THE JEFFREY PLACE NEW COMMUNITY AUTHORITY (OHIO)

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1 THIS PRELIMINARY PRIVATE PLACEMENT MEMORANDUM AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION OR AMENDMENT IN A FINAL PRIVATE PLACEMENT MEMORANDUM. Under no circumstances shall this Preliminary Private Placement Memorandum constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the Bonds laws of any such jurisdiction. PRELIMINARY PRIVATE PLACEMENT MEMORANDUM DATED JANUARY 27, 2014 New Issue Book-Entry Only NOT RATED In the opinion of Squire Sanders (US) LLP, Bond Counsel, under existing law: (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the 2013 Series B Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the 2013 Series B Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax Interest on the 2013 Series B Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more complete discussion of the tax aspects, see TAX MATTERS. Dated: Date of Initial Delivery PRIVATE PLACEMENT MEMORANDUM THE JEFFREY PLACE NEW COMMUNITY AUTHORITY (OHIO) $3,700,000 * Jeffrey Place Subordinate Redevelopment Bonds (Onsite Revenue), 2013 Series B Due: As shown on the inside front cover The 2013 Series B Bonds: The Jeffrey Place New Community Authority, a new community authority and body corporate and politic (the Authority ), is issuing its $3,700,000 * Jeffrey Place Subordinate Redevelopment Bonds (Onsite Revenue), 2013 Series B (the 2013 Series B Bonds ) to pay a portion of the costs of certain infrastructure improvements associated with the real estate development project known as Jeffrey Park, all as described herein under 2013 SERIES B BONDS Authorization and Purpose. The 2013 Series B Bonds are authorized under the Master Trust Agreement, dated as of January 1, 2007 (the Master Trust Agreement ), as supplemented and amended by the First Supplemental Trust Agreement, dated January 1, 2007 (the First Supplemental Trust Agreement ), the Second Supplemental Trust Agreement, dated as of February 1, 2014 (the Second Supplemental Trust Agreement ), and the Third Supplemental Trust Agreement, dated as of February 1, 2014 (the Third Supplemental Trust Agreement, and together with the Master Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement, the Trust Agreement ), between the Authority and U.S. Bank National Association, as trustee (together with any successors, the Trustee ).THE 2013 SERIES B BONDS ARE SUBORDINATE TO THE SENIOR BONDS SECURED BY THE TRUST AGREEMENT. See SECURITY AND SOURCES OF PAYMENT. THE 2013 SERIES B BONDS ARE BEING OFFERED, AND MAY BE RESOLD, ONLY TO ACCREDITED INVESTORS, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO ACTION HAS BEEN TAKEN TO QUALIFY THE 2013 SERIES B BONDS FOR SALE UNDER THE SECURITIES LAWS OF ANY STATE. THE PURCHASE OF THE 2013 SERIES B BONDS IS AN INVESTMENT SUBJECT TO A HIGH DEGREE OF RISK, INCLUDING THE RISK OF NON-PAYMENT OF PRINCIPAL AND INTEREST. SEE INVESTMENT CONSIDERATIONS HEREIN FOR A DISCUSSION OF THOSE FACTORS THAT SHOULD BE CONSIDERED, IN ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN EVALUATING THE INVESTMENT QUALITY OF THE 2013 SERIES B BONDS. THE 2013 SERIES B BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY PAYABLE AS TO BOTH PRINCIPAL AND INTEREST SOLELY FROM PLEDGED RECEIPTS AND SPECIAL FUNDS. THE 2013 SERIES B BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY AND DO NOT CONSTITUTE A DEBT, OR A PLEDGE OF THE FAITH AND CREDIT, OF THE STATE OF OHIO OR OF ANY POLITICAL SUBDIVISION THEREOF, AND THE HOLDERS THEREOF HAVE NO RIGHT TO HAVE TAXES LEVIED BY THE OHIO GENERAL ASSEMBLY OR THE TAXING AUTHORITY OF THE CITY OF COLUMBUS OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE FOR THE PAYMENT OF THE PRINCIPAL THEREOF OR INTEREST THEREON. Book-Entry: The 2013 Series B Bonds will be initially issued only as fully registered bonds, one for each maturity, issuable under a book entry system, registered initially in the name of The Depository Trust Company or its nominee (DTC). There will be no distribution of 2013 Series B Bonds to the ultimate purchasers. The 2013 Series B Bonds in certificated form as such will not be transferable or exchangeable, except for transfer to another nominee of DTC or as otherwise described in this Private Placement Memorandum. See APPENDIX D and APPENDIX E. Payment: Principal and interest will be payable to the registered owner (DTC), principal upon presentation and surrender at the Columbus, Ohio corporate trust office of U.S. Bank National Association (the Trustee and Bond Registrar ), and interest transmitted by the Trustee on each interest payment date (June 1 and December 1 of each year, commencing June 1, 2014) to the registered owner (DTC) as of the 15th day of the calendar month preceding that interest payment date. Redemption Provisions: The 2013 Series B Bonds are subject to optional redemption prior to stated maturity, as set forth herein. The 2013 Series B Bonds maturing December 1, 2044 * will be subject to mandatory sinking fund redemption prior to stated maturity, as set forth herein. See DETAILS OF THE 2013 SERIES BBONDS Redemption Provisions. The 2013 Series B Bonds are offered when, as and if issued, and accepted by Stifel Nicolaus & Company, Incorporated (the Placement Agent ), subject to the opinion on certain legal matters relating to their issuance by Squire Sanders (US) LLP, Bond Counsel. Certain legal matters will be passed upon for the Placement Agent by Bricker & Eckler LLP. This Private Placement Memorandum has been prepared by the Authority in connection with its original offering for sale of the 2013 Series B Bonds. This cover page includes certain information for quick reference only. It is not a summary of the bond issue. Investors should read the entire Private Placement Memorandum to obtain information as a basis for making informed investment judgments. * Preliminary, subject to change. The date of this Private Placement Memorandum is January, 2014, and the information speaks only as of that date.

