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Butler County officials nearing deal to help struggling Liberty Center

Liberty Center.jpg
Posted at 10:24 AM, Sep 23, 2021

Butler County officials say they understand Liberty Center is struggling due to the pandemic, and a deal is in the works to possibly amend original agreements to ease the financial strain on the center, but they won’t give away the store.

The county commissioners and Liberty Twp. forged a complicated development deal with the original developer Columbus-based Steiner + Associates, that included $43 million in taxpayer-backed bonds and loans. There have been issues with the bond payments over the past couple years.

Apollo has asked the county to revisit the entire development deal, in light of current economic conditions. The county commissioners and township trustees have said they don’t want the center to fail and are willing to work with the center to prevent that.

Commissioner Don Dixon said they are closer to a deal, but their first responsibility is to the taxpayers, not Liberty Center.

“We’re closer than we were but our job is not to supplement a business venture with tax dollars, that doesn’t make any sense,” Dixon said. “Our responsibility is to the taxpayers. This goes on every day if not COVID through something else when you’re in business. Yeah we’re a lot closer to doing an incentive package than we were, but we’re still a ways off.”

The county did make a big investment in the development but Dixon said “the good news is we have some room to maneuver and as far as the county goes we’re solid. Liberty Center is a business venture, it is not owned by the county taxpayers, if something would happen to Liberty Center it doesn’t mean that Butler County is going the same direction because it’s not.”

While negotiations have been ongoing, Liberty Center’s new owners Apollo Commercial Real Estate Finance Inc. have now asked the county board of revisions to reduce the value of the retail side of the development twice.

The BOR agreed to a $14 million value reduction earlier this month, after it contested the 2020 reevaluation, bringing the value of the retail portion of the development down to $124 million. Apollo is now asking for an additional $60 million reduction, based on a new state law that allows reductions due to the negative impact of the pandemic.

Dillard’s department store, which is owned separately, has also requested a value drop of $3.7 million, due to “sales at the property have declined 32%” the application reads.

“Senate Bill 57 allows for entities like Liberty Center to file complaints (about property values) due to loss of rental income due to COVID,” Mike Gildea, an appraiser with the Butler County Auditor’s Office told the Journal-News.

The non-retail portion of Liberty Center is valued at nearly $116 million, for a total value of $254.4 million, based on the 2020 reassessment, according to Gildea.

The retail properties are part of the University Pointe tax increment financing district, 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.

Lakota Schools Treasurer/CFO Jenni Logan said they will not contest the value reduction request. The schools did not contest the first devaluation request.

“We will not challenge these COVID-related valuation reductions from Liberty Center or Dillard’s,” Logan said. “We understand that these are difficult times for our local businesses and our community and will continue to let the process work through the Butler County Board of Revision.”

Andy Brossart, a financial advisor who was one of the architects of the development deal back in 2013, said Lakota won’t be out any money if the value drops again because of the minimum service payment agreement. The county is also guaranteed an annual $2 million payment if the value drops too low.

Another interested party in the Liberty Center financing landscape is the Liberty Community Authority, which was formed to serve as a watchdog over taxpayer dollars used to help develop Liberty Center. The LCA is responsible for maintaining garages and storm water systems at the center and paying off the debt incurred to build those. To do so, 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.

Principle and interest for the main bonds is around $1.4 million annually — backed by the center — and there is an $800,000 Ohio Water Development Authority (OWDA) loan. A recent LCA finance report stated facility charge collections for the year are $326,216 as of June, which is $126,996 or 64% higher than the same time last year and 1% more than in 2019. Revenues from the 10-mill charge were not available. The county TIF has been used to makeup shortfalls.

The LCA finance committee and Brossart have been working on a plan to refinance the LCA bonds to make the payments more manageable. Brossart met with the Butler County Port Authority — that entity handled the bonds for the development — this week to alert them to a possible refinancing of the LCA and Liberty Twp. bonds.

LCA Chairman Phil Morrical said it is difficult to work out a refinancing plan when Apollo has been changing the playing the field by requesting property value reductions.

“We need to be appraised of what the developers are doing, in a timely manner, and what their intentions are,” Morrical said. “Because that affects how we pay our bonds and we can’t have a moving target in my opinion when we’re trying to accomplish this mission of refinancing and the target keeps moving on what we might really need.”

Liberty Center officials have said they cannot comment on any of the ongoing matters.