HEATH-NEWARK-LICKING COUNTY PORT AUTHORITY
FOR IMMEDIATE RELEASE
January 23, 2019
PORT AUTHORITY FINANCING INCENTIVE ADVANCES FOR KOHLíS PROJECT
Creative Financing Transaction Provides Licking County TID with Infrastructure Funding
ETNA, OHIO Ė The Heath-Newark-Licking County Port Authority creative financing package for the Kohlís Project in Etna Township advanced today with the Licking County Transportation Improvement District (TID) reaching an agreement with the Port Authority for use of infrastructure funding. Kohlís is expected to sign on to this component of the state-local incentive package within the next few weeks through the Port Authorityís Potentia Financing program that will then trigger a contribution to transportation infrastructure with the TID.
Before construction began on the CRG development in Etna Township, the developer approached Licking County for support with the infrastructure needs nearby the proposed project. The Kohlís site is located in Etna Township off of State Route 310. Understanding the impact the fulfillment center project would have on the regional economy, the Port Authority originated a creative financing mechanism that helped to both incentivize the Kohlís project but also invest in solving some of the future transportation needs of the surrounding development area. Terms were first reached in November 2016 with the developer and in October 2018 with Kohlís.
Public-private partnerships are at the heart of a great deal of Central Ohio success stories and this is one more example in a big way,Ē said Heath-Newark-Licking County Port Authority President and CEO Rick Platt. ďWe were glad to play a partnership role in advancing the Kohlís investment in Licking County and provide a basis for future transportation infrastructure in Licking County in partnership with the TID.Ē
Hereís how it works: The Port Authority agreed to issue up to $88 million in revenue bonds through its Potentia Financing program for the new Kohlís fulfillment center. Port authority revenue bonds uniquely bring with them a sales tax savings on the building materials used in construction. The capital lease agreed to with Kohlís provides for the conversion of a portion of the savings to be committed by Kohlís to fund public transportation infrastructure costs in the State Route 310 area. A total of $1.6 million of the sales tax savings will be provided to the TID for use toward future transportation infrastructure. The Port Authority Board approved the agreement with Kohlís at its December 2018 meeting. The real estate portion of the transaction between Kohlís and the Port Authority is expected to be completed by mid-February.
The TID is pleased to partner with the Port Authority to help deliver on a promise of transportation infrastructure improvements in the State Route 310 area through this creative financing tool,Ē said Bill Lozier, TID projects director. The Licking County TID Board of Trustees took action today to approve a partnership agreement with the Port Authority.
In general, port authority-issued revenue bonds are nothing new. The Port Authority has involvement with $450 million in various financings since its first one in 2002. Converting the savings into public infrastructure investment, however, is less common. This sales tax conversion mechanism was first known to have been used in Ohio in 2014 with an L Brands project in New Albany concluded by the Heath-Newark-Licking County Port Authority.
We hope to make our Potentia Financing mechanism a regular part of what we doóincentivizing capital investment and job creation while also positively impacting public infrastructure,Ē said Luke Kellett who serves as business development director to lead the Port Authorityís Potentia Financing program.
The Port Authorityís best-known role is that it owns and manages the Central Ohio Aerospace and Technology Center in Heath and is the largest self-sustaining port authority in Ohio. For more information, visit the Port Authorityís website at www.hnlcpa.com.
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