The Columbus Board of Education heard a proposal Tuesday from a high end developer asking for a special deal on a new project.
Alison Holm explains.
Continental Real Estate Companies chair Frank Kass says the Arlington Gateway project at the corner of Lane Avenue and North Star will be an 11-story comples with over 200 high-end apartments, public parking, retail and office space. But he says the $110 million project – in the city of Upper Arlington, but part of the Columbus Schools district – can’t get off the ground without long-term concessions.
The site currently generates $116,000 a year in taxes for the school district. Kass presented a proposal that would give the schools district a fixed annual payment of $422,000 a year for 30 years. He says a third party assessment of the potential tax revenue of the completed complex could be $991,000 a year for the district – but there is no project unless the developer can lower that tax burden.
“At least, there is no project that Continental is doing…[The] property is only three acres. In order to make it work, you need a parking structure. And you need to change the infrastructure, and the sewer and water and all that. Those are dollars that the project can’t afford on it’s own.”
Kass and Continental are asking the district to accept the lower “Payment In Lieu of Taxes” or PILOT payments for 30 years, much longer than most city-granted tax abatements. There would be no adjustment for inflation, new school levies, or rising real estate values. District treasurer Stan Bahorek says his office is recommending the proposal because it represents a guaranteed income significantly higher than what the district is currently receiving. He believes it’s unlikely a better deal will come along anytime soon.
“I was approached probably three years ago by the city of Upper Arlington, for this very site. We never made it to the point of learning what that development would be, but that financing… was …it fell through, they could not figure that out. And even they at that time considered an enhanced TIF of some sort. But that did not progress very far. And that was three years ago.”
Columbus-based Continetal has several properties completed or underway in the region, including hotels in the short North, Easton and near Batelle Memorial, as well as senior residences near Mt. Carmel West and along 315. And they have worked closely with Central Ohio municipalities. Kass says Upper Arlington has agreed to issue $22.5 million in bonds for the Arlington Gateway project. And earlier this week the city of Whitehall completed a deal to buy out a strip mall along South Hamilton Road to provide acess to a $50 million dollar mixed-use development Continental is starting this summer.
Board members were largely positive about the proposal, which they will vote on in two weeks. The decision on whether to accept the limited PILOT payments comes as the cash-strapped district is still facing the prospect of millions dollars in budget cuts. But board member Dominic Paretti believes the deal is worth considering, saying “you can’t spend money you don’t have.”