Columbus council turns down special district for downtown project

Columbus City Council was asked last night to make changes to a special taxing district, to allow the city to be fully repaid for its investment in the Rubicon development at 11th and Washington Streets.

But council members balked at the plan, citing concerns about creating a special tax increment financing district for a single location project, concerns over the effect on property taxpayers and whether the council was made aware of the need for such a change before approving the loan.

Without the change, the city could have to go back to the developer to renegotiate the loan repayment plan, according to financial and legal advisors to the redevelopment department. And that could endanger the project.

Last year the city approved a forgivable $6.4 million loan to Rubicon Investment Group of Bloomington. The company is planning to build a $30.9 million project with a five-story building including a parking garage, commercial space and 120 housing units on the corner property. The goal was for the city to essentially be repaid by capturing the property taxes at the new property over 21 years, with the funds going back to the redevelopment department.

However, the existing redevelopment district  that covers the area is set to expire in 10 years, meaning the developer would only pay back $2.4 million to the district before the district disbands.

The city’s redevelopment commission asked the city council to split off the development area from the larger central Columbus tax increment financing district. The proposed new development district would last for 25 years, allowing the redevelopment commission to recoup the entire loan amount.

Without the change, instead of repaying the redevelopment department fund, after the larger district expires the incoming tax money would instead flow to all the area taxing units, such as the city, county, schools and library.

Columbus City Council voted 5-4 to deny the change. Council members Chris Bartels, Elaine Hilber, Jerone Wood, Jay Foyst and Grace Kestler voted in the majority to deny the project. Council President Frank Miller pointed out that because of ongoing litigation over the legality of Foyst’s serving on the council, that his vote could not be the deciding vote. However, on a 4-4 tie, the proposed resolution would still be considered denied.

Rubicon project rendering courtesy of developer via City of Columbus Redevelopment Department.