Friday, August 17, 2012

Faceoff

It's been a while since I've written anything in depth about residential development in our community, mostly because there hasn't been much of that for a while. But we're starting to see the developers test the waters, and I'm encouraged that it may mean that the economy - the local economy at least - may be starting to recover.

One real estate trend that's emerging is the interest young families have in nice apartments in great school districts. It makes sense. Even with mortgage interest rates at an all-time low, there's more the potential buyer of a new home has to think about: Have home prices have pretty much bottomed out; is your income secure enough to take on the mortgage payments; do you feel confident that the local school district is in good shape, and will stay that way at least until you decide to sell your house?

If you can't check off all those requirements, it can make a lot of sense to rent a nice apartment for a while. We've seen two such apartment developments in the last year, both by Schottenstein: Hilliard Grand, near the intersection of Hayden Run Rd and Wilcox Rd, and Hilliard Summit, at the corner of Roberts Rd and Alton-Darby Rd. The target market for these apartments includes young families, and they make sure to point out in their advertising that these apartments are in the Hilliard City school district.

Planned Development, the outfit which developed Heritage Lakes, has been working on a project to develop another 400 acres they own on the west side of Alton Darby Rd, just south of Davis Rd. This is significant not only because it is the first sizable single-home development in our community proposed in quite a while, it is also the first one in our school district that is within the boundaries of the Big Darby Accord.

First a little history...

The City of Columbus and the Regional Water/Sewer System

When the construction of a regional water/sewer system was being contemplated many decades ago, it was decided that the City of Columbus would be given exclusive control of the system. This power was subsequently used by every Columbus mayor starting with Jim Rhodes to significantly influence the pattern of development in Central Ohio.

A key component of their strategy was to execute water/sewer services contracts with the suburbs that gave the suburbs the ability to expand, yet preserve 'annexation corridors' between the suburbs which would allow the City of Columbus to continue to grow.

And the City of Columbus made it their policy that they would not extend water/sewer services to any parcel of land which had not been annexed into the City of Columbus or into a suburb, and then only into areas within the suburb's water/sewer expansion areas, as defined in the contract.

School Districts and their Boundaries

School district boundaries are set by the State Board of Education, and for many years it was the policy of the State BoE to move school district boundaries with municipal annexations. As the City of Columbus grew, so did the Columbus City School District. The names can create some confusion, but a school district is a wholly separate political entity from a city, and they don't necessarily share the same borders. But for many years, it was a common practice to keep them aligned.

Then came the 1977 decision by the Federal court in Penick vs. Columbus Board of Education, which declared Columbus schools to be illegally segregated, and ordered the implementation of a busing program to correct it. It turned out to be a disaster.

Rather than leading to better racial integration in Columbus Schools, this decision started a stampede to the suburban school districts - the so-called "White Flight."  Hilliard was one of the destinations. The demand for suburban homes exploded, as did the population of our school district. Meanwhile, the result of the busing order was to make Columbus City Schools less integrated and poorer.

Remember the water contracts?  In many cases, the parcels of land in suburban school districts which were most ready to be developed at the beginning of this migration were those right at the edge of the then-current Columbus City limits, where the water/sewer infrastructure ended. But they were often outside the suburban city's water/sewer service territory. So to keep with Columbus' policy of no-water-without-annexation, these parcels were annexed into the City of Columbus, but remained in the suburban school district. Win for the developers, and win for the homebuyers.

The members of the Columbus School Board were understandably alarmed at this phenomenon. So they petitioned the State School Board to realign the school district boundary with the city boundary, and made some pretty good arguments as to why the State Board should grant their petition, including the fact that Columbus school buildings were emptying out (e.g. Central High School, now COSI) while the taxpayers were being simultaneously burdened with building new suburban schools.

The effect was to immediately dry up the demand for new houses in the suburbs. Those wanting to escape the busing program in Columbus Schools were understandably fearful that they could spend a lot of money on a new house in a suburban school district, and then get shifted back into Columbus Schools anyway.

The developers were outraged with this interference with their booming market. They have great political power in central Ohio - always have. Something had to be worked out, and after a few years of arguing and negotiating, the so-called Win-Win Agreement was finally signed between Columbus City Schools and many, but not all, of the central Ohio suburban school districts. Hilliard City Schools was one of them.

The Win-Win Agreement said, in a nutshell: a) existing homes in the City of Columbus, but a suburban school district would get to remain in the suburban school district; b) any undeveloped land in a suburban school district which is covered by the water/sewer agreement with the suburb would be allowed to stay in the suburban school district as well; but, c) any undeveloped land which is subsequently annexed into the City of Hilliard Columbus would automatically shift to Columbus City Schools.

There are a few developments in our area which fell under that last clause, notably the large parcel north of Hayden Run Rd, between Cosgray Rd and Avery Rd. That land is outside the water/sewer agreement with the City of Hilliard, and so was annexed into Columbus. Simultaneously it ceased being part of Hilliard City Schools, and became part of Columbus City Schools.

