The 171 acre Stambaugh property, along with its potential for commercial development and tax revenue, appears to be destined for annexation into Obetz rather than Groveport.
The Stambaugh farm land is shaped like an upside down "L" and sits between Toy and Rohr roads with a northwest section that extends beyond Alum Creek Drive.
The property, which is bordered on three sides by the village of Groveport, is located just to the west of Groveport Commerce Park. It also is near Rickenbacker Airport, which is a major shipping hub. The land is also split into two school districts – Groveport Madison and Hamilton Township.
Both Groveport and Obetz village officials held negotiations with the property owners, The Columbus Regional Airport Authority, in pursuit of the possible annexation with the result being that the owners applied to annex to Obetz.
The sticking point for Groveport not obtaining the annexation appears to involve financial agreements with the participating school districts.
Background – the lay of the land
According to Groveport Village Administrator Jon Crusey, there are two types of Community Reinvestment Area (CRA) tax abatement programs: Pre-1994 and Post-1994.
Under a pre-1994 CRA, the structure is built, the cost of the project is certified, and the owner receives an automatic 15 year, 100 percent tax abatement on real property improvements. Income tax revenues are required to be shared 50-50 with the school district on projects whose total payroll exceeds $1 million. Post-1994 requires the local jurisdiction to negotiate revenue sharing with the affected school district on a project-by-project basis.
Post-1994 requires a written agreement between the legislative authority and the property owner prior to commencement of construction, according to Crusey. The legislative authority cannot formally approve agreement until the board of education approves the agreement.
Board of education approval is not required if it is estimated prior to the agreement that the following will equal or exceed 50 percent of the amount of taxes, as estimated, that would have been charged and payable had the property not been exempted from taxation: taxes on the new structure that will not be exempted; taxes on new tangible personal property; cash payments by the owner of the structure and any payment by the legislative authority (income tax sharing).
"This puts the school districts in charge," said Crusey. "If you cannot reach an agreement with the school district they can hold out and demand 50 percent of the property tax revenue that they would have received had the property not been exempted from taxation."
Crusey noted Pre-1994 CRA’s can be amended twice. After that they become subject to the restrictions for post-1994 CRA’s.
"The Stambaugh property would have been located in a post-1994 CRA because all of the adjoining CRA’s had already been amended twice," said Crusey. "A new CRA would have been created to avoid the existing CRA’s from being under the restrictions of the post-1994 guidelines."
"The Columbus Regional Airport Authority (CRAA) had indicated that they want this development to act as a pre-1994 CRA (even though it would be a post-1994 CRA)," continued Crusey. "CRAA wanted communities to reach an agreement with the school district on the front end that would assure CRAA a 100 percent, 15-year abatement for the Stambaugh property. CRAA indicated that they would not make payments to the school districts as part of the CRA abatements and that all required payments to the school districts would be made by the local jurisdiction."
Groveport viewpoint
The village of Groveport and Groveport Madison schools have an existing agreement to share income tax revenue, which involves sharing 50 percent of all income tax revenue for projects with more that $1 million in payroll. This agreement has provided Groveport Madison schools with more than $3.6 million in income tax revenue since 1999.
Crusey noted the village and Groveport Madison have a preliminary agreement to continue the income tax revenue sharing.
Groveport Madison Superintendent Scott McKenzie sent a letter to the CRAA setting forth the preliminary agreement. However, the Stambaugh property is located in both the Groveport Madison and the Hamilton Township school districts.
"Therefore, the village of Groveport also had to negotiate with the Hamilton Local School District," said Crusey. "We left messages for Hamilton Township Superintendent Chris Lester and stopped by the district offices to speak with the superintendent…phone messages were not returned and/or the superintendent was not available. Finally, (Groveport Economic Development Director) Jeff Green and I went to district offices and waited in the lobby until the superintendent was available. He indicated that Hamilton Township was not interested in sharing 50 percent of the income tax revenue and that the district would accept nothing less than what was mandated by the Ohio Revised Code (which is 50 percent of the what the district would have received had the property not been abated)."
