By Rick Palsgrove
The Groveport Madison Board of Education is considering an agreement with a developer that could bring the district $3 million over the next 15 years.
About the development
NorthPoint Development plans to buy 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 at its Sept 28 meeting.
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 proposed agreement
“This will be our first abatement in the Canal Winchester portion of our district,” said Groveport Madison Communications Director Jeff Warner. “We wanted to make sure we’re getting the most we can possibly get for our taxpayers.”
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.
Haire said 54 percent of the east building and 12 percent of the west building are in Groveport Madison. He said for “simplicity and administering” the proposed agreement allocates 66 percent of the east building for Groveport Madison and zero percent of the west building for the district.
NorthPoint proposes to make a payment in lieu of taxes (PILOT) and income tax sharing to allow for the 100 percent, 15 year property tax abatement. The annual PILOT payment for the two buildings would be $250,000 for the two buildings: $130,000 for one building with $52,000 going to Groveport Madison and $78,000 to Canal Winchester Schools; and $120,000 for the second building with $48,000 going to Groveport Madison and $72,000 to Canal Winchester.
The city of Canal Winchester would share 35 percent of the annual generated income tax with the school districts. Groveport Madison would receive zero percent and Canal Winchester Schools 100 percent of the income tax sharing for the west building. For the east building, Groveport Madison would receive 66 percent of the income tax sharing and Canal Winchester Schools 34 percent. The estimated annual income tax sharing with Groveport Madison would be $31,270.
Combined with the PILOT and income tax sharing, the school districts would also receive tax revenues based on the increased value of the land. Groveport Madison would receive $74,297 of that tax revenue annually.
This brings the total estimated annual compensation to Groveport Madison to $205,568. Under this proposal, Groveport Madison would receive approximately $3 million over the 15 years of the tax abatement.
Groveport Madison response
“The reality is the developer could have asked for a 50 percent tax abatement without even speaking to us and we would not have the $3 million at our option,” said Groveport Madison Treasurer Felicia Drummey. “That isn’t what they are asking. They are asking for 100 percent in exchange for $3 million. That speaks for itself and I would be interested in the board supporting that.”
Drummey said the proposal is good for the school district.
“People don’t always look favorably on warehouses, but development is going to happen,” said Drummey. “It’s important to secure this agreement not just for now, but for the future.”
Drummey continued to say that this proposal does not “negate the need to 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.
“I know $3 million sounds like a lot,” said Drummey. “In reality (under the NorthPoint proposal) it is a couple hundred thousand dollars a year for us so we still need the pass our levy. But this proposed agreement with the developer is still an important partnership for us.”
The Groveport Madison Board of Education could vote on the proposal at its Oct. 12 meeting.