2 THE JEFFREY PLACE NEW COMMUNITY AUTHORITY (OHIO) $3,700,000 * JEFFREY PLACE SUBORDINATE REDEVELOPMENT BONDS (ONSITE REVENUE), 2013 SERIES B. % CURRENT INTEREST TERM BONDS MATURING DECEMBER 1, 2044 *, PRICE. %, CUSIP * Preliminary, subject to change. Copyright 2013, American Bankers Association. CUSIP data herein are assigned by Standard & Poor s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., an independent company not affiliated with the Authority and are included solely for the convenience of the holders of the 2013 Series B Bonds. The Authority, Bond Counsel and the Placement Agent are not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness. The CUSIP number for a specific maturity is subject to being changed after the issuance of the 2013 Series B Bonds.

3 REGARDING USE OF THIS PRIVATE PLACEMENT MEMORANDUM This Private Placement Memorandum does not constitute an offering of any security other than the original offering of the Jeffrey Place Subordinate Redevelopment Bonds (Onsite Revenue), 2013 Series B (the 2013 Series B Bonds ) of the Jeffrey Place New Community Authority (the Authority ) identified on the cover. No person has been authorized by the Authority to give any information or to make any representation, other than that contained in this Private Placement Memorandum, and if given or made, such other information or representation not so authorized must not be relied upon as having been given or authorized by the Authority. This Private Placement Memorandum does not constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any sale of the 2013 Series B Bonds by any person, in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. THE 2013 SERIES B BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933 AND THE TRUST AGREEMENT HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF A PURCHASER HAS NO RIGHT TO REQUIRE SUCH REGISTRATION. IN ADDITION, THESE SECURITIES MAY BE SUBJECT TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF VARIOUS STATES, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH LAWS. THE REGISTRATION OR QUALIFICATION OF THE 2013 SERIES B BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES IN WHICH THE 2013 SERIES B BONDS HAVE BEEN REGISTERED, IF ANY, AND ANY EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES, SHALL NOT BE REGARDED AS A RECOMMENDATION THEREOF. NO STATE NOR ANY STATE OR FEDERAL AGENCY HAS PASSED UPON THE MERITS OF THE 2013 SERIES B BONDS OR THE ACCURACY OR COMPLETENESS OF THIS PRIVATE PLACEMENT MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. The Placement Agent has provided the following sentence for inclusion in this Private Placement Memorandum. The Placement Agent has reviewed the information in this Private Placement Memorandum in accordance with, and as part of, its responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Placement Agent does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice. Neither the delivery of this Private Placement Memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority since the date hereof. All financial and other information presented in this Private Placement Memorandum has been provided by the Authority from its records, except for information expressly attributed to other sources. The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent historic information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the Authority. No representation is made that past experience, as is shown by that financial and other information, will necessarily continue or be repeated in the future. Insofar as the statements contained in this Private Placement Memorandum involve matters of opinion or estimates, even if not expressly stated as such, such statements are made as such and not as representations of fact or certainty, no representation is made that any of such statements have been or will be realized, and such statements should be regarded as suggesting independent investigation or consultation of other sources prior to the making of investment decisions. Certain information may not be current; however, attempts were made to date and document sources of information. Neither this Private Placement Memorandum nor any oral or written representations by or on behalf of the Authority

4 preliminary to sale of the 2013 Series B Bonds should be regarded as part of the Authority s contract with the holders from time to time of the 2013 Series B Bonds. References herein to provisions of Ohio law, whether codified in the Ohio Revised Code or uncodified, or to the provisions of the Ohio Constitution or the Authority s resolutions and rules and regulations, are references to such provisions as they presently exist. Any of these provisions may from time to time be amended, repealed or supplemented. [Balance of Page Intentionally Left Blank]

5 CITY OF COLUMBUS FRANKLIN COUNTY, OHIO

6 [This Page Is Intentionally Left Blank.]

