Portsmouth to form Downtown Redevelopment District

The city of Portsmouth will form a Downtown Redevelopment District (DRD). The Ohio Legislature passed House Bill 233 on April 20, 2016 with an effective date of Aug. 5, 2016 allowing for the creation of a Downtown Redevelopment District which operates similar to a Tax Increment Finance (TIF) District.

Over the past several weeks the city administration has had conversations with the Southern Ohio Port Authority (SOPA) Executive Director Jason Kester regarding implementing a DRD in Portsmouth. During those discussions Kester recommended utilizing the services of the Montrose Group to assist the city in creating the DRD. The cost estimate is between $20,000 and $30,000.

The 2016 budget contained $30,000 for personnel services. Since the beginning of the year the expenses include $20,000 for an appraisal for the Marting’s building and the Adelphia building. Currently there is $922.50 of remaining balance in account 101-119-5234.

Portsmouth City Manager Derek Allen says his office intends to enter into a contract with the Montrose Group LLC to create a Downtown Redevelopment District and is requesting City Council appropriate an additional $40,000 to the account. The Montrose Group plans to provide a DRD economic development plan following their traditional Learn, Listen and Do approach to economic development planning.

HB 233 authorizes municipal corporations to create downtown redevelopment districts and innovation districts for the purposes of promoting the rehabilitation of historic buildings, creating jobs, encouraging economic development in commercial and mixed-use areas, and supporting grants and loans to technology-oriented and other businesses, to specifically extend the charitable use property tax exemption to certain museum property that is open to the public and that belongs to a public or charitable organization, and to authorize collections of a special lodging tax that may be levied by certain counties to be used to not only construct, but to acquire or equip, a port authority facility.

“The key purpose of the program is to increase development along Chillicothe and Second streets,” SOPA Director Jason Kester said. “Initially we’re targeting the area around the Yost/Gracie Plum/West End Electric building, and the southern end of Chillicothe near the Shawnee State’s expansion.”

Kester said the DRD can gain revenue from up to a 70 percent property tax exemption and redevelopment charges of all property in the DRD to fund historic and non-historic building rehab, historic district economic development corporation operation, public infrastructure and, if the DRD has 100 gigibit of broadband services, funding for tech companies.

How does it help the community?

“It’s an additional funding source for SSU’s expansion into downtown. The district, the current construction, etc., are the first steps in improving the connection between campus and downtown, and will assist with improvements to Third Street between campus and downtown,” Kester said. “In the Second Street district we’re trying to create and additional incentive for private developers to continue to improve and develop that area. It’s all part of the strategic plan for the America’s Best Communities grant, as well as Portsmouth and SSU’s strategic plan.”

The city of Portsmouth is currently in the process of performing a water plant needs analysis as a necessary first step in the process to replace a badly deteriorated water plant with a replacement date of around 2020. Portsmouth City Manager Derek K. Allen said, as a part of the process there is land behind the current water plant that the city will require to have room for a future water plant and a future water distribution building. The water distribution crew currently occupies a condemned building that was the former Naval Reserve building on Charles Street.

The city has partnered with SOPA since they have been working for several years to obtain and reuse/redevelop the former New Boston Coke Plant property. Allen said, through that property it has been vital that the city obtain the property immediately behind the water plant to prevent the plant from being denied the ability to expand the property lines.

The Brownfield Restoration Group has provided the proposal and the cost to conduct the Phase II Environmental Assessment at $98,579.50.

Six steps exist to redevelop historic properties using DRDs including: identifying and/or certifying a historic building; creating a DRD economic development plan; adopting a DRD financial model; developing of a DRD Innovation District; adopting a municipal DRD ordinance following the holding of a public hearing and then filing annual reports to the Ohio Development Services Agency; and negotiating DRD agreements with building owners, school board and other funders. The Southern Ohio Port Authority (SOHPA) has asked the Montrose Group, LLC (Montrose) for a scope of work to provide the City of Portsmouth with a DRD economic development plan.

Reach Frank Lewis at 740-353-3101, ext. 1928, or on Twitter @franklewis.