The City of Delaware and American Electric Power (AEP), in conjunction with the Olentangy Local School District and Delaware Area Career Center boards of education, entered into a community reinvestment area (CRA) tax abatement and a school compensation agreement during Monday’s City Council meeting.
Under the agreement, AEP will receive a 15-year, 100 percent tax abatement valued at over $3.9 million, but will make yearly payments of $59,704 to the Olentangy Local School District and $2,520 to the Delaware Area Career Center for the next 15 years, a value of $933,370 over the life of the abatement.
The tax abatement is for a new 54,000-square-foot service station to be built on Slack Road, just down the road from the AEP substation that sits on the corner of Liberty and Slack roads.
Economic Development Director Sean Hughes said AEP had outgrown their current service center, located on London Road, and are “in need of building a brand new, state-of-the-art service center with more storage area.”
Liberty Schindel, a senior economic development analyst for AEP, said the current service center was built in the 1960s on only 2.5 acres and hasn’t been updated since 2000. She also pointed out the busyness of the intersection of Liberty and London roads often times being troublesome.
As part of the CRA agreement, AEP is also committing to creating nine new full-time positions, or $456,412 in new payroll, within the first three years of the building’s use. The company will also retain the 24 current full-time positions at the existing service center.
Schindel speculated there would be an additional 24 employees added by year 10, bringing the total number of jobs at the service center to 57.
The salaries of the new positions are expected to average over $50,000 per year, exceeding the low to moderate income (LMI) level of $39,000 per year for a single-person household. The exceeding of LMI is one of the criteria set forth by the city for a CRA.
However, the one criteria not met is the return on investment (ROI) for the city, which is set at 25 percent or greater. The city’s ROI for this project is negative 52.21 percent, but Hughes recommended staying with the 15-year, 100 percent tax abatement “due to the long-standing economic development relationship we have with AEP.”
Hughes went on to say, “On this project, it’s actually one of those instances where we do have a public-private partnership. We’re actually going to be sharing the costs of infrastructure. We’re paying for half the water line to be installed, they’re paying for the other half. They’re paying for the entirety of the sewer line to serve the center, and they’re also paying for all road improvements up to their site from Liberty Road over. So, there’s a considerable infrastructure investment they’re making that we’re actually going to benefit from because it will serve some additional sites along there in the future. It is a great way of leveraging one project for future projects for us.”
Construction of the service center is expected to begin on June 1 and be finished by the end of the year.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @ddavis_gazette.