Hillsboro City Council passes ordinance for Marriott Hotel financing; developer provides update on progress

Hillsboro City Council members approved the latest legislation for tax increment financing for the long-planned Marriott Hotel project — now authorizing the issuing of bonds — and heard an update from several individuals working on the project, including one of the developers, Thursday, May 15.

Marriott Hotel developers Ankur and Nick Patel and the city’s bond counsel Richard Spoor attended the meeting and spoke in lieu of a safety and service director’s report. Spoor provided background on the latest legislation for the development, and Ankur Patel discussed their hopes to break ground sometime this year. Highland County Economic Development Director Julie Bolender was also on hand to discuss financing from the county and state perspectives.        

As previously reported, both Hillsboro City Council and Hillsboro City Schools agreed in October 2019 to establish a tax increment financing [TIF] district for the proposed multimillion-dollar hotel project in the city of Hillsboro, near the state Route 73/Harry Sauner Road intersection. At the time of that approval, Spoor said that it would offset the cost of infrastructure, then estimated at $3 million.

An ordinance approved by the city in 2019 declared a five-acre tract at 1308 North West Street (state Route 73) “to be exempt from real property taxation” and “requiring annual statutory service payments in lieu of taxes.” The ordinance also created the TIF fund for “the deposit of the balance of such statutory service payments.”

The Hillsboro Finance Committee revisited the legislation in July 2024 and in a split decision voted to deny a request from hotel developers to extend the length and amount of the TIF agreement.
Council voted 7-0 Thursday to suspend the three-reading rule and to approve and adopt an ordinance providing for the issuance and sale of not to exceed $3 million of special obligation development revenue bonds, series 2025 (Leo Capital/Hillsboro project), of the City of Hillsboro under Chapter 5709 of the Ohio Revised Code for the purpose of paying the cost of certain public improvements; authorizing a pledge of and lien on certain service payments to secure such bonds; authorizing the execution and delivery of a trust agreement to secure such bonds; and authorizing and approving related matters and declaring an emergency.

“These are TIF funds and the proceeds of the bonds to do the public infrastructure necessary for the development,” Spoor said. “Some of you were involved with this when it began back in 2019 and 2020. That's when we laid the groundwork for the TIF and negotiated the deal with [Hillsboro City Schools].

“A lot of the basic work has happened, at least the legal work, but as we all know, circumstances dictated a delay in most things, including this project, but thankfully, it's coming to fruition.”

Both the ordinance itself and Spoor, in his comments to council, emphasized that the bond ordinance is not a financial commitment from the city’s general fund.

“The bond issue is pretty straightforward in the sense that it's not paid for from any city funds, so no monies of the city are being used to pay the debt service of the bond,” Spoor said. “The bonds are paid from the TIF revenues.

“In a nutshell, the new taxes produced by the improvements to the property, those new taxes are earmarked to pay for the infrastructure. They basically pay the principal members on the bonds are being used to pay for the infrastructure. Once those bonds are paid off, the TIF goes away and it returns to the normal tax receipts, but again, it's important to note there's no city money involved, even contingently. So, if there's a default for any reason or slow payment of the TIF money, there's no looking to the city for the payment.”

Julie Bolender also addressed council about the importance of passing this piece of legislation in order for developers to utilize previously earmarked grant funding.

“As you know, there are state and county grants, and the state has been making extensions, and they are asking that there be action,” Spoor said. “One of them would be a request to adopt this as an emergency under the suspension of the rules, if that's your pleasure, because that would then make it effective tonight, and that will help [Bolender].”

As previously reported, Bolender announced in July 2022 that the county was awarded a $500,000 Community Development Block Grant that will, in turn, be loaned to developers of the Marriott Hotel. The county commissioners voted in October 2023 to approve an open-end mortgage, cognovit promissory note and loan agreement contract with Leo Capital Investment LLC in the amount of $1 million for the project.

“The city has their investment, of course, with the TIF bond,” Bolender said. “The county also has an investment in this project, and that is through the revolving loan fund that the county operates. We received a Community Development Block Grant. We combined those funds with the county’s revolving loan fund and created a loan for Mr. Patel.

“While the two don't have anything to do with each other, by passing this as an emergency this evening, this allows Mr. Patel to move forward with construction. The Community Development Block Grant and the county's revolving loan fund does have some restrictions on time, and this project, as we know, has gone on several years. We are at the point where we have to meet certain benchmarks to continue allowing this loan to be bound. So by approving this this evening in an emergency, if you will, that allows them to continue and stay on track meeting their benchmarks for the county and the state Department of Development.”

Developer Ankur Patel of Leo Capital Investments told council that the pandemic and other factors “derailed our project” but that it is back on track now.

“Costs went up, and interest rates doubled in 2022 and we had financing that was lined up, and then we had a whole presidential election where bankers held us off until they’d see where the economy was headed,” Patel said. “Now, even through that, we've dealt with tariffs and things like that, but things are finally settling down, so we've been working really hard with our lenders, and I've been in communication with Julie and Mr. Spoor on how to arrange financing, which is not a traditional, conventional financing.

“It involves a TIF bond, which is going to put a lien onto our property, so there's only a select bucket of lenders that would actually approve this deal when there's a bond in place as well, because some lenders view it as there's not enough security for them, and we're viewing it as it's an improvement that’s being paid through the taxes that are being generated.”

Patel said they feel there is “finally light at the end of the tunnel, and we have approvals in place,” with council’s legislation Thursday being an important step to move forward.

“Now the next portion is getting the TIF bond to be able to be issued in order for us to get the funding in place, and then our construction lender is ready to go once the TIF bond is ready to go,” he said.

Despite all the difficulties over the past nearly six years of planning, Patel emphasized they “haven’t given up on the project.

“We trust and appreciate the leadership at the city and the county level and the state level,” he said. “We've even pushed politically at the state level, with connections that we've had, to help us get past the process to get the county to approve the grants for the job creations that are going to be coming for the hotel as well.

“It’s the simultaneous work on all fronts that we've been working together on. We’ve been here in the city. We've been dealing with local people here that are going to be helping us with the project. We'll be here, both boots on the ground, ready to go once we have all this stuff lined up, and we want to do a  groundbreaking as soon as possible.”

Council member Greg Maurer asked if they had an “expected date” for construction to begin.

“Based off of the TIF bonds being issued, we're contingent upon that with our construction lenders,” Patel said. “I can't give you an exact date until that's done, but this summer. We don't want to waste another summer that's going by, but we're committed to getting the project off the ground.”

For more from Thursday’s meeting, see the stories at:

https://highlandcountypress.com/news/breaking-hillsboro-mayor-announces…

https://highlandcountypress.com/news/hillsboro-city-council-approves-pr…

https://highlandcountypress.com/education/city-hillsboro-presents-2000-….

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