7 TABLE OF CONTENTS SELECTED SUMMARY STATEMENT... iii INTRODUCTORY STATEMENT...1 General...1 Definitions...2 THE 2013 SERIES B BONDS...4 Authorization and Purpose...4 Forms and Terms...5 Redemption Provisions...5 Sources and Uses of Funds...7 Bond Service Charges and Projected Coverage Levels...8 SECURITY AND SOURCES OF PAYMENT...9 Bond Service Fund and Pledged Receipts...9 ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments Community Development Charge TRUST AGREEMENT Flow of Funds Surplus Fund Transfers Transfers to the Bond Service Account for Senior Bonds Special Deposit of Assigned Service Payments into the Project Fund Investment of Funds Other Trust Agreement Provisions Additional Bonds Events of Default; Remedies Enforcement by Mandamus Defeasance Non-presentment of Bonds Supplemental Trust Agreements; Modifications Covenants of the Authority Trustee COOPERATIVE AGREEMENT General Cooperative Agreement Term Assigned Service Payments Obligations Unconditional THE DISTRICT AND AUTHORITY Creation and Amendment of the District; Powers of the Authority Board of Trustees Dissolution of Authority THE DEVELOPER AND THE DEVELOPMENT Developer Development FINANCIAL MATTERS Introduction Financial Reports and Examinations of Accounts PROJECT REVENUE CONSULTANT RISK FACTORS Assumptions and Projections Failure to Complete the Development Lack of Rating and Market for the 2013 Series B Bonds Sufficiency of Assigned Service Payments and Charges Appropriation of Assigned Service Payments Level of Assessed Valuation; Valuation Challenges Insufficiency of Pledged Receipts Collection Procedures and Timing Risks Associated With Generation of TIF Revenues and Charges Delinquencies and Delinquency Procedures Disclosure to Future Property Purchasers FORWARD-LOOKING STATEMENTS LITIGATION LEGAL OPINION TAX MATTERS Risk of Future Legislative Changes and/or Court Decisions. 42 Original Issue Discount and Original Issue Premium PLACEMENT AGENT NO RATING TRANSCRIPT AND CLOSING DOCUMENTS CONTINUING DISCLOSURE CONCLUDING STATEMENT APPENDIX A FORM OF LEGAL OPINION... A-1 APPENDIX B PGAV REPORT... B-1 APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT... C-1 APPENDIX D BOOK-ENTRY SYSTEM; DTC... D-1 APPENDIX E FORM INVESTOR LETTER... E-1

8 JEFFREY PLACE NEW COMMUNITY AUTHORITY JEFFREY PLACE SUBORDINATE REDEVELOPMENT BONDS, 2013 SERIES B SIMPLIFIED FLOW OF FUNDS CHART Italian Village TIF * Jeffrey Place TIF City of Columbus Bond Trustee; Master, First, Second and Third Supplements Jeffrey Place Community Charge Senior Bonds Administrative Expenses 2013 Series B Bonds O&M Expenses Surplus Fund The Italian Village TIF Revenues are pledged solely to payment of Bond Service Payments on the Senior Bonds. See TRUST AGREEMENT Flow of Funds. ii

