director Boyce Safford III said. So the city is using the TIF district to move forward, he said.

Streetcars originally were included, but Mayor Michael B. Coleman's office pulled them as it re-evaluates how to pay for them.

The Downtown district is bounded by the Arena District, I-71, I-70 and the Scioto River. Property taxes generated by new commercial development and rising commercial property values will be funneled to pay for those improvements.

Property within the new district now generates an estimated $42.9 million in taxes a year, the Franklin County auditor's office said.But Dorrian said neither he nor the Development Department could project how much the 30-year TIF district could bring in.

He said that would have been "purely a wild guess" because officials don't know how property values will increase.

A June 5 letter from city Economic Development Manager Gary Guglielmi to the Columbus Board of Education conservatively estimated the value of Downtown property improvements over the life of the district to be $50 million.

Other areas in Columbus show what can be collected in tax-increment financing districts.

The 808.5-acre district at Easton Town Center has generated $20.1 million for public improvements since it started collecting money in 1998, Dorrian said.

And $11.9 million has been collected since 1998 through the 1,049-acre district at Polaris, which is in Columbus but in Delaware County.

Not that the money is going to be flowing quickly Downtown.

"I always tell people, you better be patient," Dorrian said.

The City Council approved the district as an emergency measure so the money can be collected as soon as possible.

Council member Maryellen O'Shaughnessy, who leads the development committee, said it's a good way to pay to fix an aging Downtown infrastructure.

"We have to be prepared," she said.

City officials tried to downplay the effect on agencies that, with the exception of the city school district, will not benefit from the new taxes generated Downtown. Assistant Development Director Mike Stevens said that as Downtown grows, it will boost the area's economy and those agencies will benefit.

Officials at the Alcohol, Drug and Mental Health Board of Franklin County are studying how the agency finances could be affected, spokeswoman Corinne McManus said.

Gregory A. Bell, associate director over finance for the Columbus Zoo and Aquarium, said existing TIFs already cost the zoo about $250,000 a year.