Tax deal progresses Battery Park project

SANDUSKY — A deal among several entities ensures the forward progress of a long-awaited project to activate an underused waterfront space. During a recent public meeting, Sandusky city commissioners entered into a tax-related agreement with Sandusky Schools and Marous Development Group for work pertaining to Battery Park. Officially known as tax increment financing, it's an economic development tool public entities often use to spur redevelopment for major projects. Before this deal, the parcels under construction were tax-exempt. This means property taxes weren't generated for a local public school or any other jurisdiction, city finance director Michelle Reeder said. But now, because of this deal, it's taxable. When construction breaks ground, at an unknown future date, the arrangement calls for a 30-year tax deal, breaking down like this: • 16.5% of all property taxes on new construction go directly to Sandusky Schools • The remaining 83.5% deposits a fund to support the overall Battery Park project. Officials pegged Battery Park improvements at a total value of $229 million, up from a prior amount of $190 million. Based on the agreement in place, Reeder said Sandusky Schools stands to receive about $1.3 million a year. And if the project's full value comes to fruition, the district would receive $39 million over a 30-year period. When factoring in construction work, the project's estimated to create 675 full-time, or equivalent, employees with 1.4 million in labor hours and an expected $63.2 million in labor dollars, according to a city memo. This translates to 300-plus, full-time-equivalent jobs with $16.3 million in annual wages. This deal "will not only transform underutilized property for the benefit of our entire community but will also create future revenue opportunities that benefit our students, staff and taxpayers alike," Sandusky school board member Martha Murray said. What's the holdup? First unveiled in 2023, all parties involved in transforming Battery Park called the tax deal absolutely necessary to move forward with this mixed-use site. Just getting to his point has taken a lot of time. For starters, the state owns this land, leasing this space to Sandusky's government. And, in turn, because of this deal, Sandusky is subleasing this space to Marous. And city officials, who shied away from providing an exact groundbreaking or opening date, noted they and Marous representatives still must overcome many complex situations to make this vision a reality. Issues also persist since this site borders and even traverses over water. This would include the marina abutting a building once home to Damon's, a casual dining establishment. Not too long ago, however, Marous, overseeing all construction work, did line up crews to perform environmental work, ensuring no toxins exist there — and, if they did, clean them up before development work begins. This marked a major milestone reached. This accompanied crews installing temporary fencing to section off construction work from motorists and pedestrians along Meigs Street. Right now, crews are: • Trucking in fresh dirt to backfill a parking lot where the tennis courts were previously located • Getting ready to demolish the multistory structure looking over Sandusky Bay • Planning to remove underground fuel storage tanks "All of this takes a significant amount of time," said city manager John Orzech, noting the Erie County land bank provided $10 million for this remediation work. "Everything we have been doing with this project, up until now, has been behind the scenes." Orzech expects most of this remediation work to end by summertime with some other minor tasks taking longer to complete. What'll go there? Once the remediation work ends, then crews can actually pursue construction work to create Battery Park's new look, totaling 33 acres and consisting of: • A mix of homes, broken up with 193 apartments and 66 condominiums • A hotel featuring anywhere between 120 and 130 rooms • First-floor retail space • New utility infrastructure to support higher water and sewer demands • Greenspace ranging between 6 acres and 9 acres • Better public spaces, such as boardwalks, break walls, piers and more to make this area safer and more inviting for future programming • An extension of East Market and East Water streets to lead into this property "The Battery Park development is a transformative investment in the city of Sandusky," city ex officio mayor Kate Vargo said. "It responds to an important part of our strategic plan for quality housing while also revitalizing a key stretch of our waterfront. This project will enhance the beauty of our shoreline, strengthen infrastructure, improve public access and drive meaningful economic growth long into the future." More on Marous' involvement City officials stressed how they're not providing any funds from their local budgets, largely backed by area taxpayers, to subsidize this project. The aforementioned tax deal didn't involve any dollars going from city coffers to Marous for this project. Marous, rather, is expected to finance these aspects, doing so through, among other ways, applying for state grants. "The plan is, by doing all of this, we will make the waterfront and the city come alive," said Chip Marous, Marous' CEO and president. Marous boasts a successful track record in the city, overseeing projects which include: • Resurrecting the Feick Building • Reinvigorating three buildings into Vita Sandusky and Sandusky City Hall • Establishing a brick-and-mortar postsecondary institution for Bowling Green State University's and Cedar Fair's resort and attraction management program These three areas all feature a residential component as proposed for Battery Park. "What we are focused on is ensuring this beautiful city — that has an unbelievable inventory of historic buildings, a great downtown and a great waterfront — realizes and maximizes on its potential," Marous said. Based on the company's recent history in Sandusky, officials expressed full confidence Marous can make this idea a reality. Local officials described this initiative as a catalytic project for Sandusky. Battery Park "will create high-quality public space, increase waterfront access, increase city residents with new housing options, increase city visitors with new hotel rooms and event spaces, create new opportunities for local businesses expansion, create jobs and benefit the city and regional economy," city chief planner Arin Blair said.