9 SELECTED SUMMARY STATEMENT The following introduction and summary supplements certain of the information on the cover page and summarizes selected other information in this Private Placement Memorandum relating to the 2013 Series B Bonds. It is not intended as a substitute for the more detailed discussions in this Private Placement Memorandum, to which reference should be made. ISSUER. The 2013 Series B Bonds are authorized and issued by the Jeffrey Place New Community Authority, a new community authority organized and created under Chapter 349 of the Ohio Revised Code. AUTHORIZATION. The 2013 Series B Bonds are authorized and issued by the Authority pursuant to the Act, the General Bond Resolution and the 2013 Series B Resolution. DEVELOPMENT. The Authority has been created by the City to assist with the financing of the Jeffrey Park real estate development (the Development ), which consists of the redevelopment of an approximately 41-acre former manufacturing site (the District ) located east of Fourth Street, south of First Avenue, north of I-670, and west of I-71, into a mixed-use residential neighborhood that will provide urban housing in close proximity to downtown Columbus. Upon completion, the Development is expected to have up to 1,500 units of high-end rental and for-sale housing, retail and commercial office space, structured parking, dedicated parks and greenspace, and a community center with fitness facilities. The Development will be completed in phases, with the first phase of the Development to include twelve three- and four-story buildings consisting of 276 market-rate rental units, 176 townhomes and a community center. See THE DEVELOPER AND THE DEVELOPMENT Development. SECURITY AND SOURCES OF PAYMENT.The2013 Series B Bonds will be secured under the Trust Agreement on a subordinate basis to the Senior Bonds. See TRUST AGREEMENT Flow of Funds. The Bond Service Charges are payable solely from the Pledged Receipts pledged under the Trust Agreement, including: (a)the Assigned Service Payments from the.41 TIF; (b) the Charge collected by the Authority; and (c) the funds and accounts maintained under the Trust Agreement, all as further described in this Private Placement Memorandum. Bond Service Charges on the 2013 Series B Bonds are not secured by or payable from the Italian Village TIF Revenues. See SECURITY AND SOURCES OF PAYMENT Bond Service Fund and Pledged Receipts. The Assigned Service Payments from the.41 TIF are to be received from the City pursuant to the Cooperative Agreement among the City, the Authority and the Developer and used, together with the Charge, to pay Bond Service Charges on the Senior Bonds and then to pay Bond Service Charges on the 2013 Series B Bonds issued pursuant to the Master Trust Agreement. The payments received by the Authority from the City are Pledged Receipts. The City will make payments required by the Cooperative Agreement only from moneys available and appropriated by the City for that purpose. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments. THE 2013 SERIES B BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY PAYABLE AS TO BOTH PRINCIPAL AND INTEREST SOLELY FROM PLEDGED RECEIPTS AND SPECIAL FUNDS. THE 2013 SERIES B BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY AND DO NOT CONSTITUTE A DEBT, OR A PLEDGE OF THE FAITH AND CREDIT, OF THE STATE OF OHIO OR OF ANY POLITICAL SUBDIVISION THEREOF, AND THE HOLDERS THEREOF HAVE NO RIGHT TO HAVE TAXES LEVIED BY THE OHIO GENERAL ASSEMBLY OR THE TAXING AUTHORITY OF THE CITY OF COLUMBUS OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE FOR THE PAYMENT OF THE PRINCIPAL THEREOF OR INTEREST THEREON. iii

10 PURPOSE OF THE 2013 SERIES B BONDS. The 2013 Series B Bonds are being issued for the purposes of (i) paying the costs of land acquisition and land development, (ii) paying the costs of constructing Community Facilities (as defined in the Act), and (iii) paying the costs of issuance of and any capitalized interest for the 2013 Series B Bonds. See 2013 SERIES B BONDS Authorization and Purpose. Upon issuance of the 2013 Series B Bonds, the Senior Bonds and the 2013 Series B Bonds will be the only outstanding Bonds issued under and secured by the Trust Agreement. See TRUST AGREEMENT Additional Bonds. PRIOR REDEMPTION. The 2013 Series B Bonds are subject (1) to mandatory sinking fund redemption and (2) to optional redemption at any time upon proper notice, both as described in herein. See DETAILS OF THE 2013 SERIES B BONDS Redemption Provisions. PAYMENT OF THE 2013 SERIES B BONDS. Bond Service Charges will be payable to the registered owner on each interest payment date (June 1 and December 1, beginning June 1, 2014). The 2013 Series B Bonds are authorized to be issued in denominations of at least $25,000 and any integral multiple of $5,000 in excess thereof, provided that each 2013 Series B Bond will be of a single maturity. TAX MATTERS. In the opinion of Squire Sanders (US) LLP, Bond Counsel, under existing law: (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the 2013 Series B Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the 2013 Series B Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax Interest on the 2013 Series B Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more complete discussion of the tax aspects, see TAX MATTERS. BOOK ENTRY ONLY SYSTEM. The 2013 Series B Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co, as nominee of The Depository Trust Company, New York, New York (DTC). DTC will act as the book entry depository for the 2013 Series B Bonds. No physical delivery of 2013 Series B Bonds will be made to the purchasers. Payments of principal, interest, and premium on the 2013 Series B Bonds will be made to the purchasers by DTC Participants and Indirect Participants (defined herein). See APPENDIX D BOOK-ENTRY SYSTEM; DTC. PLACEMENT AGENT. Stifel Nicolaus & Company, Incorporated DEVELOPER. Jeffrey New Day LLC BOND COUNSEL. Squire Sanders (US) LLP COUNSEL TO THE PLACEMENT AGENT. Bricker & Eckler LLP DEVELOPER COUNSEL. Frost Brown Todd LLC TRUSTEE AND BOND REGISTRAR. U.S. Bank National Association [Balance of Page Intentionally Left Blank] iv

