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LIBERTY COMMUNITY AUTHORITY BOARD MEMBERS
The seven board members include a majority of community representatives appointed by Butler County Commissioners.
Ron Porter, board chair, community member and retired former Butler County Transportation Improvement District director
Karen Mueller, community member, and of employee benefits firm HORAN
Phil Morrical III, community member and Realtor
Jim Hartman, community member, and retired
Beau Arnason, developer member, and executive vice president in charge of asset management for Steiner + Associates
Justin Leyda, developer member, and development director for Steiner + Associates
Laura Wedekind, developer member, and president for Steiner + Associates.
ABOUT THE SERIES
The Journal-News is reprising its special series “Following the Money,” which examines how government spending impacts business and job growth.
Last year’s inaugural series included six stories and was recognized by the Ohio Associated Press Media Editors in 2014. It placed second for Best Enterprise Reporting by Ohio newspapers with daily circulation of 25,000 to 74,999.
New stories on this topic will publish every Thursday and Sunday in September. Find all articles online at: www.journal-news.com/projects/following-the-money/
THREE WAYS THIS MATTERS TO YOU
1. YOU'RE PAYING FOR IT. Either as taxpayers or shoppers, locals are helping pay for the cost to build public infrastructure such as parking garages and water lines for the Liberty Center development. The project's developer borrowed approximately $37 million worth of taxpayer-backed bonds from Butler County, Liberty Twp. and Liberty Community Authority to help fund infrastructure.
Once Liberty Center opens in October, shoppers will be charged 0.5 percent on purchases. Those collections will be controlled by Liberty Community Authority to pay its debt and could defray cost of maintenance and operations of certain public infrastructure improvements.
2. NEW GOVERNMENT. The Liberty Community Authority was created in 2013 and is a new local government with special powers to charge a property value and sales assessment on users of Liberty Center. However, its jurisdiction is limited to the boundaries of the mixed-used development. Experts say they're seeing more new community authorities form statewide in response to stretched public and private funding sources as a way to finance the upfront cost of infrastructure, and provide a steady stream of revenues to maintain public roads, sidewalks, parking garages and other infrastructure.
3. BIG DEVELOPMENT. At a total $350 million investment, Liberty Center has been described as one of the largest developments in Butler County history and as a city within a township. Estimates are for the center's retailers, restaurants and other businesses to create approximately 3,500 new jobs by 2018, according to Liberty Twp.
Millions of dollars in fees charged to shoppers at the Liberty Center development will be collected and spent by a relatively unknown, new government agency.
The local government Liberty Community Authority was formed in 2013 at the request of the developer of the $350 million Liberty Center retail and office complex under construction now for an October opening. Butler County Commissioners approved the creation and appointed some board members, according to county government records.
Unlike economic development agencies, new community authorities like the one created for the Liberty Center project can levy property owners in its jurisdiction extra. Unlike other local governments, new community authorities can also charge a special assessment on retail purchases made inside its boundaries on top of the sales tax, according to Caleb Bell, a partner and attorney specializing in public finance for the law firm Bricker & Eckler.
“There is generally a view in the private sector in order to get things done, governmental power is needed especially on larger projects and especially on projects with a lot of infrastructure,” Bell said.
Liberty Center shoppers will pay 50 cents for every $100 spent, and while that doesn’t sound like much, projections are it can add up to over $1.025 million in 2016 and grow every year after. Another more than $587,000 could be collected next year from property assessment collections.
Those funds fall under Liberty Community Authority’s control. And the more successful Liberty Center is, the more money the authority could collect.
Overseeing the construction costs to build Liberty Center's infrastructure is the most important duty of Liberty Community Authority, said Ron Porter, chair of the authority's board. The group is in charge of making sure the approximately $37 million in taxpayer funds invested in the center's public roads, parking garages, sewer system and water lines is spent correctly. For example, an engineer hired by the authority reviews and reports the progress of new construction to ensure it's built using the right processes according to a previously approved plan, Porter said.
“The main emphasis of our group is to ensure that the public funds are being spent and used appropriately for public infrastructure,” Porter said.
“PAY… AS YOU GO”
Liberty Center is a mixed use development consisting of retail, dining, office and residential space under construction now in Liberty Twp. at the crossroads of Liberty Way, Ohio 129 and Interstate 75. The first phase consists of just over 1 million-square-feet.
Estimates are for the center’s retailers, restaurants and other businesses to create approximately 3,500 new jobs by 2018, according to Liberty Twp.
Once Liberty Center opens in October, shoppers at Dillard’s, Dick’s Sporting Goods and other stores will begin paying an additional 0.5 percent or 50 cents more for every $100 bill to be collected by the Liberty Community Authority.