A Radical Change: The Big Darby Accord

Then around 2005, the City of Columbus had a dramatic change in policy. They said they were no longer interested in aggressively pushing out their boundaries, mostly because they said it was no longer economically viable for the City to extend police, fire, street maintenance, etc farther and farther out. In particular, they said they would be willing to extend water/sewer services into the townships of the western part of Franklin County, as long as development was done in a manner that preserved the unique ecosystem of the Big Darby watershed.

Whether the City of Columbus is really interested in conservation, or they have another political agenda, we don't know. But this policy drove the development of the Big Darby Accord.

The Big Darby Accord was intended to be a legally binding agreement between the ten jurisdictions which had responsibility for the western part of the county: Columbus, Hilliard, Grove City, Harrisburg, Brown Twp, Norwich Twp, Washington Twp, Pleasant Twp, Prairie Twp, and Franklin County. The agreement would specify not only land use restrictions and development requirements, but would set up a method for making the control of development density economically viable, using what are called Transfer of Development Rights (TDRs).

The idea is that if the overall density of development for the Big Darby Accord area is set to one dwelling for every five acres (which is the current rural residential zoning in Franklin County), and there are 50,000 acres in the Accord territory, then a total of 250,000 dwellings would be the limit. But some parcels of ground could support much higher density, and some much less - and there are some which should be left undeveloped forever.

It's not fair to tell a landowner that suddenly the rules have changed, and that their land can no longer be developed just because there is a wetlands on it, when in years past it has been okay to just fill in those wetlands and build like crazy. A great number of us live on land where exactly that happened.

So the idea of TDRs is that folks who have land which is ecologically acceptable for higher densities - like the 2-4 homes/acre we see in most developments - would have to buy 'development rights' from some other landowner, who in the process would be giving up their development rights. If 100 acres comes with the right to build 20 homes (5 acres/home), then to get the right to build 200 homes, the landowner would have to buy the development rights of another 100 acres. The buyer gets the right to build his 200 homes on 100 acres, but the seller can never develop his land thereafter.

However, the City of Hilliard never really bought into this concept. They said they were on board with the Big Darby Accord, but refused to yield 'home rule' of the land within their water/sewer service territory. I think the issue was that the developers who owned large parcels of land in the Hilliard water/sewer service area were distrustful of the whole TDR concept, and motivated the Mayor to fight against it.

Mayor Schonhardt has seemingly won that battle on behalf of the developers, and the Big Darby Accord never became a binding contract which would control development for the Big Darby Watershed. The Big Darby Accord Advisory Panel became just what its name implies - a body which can advise the City of Hilliard on development applications, but has no power to enforce its recommendations.

... and now Back to Today
This week, the Big Darby Accord Advisory Panel held a hearing on the first big application for development in the Hilliard part of the Big Darby Accord territory, the one called Heritage Preserve.

The application was prepared by John Talentino, the City Planner for the City of Hilliard, and was presented by him to the Advisory Panel. I take this to mean that the City has tacitly approved this plan. Next was a presentation by a representative of the developer.

The primary concern of the Advisory Panel was the development density. Every land use plan that covers that parcel of ground specifies a density of 1 dwelling unit per acre with 50% open space. This means a total of 418 dwellings could be built, but that they would have to be sited on 209 acres or less, leaving at least 209 acres as open space. This open space could be a golf course, a horse pasture, wetlands, woods, etc. The basic plan proposed by the developer is within these parameters, with 387 single family homes.

But there is a problem. The developer proposes 300 apartments be built on the site as well, for a total of 687 dwelling units, or a density of 1.68 dwelling units per acre - way above the density limits.

Why?

Simple - for aesthetic reasons, the City of Hilliard wants the developer to incorporate certain expensive features in the plan, such as an entry street bordering a wooded area along which no homes would be allowed, which will also serve to connect Davis Rd to Scioto-Darby Rd. They also want to realign Alton-Darby Rd so that it can serve as a southern entrance into the development. For these things to be economically feasible to the developer, they need to be able to sell more units, and since apartments are in demand these days, they likely already have someone in the wings ready to buy and operate the apartment buildings when the project is complete.

Advisory Panel Chairman Joe Martin, a respected long time member of our community, and a leader in the land use planning effort for Brown Township, wisely and appropriately cautioned his fellow panel members to recognize that this is not an isolated application, but rather one that will set a precedent for all future applications that will come before them.

As reported in the Dispatch, the Advisory Panel voted 9-0 to reject this application.

Now what?

The City of Hilliard may decide to simply ignore the vote of the advisory panel. The City might even decide that this is the last straw, and withdraw from the Big Darby Accord altogether.

Then the question will be what the City of Columbus will do. After all, they have the ultimate power via their control of the water/sewer system. If they come to the conclusion that there is no capacity to serve this development, that's it. Of course, the developer or the City of Hilliard could take Columbus to court and seek an order for Columbus to provide the water/sewer service. My understanding is that Columbus has typically prevailed in such lawsuits in the past.