11 INTRODUCTORY STATEMENT General This Private Placement Memorandum has been prepared by The Jeffrey Place New Community Authority (the Authority ) to provide certain information in connection with the original issuance and sale of the Authority s Jeffrey Place Subordinate Redevelopment Bonds (Onsite Revenue), 2013 Series B (the 2013 Series B Bonds ). Certain information concerning the authorization, purpose, terms, and sources of payment and security is provided in this Private Placement Memorandum. All financial and other information in this Private Placement Memorandum has been provided by the Authority from its records, except for information expressly attributed to other sources and except for certain information on the inside cover and under UNDERWRITING and in APPENDIX A, APPENDIX B, and APPENDIX D. The presentation of information, including tables of receipts, is intended to show recent historical information, and is not intended to indicate future or continuing trends in the financial position or other affairs of the Authority or any other entity. No representation is made that past experience, as is shown by that financial and other information, will necessarily continue or be repeated in the future. This Private Placement Memorandum should be considered in its entirety and no one subject considered less important than another by reason of location in the text. Reference should be made to laws, reports or documents referred to for more complete information regarding their contents. No person should purchase any 2013 Series B Bonds without a careful review and consideration of matters affecting the security of an investment in the 2013 Series B Bonds, including those set forth under the caption RISK FACTORS. References herein to provisions of Ohio law (whether codified in the Ohio Revised Code or uncodified), the Ohio Constitution, or federal law are references to such provisions as they presently exist. Provisions of Ohio law, the Ohio Constitution and federal law may in the future, and from time to time, be amended, repealed or supplemented. All information concerning the Developer and the status of and plans and prospects for continuing development of the Authority s new community district (the District ) has been provided by the Developer, and the Authority has not verified that information. The Authority assumes no responsibility with respect to any additional information that might be provided by the Developer to any person. THE 2013 SERIES B BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY PAYABLE AS TO BOTH PRINCIPAL AND INTEREST SOLELY FROM PLEDGED RECEIPTS AND SPECIAL FUNDS. THE 2013 SERIES B BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY AND DO NOT CONSTITUTE A DEBT, OR A PLEDGE OF THE FAITH AND CREDIT, OF THE STATE OF OHIO OR OF ANY POLITICAL SUBDIVISION THEREOF, AND THE HOLDERS THEREOF HAVE NO RIGHT TO HAVE TAXES LEVIED BY THE OHIO GENERAL ASSEMBLY OR THE TAXING AUTHORITY OF THE CITY OF COLUMBUS OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE FOR THE PAYMENT OF THE PRINCIPAL THEREOF OR INTEREST THEREON.

12 Definitions As used in this Private Placement Memorandum: Act means Chapter 349 of the Ohio Revised Code. Authority means The Jeffrey Place New Community Authority, a new community authority and body corporate and politic, organized and created under Chapter 349 of the Ohio Revised Code. Board means the Board of Trustees of the Authority. Bond Service Charges means principal and interest payable on the 2013 Series B Bonds or other Bonds, including any mandatory sinking fund or accreted amount payment. Bonds means any bonds, notes or other obligations issued by the Authority pursuant to the Trust Agreement, including the 2006 Series A Bonds, the 2013 Series A Bonds and the 2013 Series B Bonds. City means the City of Columbus, Ohio. Cooperative Agreement means the Tax Increment Financing and Cooperative Agreement, dated January 17, 2007, as amended and supplemented by the First Amendment to and Restatement of Tax Increment Financing Cooperative Agreement, dated February 1, 2014, by and among the Authority, the City and the Developer. County means Franklin County, Ohio. Declaration means the Declaration of Covenants and Restrictions, as supplemented and amended by the First Amendment to the Declaration of Covenants and Restrictions, dated February 1, Developer means Jeffrey New Day LLC, Columbus, Ohio. Development means the real estate development project known as Jeffrey Park consisting of the redevelopment of approximately 41 acres of a former manufacturing site into a mixed-use residential neighborhood, which will include approximately 1,500 units of high-end rental and for sale housing, retail and commercial office space, structured parking, dedicated parks and greenspace, and a community center with fitness facilities. General Bond Resolution means the resolution adopted by the Board on November 27, Senior Bonds means the Authority s 2006 Series A Bonds and 2013 Series A Bonds. State means the State of Ohio. Third Supplemental Trust Agreement means the Third Supplemental Trust Agreement, dated February 1, 2014, between the Authority and the Trustee, securing the 2013 Series B Bonds. Trust Agreement means the Master Trust Agreement, dated as of January 1, 2007, as supplemented and amended by the First Supplemental Trust Agreement, dated January 1, 2007, the Second Supplemental Trust Agreement, dated February 1, 2014, and the Third Supplemental Trust Agreement, between the Authority and the Trustee. 2

13 Trustee means U.S. Bank National Association, Columbus, Ohio Series A Bonds means the Authority s $6,995,000 Jeffrey Place Redevelopment Bonds, 2006 Series A, dated January 17, Series A Bonds means the Authority s $8,510,000 Jeffrey Place Redevelopment Bonds, 2013 Series A Series B Bonds means the Authority s $3,700,000 * Jeffrey Place Subordinate Redevelopment Bonds (Onsite Revenue), 2013 Series B Series B Resolution means Resolution No authorizing the 2013 Series B Bonds adopted by the Board of the Authority on December 2, [Balance of Page Intentionally Left Blank] Preliminary, subject to change. 3

