County loans help pay for infrastructure
Business is booming in Grove City and money from a Franklin County sales-tax increase is helping two more projects sprout there.
Last week, Grove City borrowed $3 million from the Franklin County infrastructure bank, an economic-development tool created with money from a quarter-cent sales-tax increase that county commissioners adopted in 2013. The bank also will fund construction of a coroner’s forensic center and a new jail, projects costing $200 million.
“It’s a very efficient way to borrow,” Mayor Richard “Ike” Stage said of the loans that will help pay for two separate projects expected to bring hundreds of new jobs.
The infrastructure bank was created after the county commissioners increased the sales tax to 7.5 percent in 2013. Of that, Ohio gets 5.75 percent. It provides lowinterest, short-term loans for governments seeking to build or improve infrastructure to retain or bring new jobs. A quarter-cent sales tax increase generates about $59 million annually for Franklin County. The annual budget for the bank since its 2015 birth is $3.5 million. Grove City’s loans are:
■ $2 million to help pay for a $7.5 million fiber-optic system to serve the city, South-Western City schools and nearby Jackson, Pleasant and Prairie townships. It will increase data and download speeds by 10 times and, Stage believes, help attract other businesses while creating 100 new jobs.
■ $1 million to extend sewer and water lines along Stringtown Road so OhioHealth can build an 80,000-square-foot, 26-bed, three-operating-room hospital and a 40,000-square-foot medical office facility. That’s part of a $2.5 million road project — funded by the state, county, city and OhioHealth — to pay for those improvements. The project will bring 300 new OhioHealth jobs, Stage said, and prepare nearby property for future development.
Grove City will pay 1.26
Marble Cliff: water improvements; $125,000 loan; 40 jobs Whitehall: North Hamilton Road improvements; $550,000 loan; 50 jobs
Upper Arlington: fiber network; $1 million loan; 300 jobs
2016
Grandview Heights: Goodale Boulevard improvements, $1 million loan; 247 jobs
2017
Grove City: fiber network; $2 million loan; 100 jobs
Grove City: Stringtown Road improvements; $1 million loan; 150 jobs (another 300 jobs expected when OhioHealth facility opens)
Total:
$5,675,000 in loans; 887 jobs percent interest for each of the 10-year loans. Without the loans, Stage said, the city would have to sell bonds, a more expensive process that would take more time.
“Infrastructure is one of the best things we can do with our tax dollars,” Commissioner Kevin Boyce said.
Grove City opted to use the infrastructure bank to borrow the money, Stage said, because it was so easy to do, it doesn’t count against the city’s capacity to borrow and “it makes money for the county.”
Loan repayments are put back into the infrastructure bank for other governments to borrow for economic-development projects.
It’s not always easy for municipalities, villages or townships to borrow small amounts of $1 million or less, Boyce said, making the infrastructure bank loans attractive to them. Those loans are approved by a seven-member panel and pay for no more than half the cost of a project. That encourages the government seeking the loan to put in its money or get private money, such as from OhioHealth, to help pay for it.
From Franklin County’s perspective, the infrastructure bank provides secure loans — the Grove City loans are backed by the city’s incometax revenue — and helps spur other developments that continue to drive local economies.
It’s the created or retained jobs, though, that are most attractive to Commissioner Marilyn Brown.
“They need the funds to get the project to close. It’s the number of jobs created that makes it work for us,” Brown said.
Since its start in October 2015, county officials say, the infrastructure bank has loaned more than $5.6 million, creating 887 new jobs for six projects.