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Council hears 12‑year, 80% CRA abatement request for speculative 141,000‑sq‑ft industrial project; land sale deadline cited
Summary
Economic development staff recommended a 12‑year, 80% CRA tax abatement for a proposed speculative 141,000‑square‑foot flexible industrial building on a 10‑acre parcel near Tech Center Drive; staff said the developer guarantees minimum payroll and jobs and that the land sale must close by July 14.
Economic Development Director Gotke presented a proposed Community Reinvestment Area (CRA) tax abatement and fielded council questions on June 9, recommending a 12‑year abatement at 80% for a speculative industrial development on about 10 acres at the northwest intersection of Science Drive and Tech Center Drive.
The request matters because the city would forgo a portion of property tax revenue for up to 12 years to enable redevelopment of a long‑vacant parcel and to secure a developer willing to build and lease flexible industrial space in Gahanna’s Tech Center area.
“The application passes the but‑for test,” Economic Development Director Gotke said, summarizing staff analysis that the project would not “pencil out” without abatement because of site topography and higher development costs and would require subsidy to achieve market rents. Gotke described the proposed project as roughly 141,000 square feet of flexible industrial space divisible into three units of approximately 30,000–70,000 square feet each on about 10 acres; total project investment was estimated at about $20 million. Gotke said staff recommends a 12‑year abatement at 80%, and that the developer offered a guarantee of minimum payroll and jobs backed by the ownership entity.
Gotke told council the developer projects a minimum of 37 jobs on site and an average on‑site salary “just shy of $56,000.” He said the company offered an income‑tax guarantee so the city and schools would receive a predictable income‑tax return even if tenants did not immediately produce the forecasted payroll. Gotke also said the seller requires the land sale to close by July 14 and that the agreement includes an emergency clause to keep that timeline feasible.
Council members questioned details about past CRA results and comparables, job‑guarantee methodology, the 80% rate (noting Burns & Scallow previously received 70% for a larger job guarantee), whether the developer will request TIF funds (Gotke said they have not requested TIF dollars and do not anticipate doing so), and how the project aligns with the South Gateway/innovation‑district land‑use guidance. Gotke and attorney David Hodge (Underhill & Hodge, representing the applicant) said uses proposed are permitted under current zoning and that the developer—described as a joint venture between KBC (developer) and Velasys (capital partner)—plans to market the space to regional tenants, citing demand for smaller flexible industrial product.
Council members asked for additional materials before making a final decision: an ROI breakdown showing city‑specific fiscal impacts distinct from cumulative community impacts; clarification about whether the developer will request TIF or other city incentives in the future; confirmation about which legal entity will guarantee income‑tax backstops; and comparables that explain why this proposal requests an 80% abatement rate. Several members expressed hesitation about an emergency declaration and about approving an 80% rate when recent precedent used lower percentages. Gotke said staff would provide supplemental materials and that city staff and the developer could present the ordinance for first reading next week while returning to committee for additional review before a final vote.
No formal council vote occurred during the committee discussion; council directed staff to place the item for a first reading on the upcoming agenda and to return with the requested supplemental information for committee review.