14 THE 2013 SERIES B BONDS Authorization and Purpose The 2013 Series B Bonds are being issued pursuant to the Act, the General Bond Resolution, the 2013 Series B Resolution, the Cooperative Agreement and the Trust Agreement all as described below. The 2013 Series B Bonds are being issued for the purposes of (i) paying the costs of land acquisition and land development, (ii) paying the costs of constructing Community Facilities (as defined in the Act), and (iii) paying the costs of issuance of and any capitalized interest for the 2013 Series B Bonds. Basic Documents The Authority, in accordance with the Act, is authorized to issue the 2013 Series B Bonds pursuant to the General Bond Resolution and the 2013 Series B Resolution adopted by the Board. The 2013 Series B Bonds will be secured under the Trust Agreement and will be subordinate to senior bonds that have been heretofore or that may be hereafter issued under the Trust Agreement, including the Authority s Senior Bonds, and on parity with other subordinate bonds issued under the Trust Agreement. The Authority has authorized and will enter into the Third Supplemental Trust Agreement to provide for the issuance and security of the 2013 Series B Bonds. The General Bond Resolution is the basic bond resolution pertaining to all series of Bonds and forms part of the Master Trust Agreement. For each series of Bonds a series resolution is adopted which forms part of the supplemental trust agreement entered into with respect to that series of Bonds. The 2013 Series B Bonds have been authorized by the 2013 Series B Resolution. The Cooperative Agreement is the basic agreement between the Authority, the City and the Developer pertaining to all series of Bonds. Under the Cooperative Agreement, the City assigns to the Authority the Assigned Service Payments, which constitute a portion of the Pledged Receipts. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments. Pursuant to the Act, owners of real property within the District have filed a Declaration with the Franklin County Recorder on the real property comprising the District. The Declaration creates covenants running with the land establishing the obligation of current and future landowners to pay the Charge, which is subject to certain maximum Charge limits. The Charge will generally be collected in the same manner as real property taxes. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Community Development Charge. The Senior Bonds The Senior Bonds are issued pursuant to the same Trust Agreement as the 2013 Series B Bonds, and are generally secured by and paid from the same Pledged Receipts and other moneys assigned under the Trust Agreement securing the 2013 Series B Bonds, as well as by Italian Village TIF Revenues, which are not pledged to the payment of Bond Service Charges on the Series 2013 B Bonds. The Senior Bonds are senior to the 2013 Series B Bonds. See TRUST AGREEMENT Flow of Funds and ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments. 4

15 Forms and Terms The 2013 Series B Bonds will be issued in fully registered form and will be dated, will be payable in the amounts and on the dates, will bear interest (computed on the basis of a 360-day year and twelve 30-day months) at the rates and payable on the dates, and will be payable at the place and in the manner, described on the cover and inside cover pages of this Private Placement Memorandum. The 2013 Series B Bonds will be issued and available for book entry interest ownership in authorized in denominations of $25,000 and any integral multiple of $5,000 in excess thereof. The Trustee as Bond Registrar will keep all books and records necessary for registration, exchange and transfer of the 2013 Series B Bonds. The 2013 Series B Bonds will be issued initially under a book entry method. Details regarding the procedures for and manner of payment, issuance, exchange and transfer of the 2013 Series B Bonds under the book entry method are discussed in APPENDIX D. Redemption Provisions Mandatory Sinking Fund Redemption The 2013 Series B Bonds stated to mature on December 1, 2044 * are subject to mandatory sinking fund redemption at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date of redemption, on December 1 and June 1 of the years and in the respective principal amounts as follows: Year * Amount * Year * Amount * December 1, ,000 December 1, 2030 $175,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 December 1, ,000 The balance of the principal of the 2013 Series B Bonds maturing on December 1, 2044 * ($230,000 * ) is payable at their stated maturity on December 1, 2044 *. Optional Redemption The 2013 Series B Bonds are subject to redemption at the option of the Authority, either in whole, or in part, in such order of maturity as the Authority shall determine, on any date and in integral * Preliminary, subject to change 5

