The Port Authority was named in the lawsuit filed in Butler County Common Pleas Court because it issued $44 million in revenue bonds for the StoryPoint development in 2017, with the Butler County commissioners’ permission. County Administrator Judi Boyko said the county is not in any way liable for the alleged unpaid bill.
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“The Butler County Port Authority is a mechanism to incentivize and stimulate economic projects and growth and development,” she said. “Issuing conduit bonds is one mechanism, however, through that issuance the county has no financial obligation for the developer and or a development project.”
Under Ohio law, port authorities can own, finance, construct and lease real estate including land, buildings and equipment. When a port authority buys or owns property for an expanding business, construction materials and other construction costs are tax-exempt. Also, ports can issue taxable and tax-exempt bonds, offering borrowers longer-term, fixed-rate financing.
Port Authority Executive Director Mike McNamara said the StoryPoint development is on track now after an initial disagreement with the contractor.
“The developers, as I understand it, were disappointed with the original contractor that they hired,” he said. “They are happy with the contractor they have now finishing it and the lawsuit originates with the original contractor over a dispute.”
StoryPoint and Marsh Construction did not respond to requests for comment.
The exterior of the facility at Hamilton-Mason and Gilmore roads appears to be nearly complete. The plan when the commissioners approved the bond issue was to build a 221,632-square-foot senior care facility with 120 independent living units, 42 enhanced/assisted living units and 42 memory care units.
With the port’s financing, StoryPoint was expected to get a sales tax deferment on construction material, an estimated value of $786,491.
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Butler County Development Director David Fehr said it is not unusual for port authorities to be included in disputes like this one.
“We structure all the port authority deals so financially we’re protected and we’re protecting the taxpayer dollars,” he said. “But that being said, (in) large, complex construction projects, it’s not unusual to have disagreements and lawsuits filed between developers, contractors and subcontractors, and sometimes our name is dragged into those problems, but legally we think we have safeguards there to protect us.”
The county guaranteed a healthy fee for helping with the StoryPoint project.
“The Port will receive $175,750 in fees, of which $115,750 will be paid to the county commissioners in order to fully compensate the county for any lost sales tax revenue due to the Port’s sales tax exemption,” McNamara said in 2017. “In addition, the Port will receive $25,000 annually for at least 10 years beginning in 2018 as an annual fee.”
This was the port’s largest bond issuance ever. The bonds for the mega mixed-use Liberty Center development were $37 million. That development has been under the microscope lately after a $350,000 infrastructure bond repayment shortfall was discovered. Steps have been and are being taken to insure that problem doen’t reoccur, officials have said.
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