Crusey stated that, based upon the Groveport’s financial analysis of the development of the Stambaugh property, it was not economically feasible to reimburse both school districts 50 percent of the tax revenue that they would have received had the property not been abated.
"There would not be sufficient income tax revenue from the project to support such payments. Approximately 80 percent of the square footage being developed on the Stambaugh property was located in the Groveport Madison school district (20 percent in the Hamilton district)," said Crusey. "From a financial analysis standpoint, it would be feasible to pay Hamilton Local 50 percent of their foregone property tax revenue if an alternate revenue sharing agreement could be reached with Groveport Madison. It was literally during our conversation with Groveport Madison Superintendent Scott McKenzie that a rep from the CRAA called to inform Groveport that a commitment letter had been received from the village of Obetz and the CRAA would be annexing the Stambaugh property to Obetz."
In a letter to the CRAA dated June 6, Obetz Mayor Rod Davisson indicates his village is "prepared to take all necessary action to confer 15 year, 100 percent CRA tax exemption on all industrial structures (on the Stambaugh property)." Davisson notes that, it is Obetz’ understanding that, once acquired by the CRAA, the land will be exempt from real property taxes until it’s developed and that the CRAA "is agreeable to making a compensation payment to the affected school district in the amount of the existing school real property taxes" and that the CRAA "will not be required to make any other school district compensation payments. Additional school district compensation, if any, will be negotiated between (Obetz) and the affected school district."
Davisson notes Groveport Madison had provided written confirmation that "it will consent to a 15 year, 100 percent real property tax exemption…"
Next steps for Groveport
The potential loss of the Stambaugh property has Groveport exploring other areas for future development.
"There is currently limited land available for annexation due to the restrictions of the village’s sewer service agreement with the city of Columbus," noted Crusey. "From a development standpoint – Duke has plans for a 900,000 plus square foot building on their site south of the Toys ‘R Us facility. OPUS is constructing its first of several buildings on the Kurtz Brothers property (100 acres) and there are plans for a 1 million square foot facility at the Air East Business Park. The Hartman property at Groveport/Saltzgaber is also for sale and would make a nice development site – it is also zoned industrial."
Crusey added Groveport has been discussing with Columbus the development of what is referred to as "Area C" in the sewer service agreement between Columbus and Groveport, an area generally located east of Pontius Road and south of Rohr Road. The sewer agreement requires the Groveport to get prior approval from Columbus and show ability to serve for development in this area.
"Our goal is to reach an agreement that would open up a large area for development rather than having to go to Columbus for approval for each separate development," said Crusey.
Another area of potential commercial development for Groveport is the Schottenstein property located at Pontius and Rohr roads.
"Village finances are very strong and continue to outpace revenue predictions. I would not say that the development of the Schottenstein property is suddenly more important," said Crusey. "Land use decisions by the Planning and Zoning Commission and council will continue to be made in the best interest of the community and in conformance with the comprehensive plan."
Regarding the potential loss of income tax revenue and jobs from the Stambaugh property, Crusey added, "It is very difficult to predict – it obviously depends on the number of employees and the wages being paid. There are several very large buildings in the industrial area that don’t necessarily employee a lot of people and some smaller buildings that have a relatively large number of employees. It depends on the type of business occupying the structure."
Groveport Madison, Obetz,
Hamilton Township viewpoints
McKenzie said it is his understanding that most of the 171 acre proposed Stambaugh annexation lies within the Groveport Madison Schools’ boundaries.
"It is my hope that we will begin to negotiate with officials from the village of Obetz in the near future," said McKenzie regarding a potential financial agreement. "Currently, we have not received an official offer from them. I do, however, think that we may receive something from the village of Obetz very soon."
Obetz Mayor Rod Davisson and Hamilton Township Schools Superintendent Chris Lester could not be reached for comment.