16 multiples of $5,000 at a redemption price of 100% of the principal amount to be redeemed, plus interest accrued to the redemption date. If fewer than all outstanding 2013 Series B Bonds are called for redemption at one time, the 2013 Series B Bonds to be called will be called as selected by, and selected in a manner as determined by, the Authority. When partial redemption of any 2013 Series B Bonds is authorized, the selection of 2013 Series B Bonds (or those portions of 2013 Series B Bonds in integral multiples of $5,000) to be redeemed will be made by lot in a manner determined by the Trustee. The Trustee is to cause notice of the call for redemption, identifying the 2013 Series B Bonds or portions thereof to be redeemed, to be sent at least 7 days prior to the redemption date, to the registered owner (initially, DTC) of each 2013 Series B Bond to be redeemed at the address then shown on the Register on the 15th day preceding that notice. Any defect in the notice or any failure to receive notice will not affect the validity of any proceedings for the redemption of any 2013 Series B Bonds. On the date designated for redemption, 2013 Series B Bonds or portions thereof called for redemption shall become due and payable. If the Trustee then holds in the Subordinate.41 TIF/Charge Bond Service Account (as defined herein) sufficient moneys for payment of Bond Service Charges payable on that redemption date, interest on each 2013 Series B Bond (or portion thereof) so called for redemption will cease to accrue on that redemption date. So long as all 2013 Series B Bonds are held under a book entry system by a securities depository (such as DTC), call notice is sent by the Trustee only to the depository or its nominee. Selection of book entry interests in the 2013 Series B Bonds called, and giving notice of the call to the owners of those interests called, is the sole responsibility of the depository and of its participants and indirect participants. Any failure of the depository to advise any participant, or of any participant or any indirect participant to notify the book entry interest owners, of any such notice and in its content or effect will not affect the validity of any proceedings for the redemption of any 2013 Series B Bonds or portions thereof. See APPENDIX D BOOK-ENTRY SYSTEM; DTC. [Balance of Page Intentionally Left Blank] 6

17 Sources and Uses of Funds The estimated sources and uses of funds in connection with the issuance of the 2013 Series A Bonds and the 2013 Series B Bonds, are as follows: Sources Proceeds from 2013 Series B Bonds Par Amount $3,700, * Net Premium/Discount Proceeds from 2013 Series A Bonds $8,510, * Total Sources $ Uses Deposit to Public Works Account of Project Fund $ Deposit to Community Center Account of Project Fund Deposit to the Reserve Account for Senior Bonds Costs of issuance ** Total Uses $ * Preliminary, subject to change ** Includes Placement Agent s fee, legal and accounting fees, printing and other incidental costs related to the issuance of the 2013 Series A Bonds and the 2013 Series B Bonds. [Balance of Page Intentionally Left Blank] 7

18 Bond Service Charges and Projected Coverage Levels The following table sets forth the Bond Service Charges for the Senior Bonds and the 2013 Series B Bonds, as well as the projected coverage levels from Assigned Service Payments and the Charge. Year Total Revenue 2006 Total Debt Service (1) 2013 Series A Estimated Debt Service (2) NCA Administrative Expenses 2013 Series B Estimated Debt Service (3) Combined Coverage on All Debt Service 2014 $1,272,332 $524,000 $392,653 $ 35,000 $ 64, ,526, , ,075 35, , ,835, , ,575 35, , ,016, , ,575 35, , ,206, , ,575 35, , ,413, , ,700 35, , ,545, , ,075 35, , ,705, , ,950 35, , ,870, , ,200 35, , ,947, , ,450 35, , ,993, , ,188 35, , ,995, , ,500 35, , ,031, , ,300 35, , ,067, , ,588 35, , ,104, , ,638 35, , ,141, , ,500 35, , ,179, , ,800 35, , ,218, , ,000 35, , ,136,450 1,055, ,950 35, , ,150, ,496,550 35, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , TOTAL $62,521,928 $9,469,000 $15,043,840 $1,085,000 $ 10,031,950 Source: Peckham Guyton Albers & Viets, Inc. See PGAV Report attached hereto as APPENDIX B. 1) The debt service total for 2032 contains the amount of $615, expected to be paid from amounts in the Debt Service Reserve Fund. 2) Subject to change. The 2033 debt service contains the amount of $761, expected to be paid from amounts in the Debt Service Reserve Fund. 3) Subject to change. Maturities 2014 and 2015 contain Capitalized Interest Payments. 8

19 Bond Service Fund and Pledged Receipts SECURITY AND SOURCES OF PAYMENT The 2013 Series B Bonds are secured by and from Pledged Revenues, including Assigned Service Payments from the.41 TIF and Special Funds securing the Senior Bonds, but are subordinate to the Senior Bonds. See TRUST AGREEMENT Flow of Funds. The Bond Service Charges due on the 2013 Series B Bonds are payable solely from the Pledged Receipts pledged under the Trust Agreement, including: (a) the Assigned Service Payments to be paid to the Authority under the Cooperative Agreement from the.41 TIF; (b) the Charge collected by the Authority; (c) all receipts standing to the credit of the Bond Service Fund, the Capitalized Interest Account, the Operating and Maintenance Fund, and the Surplus Fund; and (d) the revenues, receipts and other moneys assigned under the Trust Agreement to secure payment. The 2013 Series B Bonds are not secured by the Italian Village TIF Revenues or by a reserve account. The Pledged Receipts securing the 2013 Series B Bonds also secure the Senior Bonds. The 2013 Series B Bonds are subordinate to the Senior Bonds. See TRUST AGREEMENT Flow of Funds. THE 2013 SERIES B BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY PAYABLE AS TO BOTH PRINCIPAL AND INTEREST SOLELY FROM PLEDGED RECEIPTS AND SPECIAL FUNDS. THE 2013 SERIES B BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY AND DO NOT CONSTITUTE A DEBT, OR A PLEDGE OF THE FAITH AND CREDIT, OF THE STATE OF OHIO OR OF ANY POLITICAL SUBDIVISION THEREOF, AND THE HOLDERS THEREOF HAVE NO RIGHT TO HAVE TAXES LEVIED BY THE OHIO GENERAL ASSEMBLY OR THE TAXING AUTHORITY OF THE CITY OF COLUMBUS OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE FOR THE PAYMENT OF THE PRINCIPAL THEREOF OR INTEREST THEREON. [Balance of Page Intentionally Left Blank] 9