I worry that this decision by the Accord Panel - and I absolutely support them in this case - puts the very existence of the Big Darby Accord in jeopardy. It likely depends on how much power the developers and the Hilliard elected officials feel they have relative to the Mayor Coleman and the Columbus City Council.

The City of Hilliard has the next move.

10 comments:

  1. The next Hilliard Planning and Zoning Committee meeting is Sept. 13th. If you want to stop this development, you have to attend this meeting and voice your objections. I believe if this goes before council for a vote, it will be approved; the place to stop it is in zoning, and it will only be stopped if there is a substantial community showing.

    For those of you who live in the City of Hilliard and wonder "why should I care?" please remember it is your property taxes that will have to go up to pay for all these new kids in the School District...

    ReplyDelete
    Replies
    1. Thanks for the note. I agree with you.

      Delete
  2. So do you just know all this stuff, Pablo, as a longtime resident. Or do you have to do research?

    All the win-win stuff predates my time in Ohio, so I didn't know how it came about.

    Thanks for sharing!

    ReplyDelete
    Replies
    1. My kids say history is easy for me because I was alive back then...

      Kinda the same thing here - we had just built our first home - one of the first in Golfview Woods - when the Columbus busing decision happened and the Win-Win battle erupted. Golfview Woods was one of those developments built on land that had always been in Hilliard City Schools (Scioto Darby Local Schools back then), but was annexed into Columbus in order to get water/sewer service.

      Coincidentally, it was a CompuServe colleague named Jim Ebright, who happened to be sitting on the Columbus School Board at the time, who drove their effort to get the the boundaries of Columbus Schools realigned with the newly expanded Columbus city limits.

      Delete
  3. I see where Hilliard City Council voted unanimously to rezone over 400 acres at Alton-Darby and Davis Roads. The new development is to be called Heritage Preserve... and there will be approximately 700 single- and multi-family homes in the development.

    When is development of that parcel set to begin? It could mean well over 500 kids by the time the subdivision(s) are built out.

    ReplyDelete
    Replies
    1. STJ: You are referring to the Planned Development project which was the impetus for this article. The Hilliard City Council did exactly what I expected them to do, which was to largely ignore the Big Darby Advisory Committee and do whatever they wanted.

      Mayor Schonhardt has always claimed that he supports the Big Darby Accord, but he also demanded and was granted 'home rule' for parcel in the Accord territory but annexed into Hilliard.

      He also declined to participate in any of the revenue mechanisms which would have funded the purchase of development rights that would have preserved parcels which were deemed to be environmentally sensitive.

      Here is what I wrote five years ago about the Big Darby Accord and Mayor Schonhardt. I think I pretty much nailed it.

      Using a factor of 0.8 school age kids per single family home, and 0.4 for each apartment, this would work out to 430 kids. At a cost of $12,000/kid, our new cost would be $5.2 million.

      Assuming that the single family homes will have a market value of $250,000, they will generate school tax of about $4,400 each. I'm estimating apartments to generate about 1/4th of that each. That works out to a little over $2 million in new revenue.

      Which leaves $3 million to be subsidized by the rest of the us. Since 1 mill generates about $2.3 million in revenue, the cost of the subsidy will be about 1.3 mills.

      Thank you very much Mr. Mayor. Now please go find a lot more new commercial property tax revenue to offset that.

      Delete
    2. And of course as the home values go down, the millage required goes up. With $200,000 homes, the millage needed to subsidize would be 1.5

      For this development to be self-funding from a school standpoint, the homes would have to be worth something north of $600,000. And that doesn't include the capital cost of new buildings if needed.

      Delete
  4. I was using the multiplier for single family homes (.8), so my estimate was a bit high. I didn't realize the multiplier for apartments was significantly lower (.4).

    I had read that the homes were supposed to run between $250-600K, lower than the self-funding threshhold. I will say that the housing market, including here in Hilliard, does seem to be stabilizing and home values don't seem to be dropping any more, but I agree that this new development is still going to be problematic for the district.

    This is true not only from the funding standpoint, but also from the student housing standpoint. I don't see Brown Elementary absorbing all the new students. Some of those kids might have to be sent elsewhere (Hoffman Trails?).

    ReplyDelete
    Replies
    1. The 0.4 for apartments is my estimate - I don't have anything official.

      We have capacity in the school buildings to absorb this many students, but we'll have to adjust some attendance boundaries. Too bad we didn't build Washington Elementary on land at the intersection of Leppert and Davidson that we still own, or on the Bradley grounds.

      Delete
  5. Yes, I agree that we can absorb the additional students. I think that some amount of redistricting is going to be unavoidable. Might as well include the MS/HS boundaries, too, so that the enrollments at Heritage/Darby and Memorial/Bradley stay balanced.

    ReplyDelete