Land owners including co-residential and office developers and retailers that purchase property will pay a 10 mill special assessment on the real property value in addition to their tax bills owed to Butler County government. That’s valued at about 10 cents for every $1,000 worth of assessed property value, according to a report commissioned by Butler County and Liberty Twp. governments and prepared by the firm PGAV Planners of St. Louis, Mo.
“They’re pushing the cost of the infrastructure off on the users over time,” Bell said. “You pay for improvements as you go and not one party pays for all the risk. Long after the parking decks get built, the people who use them are paying for them.”
The two revenue sources are forecast to add up to over $60 million worth of collections between 2016 and 2043, which is the life of bonds borrowed by Liberty Community Authority to pay for building the parking garages and certain public property improvements, according to PGAV’s report.
The money will be used to make payments on Liberty Community’s debt and could also be used to defray maintenance and operational costs of certain public infrastructure, according to the community authority.
All projections depend on actual performance of the center. More or less money could be collected depending on the number of shoppers and property values, according to PGAV.
The Liberty Center project received a total $49 million in funding backed by taxpayer dollars when including a $12 million loan previously approved by Ohio Water Development Authority and $37 million in bonds borrowed by the developer from Butler County, Liberty Twp. and Liberty Community Authority. Master developer Steiner + Associates will pay back Butler County and Liberty Twp. in lieu of paying property taxes.
“The reality for any development — malls or this new kind of mixed-used development where you’re bringing not just retail — is trying to make it more sustainable and not just relying on one aspect such as retail. It really depends on having tenants. The sustainability of the project depends on it being something that’s desirable of the public,” said Butler County Administrator Charlie Young.
HOA ON “STEROIDS”
The law allowing for new community authorities was passed and authorized by Ohio General Assembly in 1972, said Bell of Bricker & Eckler. It was intended for starting a newly developed community on large swaths of land and gave property owners a way to finance infrastructure and land acquisition, Bell said.
Several changes to the law since then mean more developers are putting it to use, he said.
“There’s been a substantial increase in the number of new community authority projects,” he said. “Since 2010, I believe this law has changed five times.”
“The law changes since 2010 have largely been to enable the use of the tool for commercial and mixed-used projects, adding things such as the sales tax charge,” he said.
While Bell is not involved in Liberty Community Authority, he is legal counsel for authorities in other parts of the state. Historically, he said most authorities are geared toward residential use paying for public works such as community parks. He’s also seen authorities exist to provide extra revenue to school districts to offset the impact of a big increase in homes being built in a community.
A commercial heavy development such as Liberty Center establishing authorities is more the exception than the rule, Bell said. Bell said to think of new community authorities as a homeowner’s association with governmental power.
However, another regional mixed use development, Austin Landing in Miami Twp., has also established one, according to Kerry Roe, an accountant specializing in public finance for the firm Clark Schaefer Hackett. The firm is a tenant at Austin Landing and does accounting work for Liberty Community and Austin Landing Community Authority. Roe said these authorities are one more economic development tool on the tool belt.
“A few years ago I wasn’t really aware of any,” Roe said. “It seems like these have become a very necessary tool to do those kinds of developments because it looks like to me, most local governments are only going to be able to finance so much in terms of public improvements and infrastructure.”
The Ohio Auditor’s Office believes Liberty Community Authority makes for the 16th new community authority statewide, said Chief Deputy Auditor Bob Hinkle.
“We have a number of them in Central Ohio and I think we’re just starting to see them branch out in other parts of the state,” Hinkle said.
The auditor’s office is responsible for reviewing the financial books of all 5,800 or so government entities in Ohio including local governments, school districts and port authorities among other political subdivisions, Hinkle said.
But Hinkle is not aware of any statute that requires new community authorities to notify the state of their existence. The state could find out about them when county commissioners approve their creation, or when the funds under their control become large enough, or when someone tells them about it, he said.
Both Hinkle and Bell said oversight of Liberty Community Authority and other community authorities is the same as any government agency: all records are subject to the same sunshine laws, meetings are open to the public and financial statements are subject to state auditor review, for example.
Additionally, Liberty Community Authority consists of a seven-member board including community and developer representatives. Four citizen members including Porter were appointed by Butler County Commissioners.
During an audit, the authority’s organizational structure and controls in place to safeguard assets would be reviewed, Hinkle said.
“A township is a township. There are townships of different size but they’re organized the same way,” Hinkle said.
“When you’re talking about the community authorities, they are different across the board. They’re not always the same, so you can’t just assume because one is doing something in one manner, they’re all doing the same. There’s some discretion in the statute for what they do locally,” he said.
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