In a last ditch effort between the City of Delaware and COhatch to transform the former Delaware Gazette building into co-working space, both parties are in talks to add a third party into the mix — the Delaware County Finance Authority (DCFA).
City Economic Development Director Sean Hughes informed Delaware City Council on Monday (Dec. 11) that after months of working to get a deal squared away with COhatch that would enable the Worthington-based business to operate out of the first floor of the city-owned building at 18 E. William St., it appears talks have reached the point where “we think we can move the project forward.”
Doing so, however, will require more than just the city and COhatch.
“After the last round of negotiations, we were asked to explore some means to really, truly make the pro forma of the project more cost effective or workable in numbers,” Hughes said. “I think this is a point where we either make a go of it or we don’t. I think this is a project that will really help us move Delaware forward and make us a place where innovative companies want to do business.”
To help make the deal a reality for COhatch founder Matthew Davis, Hughes added, city officials have been in talks with Bob Lamb, county economic development director, and the DCFA to look at “opportunities for the city to partner with the Delaware County Finance Authority (formerly the Delaware County Port Authority) to move economic development projects forward with programs they have to offer.“
In his address to council, Davis said he wants to bring COhatch — a business that offers its members co-working space ranging from open desk space to private office space — to Delaware and has been willing to do whatever is necessary to make it happen as long as he can make the economics work.
He added the DCFA, which he referred to as a “great tool,” could be the key to keeping the project alive.
“At the end of the day, if I can’t make this happen through this tool, it probably isn’t going to happen,” he said. “It’s my goal to make this happen.”
City Manager R. Thomas Homan stated he’s a proponent of the deal considering the impact it stands to have on the city.
“We have an opportunity to take the Gazette building and repurpose it for something I think (Matt) has been very successful with in Worthington,” Homan said. “This is an opportunity to bring co-working space, which is becoming more and more popular, into Delaware and address economic development and job creation.”
While details of the proposed lease agreement involving the building are still being ironed out, Davis addressed it with council.
“The way the lease is structured is that it is going to basically allow us to retrofit the building that you own to bring it back to usable purpose, of which I’m paying that full amount,” he said. “I just ask that you help me help you.”
According to Lamb, “The authority’s role in economic development is really to keep Delaware County the premier community in Central Ohio with an unparalleled quality of life for all residents. The COhatch project really fits right into the realm in which the port would like to support projects and see new investment occur within the community.”
He added the DCFA has two tools in particular at its disposal that could help COhatch make the deal work from a financial standpoint.
“The authority has the ability to waive sales tax for construction materials,” Lamb said. “This saves approximately 7 percent for the purpose of construction materials for a project.
“Also, the port authority has the ability to waive prevailing wage requirements for certain projects. This can result in as much as an 18 percent savings for a company,” he added.
As with every deal, if the DCFA were to get involved, it would have a few requirements of its own.
Lamb said as part of the deal, the city would be required to transfer the building to the DCFA, which in turn would lease it back to the city so the city could sublease it to COhatch. Once all the terms are met, the property, after an agreed upon time, would be transferred back to the city.
“While this is the first opportunity the city has had to purpose partner with the authority, these types of arrangements are very common in most urban areas in Ohio,” Homan said. “It’s all intended to try to expedite projects, try to lower the costs of projects, and to deliver them in a more timely manner.”
While several council members voiced their support of using all options available to make the deal happen, council member Lisa Keller expressed concern over a DCFA requirement.
“I just feel less comfortable than I did before,” she said. “The part that makes me very hesitant is transferring the property into the port authority and having them lease it back to us.”
With no definitive contract details available to discuss, council asked city staff, COhatch, and the DCFA to put together a proposed three-party agreement that can be reviewed by council at a later date.
Contact Joshua Keeran at 740-413-0904. Follow him on Twitter @KeeranGazette.