From left: Hillsboro city council members Claudia Klein, Tracy Aranyos, Ann Morris, Lee Koogler, Rebecca Wilkin and Justin Harsha are pictured reading legislation during Tuesday night’s council meeting. Also pictured is clerk Debbie Sansone (far right). (HCP Photo/Caitlin Forsha)
From left: Hillsboro city council members Claudia Klein, Tracy Aranyos, Ann Morris, Lee Koogler, Rebecca Wilkin and Justin Harsha are pictured reading legislation during Tuesday night’s council meeting. Also pictured is clerk Debbie Sansone (far right). (HCP Photo/Caitlin Forsha)
Hillsboro mayor Drew Hastings presented Hillsboro city council with approximately 50 pages of legislation and definitions on two proposed Downtown Redevelopment Districts within the city – one of which is focused on the renovation of a building owned by the mayor – during Tuesday night’s council meeting.

Council heard the first reading of the ordinance to create an Uptown Downtown Redevelopment District (DRD) and a Stockyard DRD, ahead of a public hearing set for Oct. 20 at 5:30 p.m. in the Hillsboro Municipal Courtroom. Affected property and business owners are encouraged to attend the hearing.


Council did not discuss the proposed legislation, and no action was taken Tuesday.

Hastings told council that when he read Ohio House Bill 233, which authorized the creation of redevelopment districts, he felt as though “they almost had our city in mind in creating this.”

“This legislation produces new revenue where there was none and uses that revenue for a lot of things that the city was previously paying for,” Hastings said. “More importantly, the passage of this new legislation will result in no additional cost to the property owners.”

Hastings told council the ordinance will be “easy [for them] to consider because the state has made it all about opportunity.”

One requirement of the bill is “targeting historic structures for rehabilitation,” Hastings said, before naming one specific structure – Bell’s Opera House – that has been designated for rehabilitation in the proposed Uptown District. Hastings, who purchased the building in 2006, said it was “the structure deemed most beneficial by the most people.”

Hastings said city law director Fred Beery said that he is “confident that it can be a community asset that is free of any conflict.”

“I also have a legal opinion, if anyone wants copies,” Hastings said.

The ordinance proposes creating two districts – the “Uptown DRD” and the “Stockyard DRD” – and “declaring the improvements to real property within the DRDs to be a public purpose; exempting 70 percent of the value of such improvements from real property taxation for a period of 20 years in the Uptown DRD and 15 years in the Stockyard DRD; requiring the owners of parcels for which improvements are declared to be a public purpose to make annual service payments in lieu of taxes during the period of exemption; establishing a municipal DRD fund for the deposit of such service payments; and approving related matters.”

A combined 15 parcels included in the Uptown DRD are owned by city elected officials:

• Mayor Drew Hastings: 11 parcels (109 South High St., 108 Governor Trimble Place, 120 Governor Trimble Place, 135 North High Street, 100 South High Street (two parcels), 104 South High Street, 109 East Main Street, 121 West Beech Street, 107 West Beech Street and an additional South High Street parcel [25-36-001-044.01]); and

• Council member Ann Morris: Four parcels (140, 141, 143, 144 West Main Street).

According to the legislation:

• Instead of paying annual property taxes to the Highland County Treasurer, property owners in either district will make “annual service payments … in the same amount.” Money from these “payments” will be placed in one of “two municipal DRD funds.”

• The Uptown DRD includes most uptown Hillsboro businesses, such as properties in the 100 block of South High Street; the 100 block of North High Street and one property in the 200 block of North High Street; the 100 block of West Main Street; the 100 block of East Main Street; the 100 block of Governor Foraker Place; the 100 block of Governor Trimble Place; and several Beech Street properties.

• The Stockyard DRD includes parcels in the 100 and 200 blocks of West Main Street, three Beech Street parcels, one Railroad Street parcel and 11 parcels on Elm Street.

• The owners of property in either district “may enter into an agreement with the City of Hillsboro to impose a voluntary redevelopment charge on the property to cover all or part of the cost of services, facilities and improvements provided within the district.”

• The purpose of the DRDs is “to promote rehabilitation of historic buildings, create jobs and encourage economic development in commercial and mixed-use commercial and residential areas.”

• The DRD funds will be used for “paying the costs of the public infrastructure improvements … and paying debt service payments on any securities or loans issued to acquire or finance the public infrastructure improvements.” Each fund will also include a loan and grant account, a public infrastructure account and a promotion and enhancement account.

• Each DRD will require the formation of an “operating committee” consisting of “the safety and service director, city auditor, a representative from a local bank, the board president of the Hillsboro Area Economic Development Corporation (HAEDC), the executive director of the Highland County Visitors Bureau and a minimum of two DRD property owner members appointed by the committee.” The committee’s tasks will include making “recommendations to council for the use of” revenues generated by the district; negotiating “rates and terms of grants and loans with owners of historic buildings” in the Uptown DRD; and recommending to council “the rates, terms, job and capital investment requirements of grants and loans to owners of historic buildings” in the DRD.

• Public infrastructure improvements “are made, are to be made or are in the process of being made, by or on behalf of the municipality, that will accommodate additional demands on the existing infrastructure within the Uptown DRD and Stockyard DRD.”

