By Katelyn Sattler
Does growth pay for itself? It depends on who you ask, but Obetz is not taking any chances.
Obetz City Council authorized City Administrator Rod Davisson to enter into a development agreement with the Real Estate Prophets LLC, Greystone LLC, and Pulte Homes of Ohio LLC for their purchase of the former Wilburn farm, tentatively named Buckstone South, to ensure the growth will pay for itself.
The 126 acres east of Lockbourne Road and south of Rathmell Road, minus the 35 acres along Big Walnut Creek, which will be donated to the city for park land, will be been named a Community Reinvestment Area. This is provided that developers aid in creating other financial products for which the single family residences and multi-family structures will be exempt from property taxes for 15 years under a CRA Abatement.
The developers will cooperate with Obetz to facilitate the creation of a public/private partnership, called a New Community Authority for Buckstone South, that covers the CRA abated area to collect the abated tax money to be redirected by the county.
The owners of the single family residences will pay an annual Community Development Charge, an amount equal to the CRA Abatement, plus an annual five mill community development charge to the NCA to be collected by the county.
The owner of the multi-family residences on the Greystone Property during the 15 year CRA Abatement period will pay the Community Development Charge, the five mill charge, and the replacement charge. This negotiated charge is fixed and will increase from $300,000 in the first abatement year to $649,000 on the 15th abatement year. When the abatement period ends, the owner of the multi-family structure will pay property tax and the five mill charge to the county with the five mill charge to be redirected to the NCA.
The development agreement requires Obetz to create an Incentive District Tax Increment Financing (TIF) District which allows Obetz to invest in public infrastructure and other improvements up-front by abating property taxes for single family residences and multi-family structures and having that money to be directed to the New Community Authority.
Obetz will also create at least two 30-year, 100 percent non-school Incentive District Tax Increment Districts, which will collect service payments in lieu of real property taxes from property owners within the area. One will be a commercial Incentive District that covers the multi-family structures and the other will be a residential Incentive District that covers the single family structures. The city of Obetz wants to ensure the schools have enough money for the students.
All of this allows Obetz to issue general obligation bonds against future property values that will increase as the area builds out to pay for public infrastructure, such as roads and utilities, which all need to be in place for the anticipated rate of construction of residential homes and commercial multi-family structures.
The GO bond is like a mortgage with no secured property backing it. It is backed by the full faith and credit of the city of Obetz and is funded by real estate taxes within the CRA.
Once the debt limit is reached within the CRA, Obetz will issue revenue bonds, which will be backed by the NCA charges, taxes, and TIF dollars collected within the CRA and backed by the revenues generated.
The developers expect Buckstone South to be built out over five years.
Obetz Mayor Angela Kirk thinks the city is in a good position.
“The Franklin County market is expecting one million people to move into central Ohio by 2050, so that’s going to take 14,000 houses a year, every year, to keep up with the demand,” said Kirk. “And that was even before the Intel announcement. These processes we have put in place ensure that the new houses fund the cost of the improvements they require without raising the tax bill for any of the existing residents.”
Obetz is negotiating with the school district and Hamilton Township for their share of the total tax dollars to be collected.