CHICAGO — Grandview Heights, Ohio, expects to issue up to $125 million in tax-exempt bonds to finance a series of public infrastructure projects to support a large, privately financed $500 million mixed-use development to be built adjacent to Columbus.
The city last week hired Robert W. Baird & Co. as financial adviser to help craft the tax-exempt piece of the development. Emphasizing the tentative nature of the proposal, Baird public finance managing director David Conley said the transaction would likely be between $100 million to $125 million and that officials plan to enter the market in late 2008 with one or several issues. The city or another local conduit agency would issue the bonds.
Located in Grandview Heights, two miles from Ohio State University and a few miles from downtown Columbus, the $500 million Grandview Yard project includes office, residential, and retail space on an 80-acre site. Current plans call for the construction of 600 residential units and up to two million square feet of commercial retail space, including offices, retail, and restaurants. The groundbreaking is scheduled for early 2009.
The developers, Nationwide Realty Investors, said the project would more than double Grandview Height's income tax base when completed.
The estimated $125 million in tax-exempt financing is separate from the $500 million in private funding the developers will raise for the project. The city has yet to decide whether it will use a competitive or negotiated sale for the deal.
The bonds are expected to finance a series of public infrastructure improvements at the site, which now houses a Big Bear Grocery warehouse. The city would install streets, sidewalks, utilities, including water and sewer, and possibly parking.
Grandview will likely designate the area as a tax increment financing district and use the additional tax revenues generated within the district after the designation to pay debt service, according to Conley.
"We're just getting started," he said. "As financial adviser to the city we're working together with the developer and the city and the schools to review and make recommendations for the potential structure of the financing."
The bonds will most likely be backed by the TIF revenue or another revenue stream that would not require the proposal be put on the ballot.
Conley said he is partnering with Michael DiPerna from Baird's structured finance department to craft the transaction.
The transaction comes as the number of tax-exempt financings has declined somewhat across the state in recent months, according to Conley.
"Like it is across the country with the exception of refundings the market here is a little down in terms of issuance," he said.
