The Warren County Port Authority is taking ownership of property in an incentive deal for the developer of the proposed redevelopment of Lebanon’s former city garage into apartments, condominiums, restaurants and bars.
As a result, North Broadway Apartments, a company set up by developer Jim Cohen, figures to save more than $400,000 in sales tax on materials used in construction of 18 town homes, 84 apartments and 12,500 square feet of commercial retail space next to Berry Middle School in Lebanon.
“Everything is important to a project like this. That’s just one piece of the puzzle,” Cohen said.
On Friday, Cohen said he was still working on leases with retail tenants and acquisition of more land for the 511 No. Broadway project, envisioned as a key development extending downtown Lebanon.
The city has agreed to develop a park on school property along Broadway, in front of the old school, as part of the deal. The road will be narrowed to make way for on-street parking in the area.
“We will be bidding out these contracts in October,” Lebanon City Manager Scott Brunka said in an email last week.
On Oct. 15, the Lebanon Planning Commission is expected to sign off on rezoning needed for the project, setting the stage for final review by the city council on Oct. 22.
“Right around the end of the year, hopefully we’ll be able to break ground,” Cohen said, estimated construction could take 14 to 18 months.
Two Cities Pizza, based in Mason, is no longer expected to lease space in the development.
Cohen declined to comment on the status of the other two businesses that signed letters of commitment: Cozy’s Cottage, a restaurant near Liberty Center in Butler County, and Casual Pint, a brewpub chain.
“It’s not unusual for the retail tenants to not commit until the project is in the ground,” he said.
Cohen said he was close to a deal with a “real game-changer.”
Other aspects of the deal, including to the sales tax break, are already in place.
511 No. Broadway is just the latest building taken on by the port authority, a board-managed county economic development agency to achieve this incentive.
Last month, the port authority board approved leases enabling Cohen’s company to avoid an estimated $500,000 in state and county sales tax. Subtracting the port authority’s $70,000 fee, the sales tax savings would be about $430,000, assuming a $15 million investment.
According to the leases, the port pays Cohen’s company, North Broadway Apartments, $1 a year; North Broadway Apartments pays $1,000 annually to the port authority.
The city and the Lebanon School District have approved a 15-year property tax abatement agreement for the project.
The council approved the tax break unanimously on Sept. 10.
The school board approved it unanimously in August.
“The Downtown Master Plan accurately details the need for new residential living opportunities in the downtown area, which will naturally help support the local businesses and will help diversify our housing stock,” Brunka said in a letter to the school board.
“The estimated value of this private investment is more than $15 million. Due to the fact that the majority of these units are 1 and 2 bedroom apartments, it is predictable that the development will generate few new students to the school district.”
In the letter, Brunka points out the city property where the project would be built brings no tax revenue to the district.
Cohen’s company and the city are to compensate the school district $30,000 to $80,000 a year for property tax lost through the abatement, according to the agreement approved by the school district.
In addition to an annual payment, the district is to receive additional money on a scale based on how many students from the development attend the district. The city portion of this compensation is to come through an electric rebate.
The school district is to get the full property tax revenue after 15 years.
Cohen is building part of the development on a school-district parking lot near the bus garage. In exchange, he agreed to build a new parking lot for trailers parked in the lot elsewhere on the school property.
“At this time, there is only one developer who has expressed any interest in developing the 511 N. Broadway property. Should this project not move forward due to their inability to make the business plan work, it is likely that the property will continue to sit fallow with virtually no revenue going to the School District for the foreseeable future,” Brunka added in the letter to the school board.
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