Groveport Madison approves development revenue agreement

By Rick Palsgrove
Groveport Editor

The Groveport Madison Board of Education approved an agreement with a developer that will bring the district about $3 million in revenue over the next 15 years.

“Tax abatements are key economic tools local governments use to add jobs and value to their communities,” said Groveport Madison Schools Treasurer Felicia Drummey. “When carefully constructed, they can yield significant value for the school district – without also increasing student enrollment.”

As an additional part of the deal the developer, NorthPoint Development, will also make a one time donation of $25,000 to one of the district’s schools.

“The district does not have a formal ‘Adoptive School Program’ for donations,” said Groveport Madison Communications Director Jeff Warner. “It’s not yet been determined which school will receive the monetary donation, nor what it might be used for.”

About the development
NorthPoint Development plans to develop about 70 acres located at Bixby Road adjacent to U.S. Route 33 in Canal Winchester. The land is split among the Canal Winchester, Groveport Madison, and Eastland-Fairfield school districts and is in a Community Reinvestment Area that allows for property tax abatements on buildings. The developer is seeking a 15 year property tax abatement.

NorthPoint plans to build a 540,000 square foot industrial building and a 528,000 square foot industrial building on the site.

“The buildings will be built on a speculative basis and then offered for lease,” City of Canal Winchester Development Director Lucas Haire told the Groveport Madison Board of Education.

According to information provided by NorthPoint, the buildings will be marketed to distribution/warehouse and manufacturing users. The buildings are expected to generate 350 jobs and an estimated annual payroll of $13.5 million. Haire said the developer has three years to achieve full occupancy for the buildings.

The numbers
Because the land is divided among different school districts, the boundary lines actually split the two proposed buildings.

“When you have parcel lines that split buildings it’s up to the county auditor to determine the square footage in each district and then allocate the taxes accordingly,” said Haire.

Drummey said the agreement is good for Groveport Madison Schools.

“School districts have little control over abatements,” said Drummey. “In fact, had the developer pursued a 50 percent abatement rather than 100 percent abatement, we would have had no say in the approval process – and the $5,230 that we’re currently receiving in property taxes would have been cut in half to $2,615 annually. The current taxable value at current agricultural use value (CAUV) is just a fraction of the market value of the land once developed.”

Drummey said the district currently receives approximately $5,230 in tax revenue from the property.

“However, once it’s developed (with the new abatement in process), the district will receive $74,297 in annual property taxes alone,” said Drummey. “By participating as a partner in the negotiations process, we will also enjoy a share of the city of Canal Winchester’s municipal income tax revenue estimated at $22,335 annually over 15 years. School districts rarely receive income taxes and cities are not obligated to share their income tax with us.”

Additionally, she said, Groveport Madison will receive an annual payment in lieu of taxes (PILOT) payment of $100,000 for 15 years.

“This abatement agreement is a win-win partnership that will generate $196,632 for the school district each year of the abatement, compared to just $5,230 in current taxes on the undeveloped land,” said Drummey.

Drummey said the agreement does not “negate the need for the renewal of our levy next year.”

The district’s most recent operating levy was approved by voters in 2019 and it is set to expire in 2024. The latest the levy renewal could be approved to enable the district to start collecting money in 2025 would be on the November 2024 ballot.

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