Gahanna officials review 141,000‑square‑foot speculative industrial project, hear tax‑abatement details and job guarantee

Gahanna officials on June 23 heard details from the development team behind a proposed speculative industrial building and discussed a requested 80% tax abatement for 12 years to make the project financially feasible.

The project team said the building would be roughly 140,000–141,000 square feet with estimated hard construction costs of about $13.5 million and a minimum guarantee of 37 new jobs. “We’re underwriting upper $9 a foot,” said Jonathan Postweiler, development representative with KBC Advisors, adding that without the abatement the pro forma rents would fall below levels required by the project’s capital partners.

The city’s economic development presenter said the request would still yield a roughly 69% return on investment to the community when jobs and tax revenues are counted, and that the city’s foregone inside‑millage revenue—about $300,000—would be offset by roughly $600,000 in income tax receipts over the abatement period.

Council members asked for details about site constraints and title history. Postweiler said the site lost about 1.7 acres of usable land to a storm sanitary easement (reducing a roughly 10‑acre site to about 8.3 usable acres), and that topography, stored fill and an ephemeral stream increase development costs. He said market comparables and leasing analyses from the project broker indicate demand for 100,000–150,000 square‑foot industrial product in the area.

Council members pressed on financial and legal protections. A council member asked about the possibility of a “drop and swap” sale structure that could limit the county’s ability to capture transfer value; city counsel and project legal counsel responded that the practice is not planned for this transaction and that the transaction would be reported on the conveyance form (referred to in the meeting as DTE Form 24) so county conveyance fees and market value resets would be recorded.

On liability for the income‑tax guarantee, project counsel said the owner entity that holds the property will be contractually obligated to meet the guarantee; if the owner later sells, assignment language in the abatement agreement is structured so a future owner would remain contractually liable and the city could pursue breach‑of‑contract remedies.

Council and staff agreed to remove an emergency clause from the legislation amending the proposal; city staff said that amendment will be prepared and the item is scheduled for the regular council agenda on July 7.

The discussion included a range of operational questions—typical lease lengths (7–10 years with common renewal options), possible tenant types (advanced manufacturing, food processing, logistics), and design features intended to maximize re‑leasability—along with market risk notes that the project is speculative because no tenant is under contract yet. The development team said the building is intended as a flexible, “Swiss army knife” industrial facility to reduce the risk of long vacancy if tenants change.

No formal council vote or final approval occurred during the committee meeting; staff will return the amended legislation for the regular agenda.