The owners and managers of the $350 million mega mixed-use development have not returned multiple phone calls seeking comment. Steiner + Associates developed the property, but Apollo Commercial Real Estate Finance Inc. now controls the retail operation.
The total investment on the mixed-use Liberty Center project was more than $350 million, paid by public and private sources. The project ended up receiving more than $49 million in funding backed by taxpayer dollars, including a $12 million loan approved by Ohio Water Development Authority. The developer is required to make minimum annual payments of approximately $2 million on the debt, according to the development agreement.
“I’m never going to take a position that is going to affect the repayment, you can take that to the bank. I’m not ever going to take a position that’s going to reduce the payment issues with respect to the bonds that are held and money that is owed,” Butler County Prosecutor Michael Gmoser told the Journal-News.
“Now there may be some adjustments in the taxes based upon the COVID reduction in retail sales and things like that. That might be somebody else’s concern, but as far as the county is concerned I’ll be taking a position that opposes any adjustments. It may happen but I’m not going to be a willing participant.”
The Board of Revisions includes representatives from the county auditor, treasurer and commissioners’ offices. Chief Deputy Auditor Dawn Mills said that board gave Liberty Center a break in 2018 when construction flaws in the Grant and Filmore apartments allowed water and mold to seep in, causing extensive damage.
The board reduced the Grant apartment value from $12.4 million to $9.6 million and the Filmore value from $21.3 million to $16.6 million. Mills said there was a “clear understanding” the property values would return to normal after the structures were fixed so last year the Grant apartment value went up to $12.5 million and the Filmore value increased to $20.3 million.
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 storm water systems at the center and paying off the debt to build those. It uses a facilities charge of one-half of one percent, which the public pays during each transaction at a Liberty Center business. It also uses a 10-mill assessed value charge levied against the properties on the site.
There have been some issues with the bond payments in recent years for a variety reasons, necessitating “loans” from the county tax increment financing district. The LCA hired an advisor to develop a plan to tackle the problem. LCA President Phil Morrical said he isn’t certain how a value reduction, if it is approved, would impact the board’s debt repayments.
“We are aware of the developer’s request for a Board of Revision hearing to reestablish the values for tax purposes,” Morrical said. “We at the LCA are still looking at the impact that could have on our financials and we have our team working on it.”
The properties are part of the University Pointe TIF, so tax revenues to local jurisdictions, other than the Lakota Schools, only totaled $3,725 for this year. Since 2015 Lakota has received $21.3 million from the TIF, and the annual payments would be impacted by a reduction.
Lakota Schools Treasurer/CFO Jenni Logan said the district does not plan to challenge the revision request.
“The economy is just starting to reboot and Butler County has just come through a revaluation process,” Jenni Logan said. “We are hopeful these requests represent a temporary impact to these businesses’ financial health and the future is brighter for all of us.”
Possibly revising the master development agreement will be up to the commissioners and Liberty Twp. trustees.
“They would like to revisit how the agreement was structured, the payments and whatever else is out there, some of the operations issues,” Commissioner Don Dixon said. “We haven’t discussed it as a board, no decisions have been made, but we all want to see it be successful. But we’re going to do what’s best for the taxpayers at the end of the day.”
Commissioner T.C. Rogers told the Journal-News he is not happy with the situation, and while the value reduction is beyond their control, the potential renegotiation of the master development agreement, including the minimum service payments, is up to them.
“For them to ask for reduction, they of course they have every right, but that does not automatically trigger a reduction in their service payments,” Rogers said. “I for one want security.”
Liberty Twp. Trustee Steve Schramm said what Liberty Center is attempting to do is not unusual, and it is happening everywhere because of COVID-19 pandemic and the general brick and mortar retail industry has been declining for a while.
“The reality has struck everybody, the downside is if you do nothing and force them into bankruptcy or push this thing further down the path, then you get nothing,” Schramm said. “I think it’s in everybody’s best interest to play ball on this.”
Trustee Board President Tom Farrell agreed.
“Obviously the pandemic hit us all in different ways and we have to all try to work together to get back normal,” Farrell said. “To do that we need to give a little and take a little and this is one of the areas I believe we need to give a little. I think Liberty Center is on the mend, they’re rebounding and only time will tell.”
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