• The law director will be directed to “enter into agreements with owners of real property” in each DRD for “the collection of a voluntary redevelopment charge to cover all or part of the cost of services, facilities and improvements provided within the district.”

Along with the legislation, The Montrose Group, LLC has composed a 35-page DRD plan, which outlines the “economic analysis,” “strategies,” “community assessment” and “economic plan.”

According to the summary by The Montrose Group:

• The “primary goal” of the DRDs is “new capital investment,” while a “secondary, but equally important goal is the creation of jobs in the DRDs.”

• The two DRDs “could produce over $3 million through the investment of projects such as a hotel, a manufacturing facility, second-story residential/office and Bell’s Opera House.”

• The city “needs to look to seek $1 million in Historic Preservation Tax Credits and $500,000 in State Capital Budget Community Project funds for addressing the renovation costs of structures” within the DRDs.

• The city is also advised to create “the Hillsboro Community Investment Fund to invest in businesses that choose to locate and grow in Hillsboro.”

• The DRD plans “should focus on the creation of high-wage jobs through the creation of walkable, high-quality Central Business Districts focused on white collar service, high-tech, arts, entertainment and accommodation jobs.”

• “Strategies” for financing DRD projects include the Community Reinvestment Area program; the state Enterprise Zone program; Special Improvement Districts; the JobsOhio Revitalization Program; Tax Increment Financing; Downtown Community Investment Funds; State of Ohio Capital Budget Community Projects; the Idle Property Tax Abatement Program; Historic Preservation Tax Credits; and Federal New Market Tax Credits.

• The “redevelopment of downtown Hillsboro will be driven by four sources of financing geared toward redeveloping the historic Bell’s Opera House, preparing a site for a downtown Hillsboro hotel and the attraction of high-wage jobs through the creation of the Hillsboro Community Investment Fund.”

• The Stockyard DRD Fund “should be devoted to preparing a site for a downtown Hillsboro hotel that should be a major incentive to recruit a hotel investment.”

• The Uptown DRD is to be geared toward “the renovation of Bell’s Opera House,” including applying for Ohio Historic Preservation Tax Credits “to compliment [sic] Uptown DRD funding” for the structure and “lobby[ing] for state of Ohio Capital Budget Community Project funding for Bell’s Opera House’s building renovations.”

• The “renovation costs for potential historic structures are likely to exceed the funding generated” by the two districts, so “other sources of funding must be gained to ensure historic structures are able to be renovated.”

• The DRDs “could generate hundreds of thousands of dollars on an annual basis for use within the DRD,” and “the new jobs resulting from the DRD will generate tens of thousands of dollars to the City of Hillsboro through new income tax.”

• “In order to encourage development in the DRDs, the primary purpose of the DRDs will be to incentivize developers and building owners to make capital investments in properties within the DRDs. The new property tax generated in the DRDs resulting from new capital investment and the increase in property values will be used to fund grants, loans, public infrastructure and economic development organization funding.”

• The DRDs have “the advantage of offering developers and building owners upfront capital for the rehabilitation of their historic properties,” and said capital “is potentially of greater value to a developer than a Community Reinvestment Area due to the 20-year value of real property tax payments being delivered in year one, in today’s dollars, rather than being delivered over a 20-year period, one year at a time.”

• Bell’s Opera House has been identified as “an economic development magnet.” Hastings “has agreed to divest his interest in Bell’s Opera House to allow the community to focus on redevelopment of that iconic structure.”

• “Bell’s Opera House, which could undergo a $2 million renovation, would generate $20,000 on an annual basis to the DRD and $400,000 over a 20-year term.”

• “Priorities for DRD revenue in [the Uptown DRD] should focus on redevelopment Bell’s Opera House. A conservative estimate for 20 years’ worth of DRD revenue in the Uptown DRD would be $576,651 that could be used for the renovation of Bell’s Opera House. This funding could be supported by a $1 million Ohio Historic Preservation Tax Credit award and $500,000 State of Ohio Capital Budget Community Project Fund award to provide the $2 million in funding needed to renovate this historic structure.”

• For the Stockyard DRD, “priorities for DRD revenues … will focus on a loan for the site development costs to prepare a site for the location of a hotel on the Union Stockyards property.”

• “The Hillsboro Community Investment Fund will focus on providing capital to small business and entrepreneurs and encourage investment and development of underutilized and underused assets in the community, including downtown revitalization.”

• Monies for this fund will be solicited from “banks, foundations and individuals from in and around the community, Highland County, Appalachian Ohio and southwest Ohio,” including asking local banks “to commit a portion of their Community Reinvestment Act (CRA) funding.”

• The Hillsboro Community Investment Fund should include unsecured loans; subordinated loans; convertible debt; royalty finance; and warrants and options.

• “The success of the DRDs in Hillsboro will be dependent upon a multi-pronged strategy that will bring together public and private resources to attract new capital and to create and sustain jobs in the community.”

Council president Lee Koogler said that the ordinance will likely hear its second reading on Oct. 20.

For more on Tuesday night’s meeting, click here.