Butler County officials balk at Liberty Center tax break, development plans

Liberty Center wants to change the face of the $350 million mega mixed use development in Liberty Twp. which angers some. TY GREENLEES / STAFF
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Liberty Center wants to change the face of the $350 million mega mixed use development in Liberty Twp. which angers some. TY GREENLEES / STAFF

Butler County commissioners are concerned mega-mixed use Liberty Center’s future development plans and request to drop property values by $73 million will jeopardize the county’s long-term financial health — and set dangerous precedent.

The commissioners and Liberty Twp. trustees have been working with Liberty Center’s new owners Apollo Global Management for months, trying to work out a deal that would bolster the finances of the center during these bleak retail times. Those talks ended this week with no agreement.

Part of the negotiations included the county offering to pay the center $6.8 million over six years in lieu of Apollo seeking property value reductions. In the midst of the negotiations Liberty Center applied for two value reductions, one of the mandated 2020 reevaluation and a second taking advantage of a new law that allows companies to seek relief based on the negative impacts of the coronavirus pandemic.

Commissioner Don Dixon told the Journal-News Apollo has gone outside the agreement forged with the original developer Steiner + Associates by requesting a huge property value reduction that could save them between $600,000 and $1 million annually. Officials are worried others will follow suit which could jeopardize the tax base.

“There was an agreement going in with Steiner that there was a floor and they would stay there at the minimum valuation and I think once you drop below that you’ve got other people looking at it and saying maybe we ought to do this too, they’re all business people,” Dixon said.

“That was the main objective of trying to find some middle ground, so we could help them and something we could still live with and not recalibrate all of our real estate taxes.”

Any property owner can challenge their values and Chief Deputy Auditor Dawn Mills told the Journal-News they received 773 challenges this year to the new property values that resulted from the mandatory 2020 reassessment. The Butler County Board of Revision — which is an independent board under the county auditor’s office — approved 422 adjustments for a total reduction of $41 million. Liberty Center’s value reduction was $14 million.

The BoR received 20 requests for COVID value adjustments and approved a total decrease of around $16.27 million. Liberty Center received a reduction of $15 million this week to $109 million.

The mega mall was looking for an even bigger break, seeking to reduce their value to $65 million on the retail and parking garage portion of the development but the BoR, comprised of representatives from the county auditor, treasurer and commissioners’ offices said no.

ExploreButler County nixes Liberty Center economic relief

Butler County Development Director David Fehr represents the commissioners on the board and he said a 12% reduction seemed reasonable because they produced an appraisal and evidence that “the center overall experienced about a 12% drop in sales” from January through September 2020, due to the pandemic.

Liberty Center has appealed the 2020 value decision to the state tax appeals board and officials expect them to also challenge the COVID decision.

The county and Liberty Twp. forged a complicated development deal with the original developer Columbus-based Steiner + Associates, that included $49 million in taxpayer-backed bonds and loans that are being repaid through tax increment financing and revenues generated by a number assessments. As part of that deal County Administrator Judi Boyko said the county does have a minimum value guarantee and if the value drops below $192.5 million the owners must pay the county a service fee.

“If the property value goes below and the county does not collect from those specific parcels what it should based on $192.5 million value, then the developer has to make service payments,” Boyko said. “Which would equal what we normally would collect in the TIF.”

She said they won’t know until next year if the guarantee will kick in. The retail portion now stands at $109 million but there are also other parcels involved in the development agreement.

Commissioner T.C. Rogers said another big concern with the property value reduction is it could impact repayment of the infrastructure bonds and loans floated to support the development.

The Liberty Community Authority was formed to serve as a watchdog over the taxpayer investment in the development. The LCA is responsible for maintaining garages and stormwater systems at the center and paying off the debt to build those. It uses several assessments to repay the debt, including a 10-mill assessed value charge levied against the properties on the site, which will be impacted by the value reduction.

There have been some issues with the bond payments in recent years for a variety reasons, necessitating “loans” from the county TIF. According to the latest state audit the LCA owes the county about $1.275 million.

Phil Morrical, who chairs the LCA board, said he is concerned the value reduction will hamper their ability to continue to meet their obligations to repay the $20 million infrastructure bonds and $12 million loan for water and sewer improvements. They are considering refinancing the bonds and restructuring the loan to take advantage of low interest rates. Financial Advisor Andy Brossart said they might be able to save about $600,000 annually.

“It’s not the panacea that everybody thought it might be, it’s going to save some...,” Morrical said. “Any savings at all I think we should do it, but it depends how far we’re going to push the debt back and how much it’s going to cost us long run.”

Dixon said the value reduction isn’t the only problem, Apollo is changing the original face of Liberty Center that was supposed to be a mix of high-end retail, office and residential. He said an anchor store was supposed to be built at the entrance to the center along Liberty Way and now they want to build apartments on the site. He noted there are already hundreds of apartments being built adjacent to the mall site.

Apartments generate property tax but no sales or income tax and residents require more services.

“We bought into a plan, we bought into a concept, we funded the interstate, we funded the road improvements, we funded our part,” Dixon said. “Our job is to see the county taxpayers get the best deal possible and they didn’t buy in for apartments they bought in for Liberty Center as commercial.”

Apollo recently filed two “major modification” applications to the the planned use development with the township, one for a 273-unit apartment building and another for two drive-thru restaurants. The application notes there have been “significant changes in how people shop and where they want to work and live” and the “consensus is clear” they want to live where they can walk to work and other services so this will “position Liberty Center to respond to the shift in demand.”

A third application by Steiner + Associates proposes a dermatology clinic and a “Shake Shack” drive-thru restaurant on an out lot close to Interstate 75.

Dixon said they want Liberty Center to be a success and he believes it can be, but Apollo needs to invest in its own property, “we’re not going to put hard earned tax dollars in a project that was going north and now is going south as far as how it’s going to develop.”

“It still needs to be reimagined, it still needs to be remarketed, it still needs to be what the original concept was,” Dixon said. “And that is revenue producing, jobs, earnings tax, sales tax, unique shopping you can’t get anywhere else.”

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