20 ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments The Development is located on 41.5 acres immediately north of downtown Columbus, Ohio, adjacent to the City s Arena District and the Italian Village neighborhood. The following map shows the Jeffrey Place Tax Increment Financing Area and the Italian Village Tax Increment Financing Area (as described below). The owners of real property located in these separate tax increment financing areas make payments in lieu of taxes to the City, which constitute the Assigned Service Payments payable to the Authority under the Cooperative Agreement. The Jeffrey Place Tax Increment Financing Area. Pursuant to Ohio Revised Code Sections , and (the.41 TIF Statute ), the City passed Ordinance No on April 8, 2002, as amended by Ordinance No passed July 22, 2013 (together, the.41 TIF Ordinance ), (i) declaring the Improvement (as defined in the.41 TIF Statute) to the real property subject to the tax exemption granted in the.41 TIF Ordinance (the Jeffrey Place Tax Increment Financing Area ) to be a public purpose subsequent to the effective date of the.41 TIF Ordinance, (ii) exempted 100% of the Improvement to the parcels in the Jeffrey Place Tax Increment Financing Area from taxation for a 30-year period from the respective effective dates of the.41 TIF Ordinance, and (iii) required the owners of the parcels in the Jeffrey Place Tax Increment Financing Area to make annual service payments to the County Treasurer on or before the final dates for payment of real property taxes. In addition, pursuant to the.41 TIF Ordinance, the City has established the Jeffrey Place Urban Redevelopment Tax Increment Equivalent Fund (Fund 417) (the Jeffrey Place TIF Fund ) into which the service payments in or in lieu of taxes and any applicable property rollback payments (the Jeffrey Place TIF Revenues ) are deposited. Pursuant to the Cooperative Agreement, the City has assigned the Jeffrey Place TIF Revenues to the Authority, which shall be pledged to pay Bond Service Charges pursuant to the Trust Agreement. See COOPERATIVE AGREEMENT and THE TRUST AGREEMENT. 10

21 The Italian Village Tax Increment Financing Area. Pursuant to Ohio Revised Code Sections , and (the.40 TIF Statute, and together with the.41 TIF Statute, the TIF Statutes ), the City passed Ordinance No on October 28, 2002, as amended by Ordinance No, passed on September 9, 2013 (together, the.40 TIF Ordinance, and together with the.41 TIF Ordinance, referred to collectively as the TIF Ordinances and each individually as a TIF Ordinance ), (i) declaring the Improvement (as defined in the.40 TIF Statute) to the real property subject to the tax exemption granted in the.40 TIF Ordinance (the Italian Village Tax Increment Financing Area, and together with the Jeffrey Place Tax Increment Financing Area, the Tax Increment Financing Area ) to be a public purpose subsequent to the effective date of the.40 TIF Ordinance, (ii) exempted 100% of the Improvement to the parcels in the Italian Village Tax Increment Financing Area from taxation for a 30-year period from the enactment of the.40 TIF Ordinance, and (iii) required the owners of the parcels in the Italian Village Tax Increment Financing Area to make annual service payments to the County Treasurer on or before the final dates for payment of real property taxes. In addition, pursuant to the.40 TIF Ordinance, the City has established the Italian Village East Municipal Public Improvement Tax Increment Equivalent Fund (Fund 418) (the Italian Village TIF Fund, and together with the Jeffrey Place TIF Fund, the TIF Funds ) into which the service payments in or in lieu of taxes and any applicable property rollback payments (the Italian Village TIF Revenues, and together with the Jeffrey Place TIF Revenues, the TIF Revenues ) are deposited. Pursuant to the Cooperative Agreement, the City has assigned the Italian Village TIF Revenues to the Authority, which shall be pledged to pay Bond Service Charges pursuant to the Trust Agreement. The Italian Village TIF Revenues are not pledged as security for the payment of Bond Service Charges on the 2013 Series B Bonds. See COOPERATIVE AGREEMENT and THE TRUST AGREEMENT. TIF Revenues. Factors such as the timing and amount of increases in tax valuation of the parcels in the Tax Increment Financing Areas, the timing of receipt of TIF Revenues, and changes in property tax rates in the Tax Increment Financing Areas could materially affect future results. Accordingly, no assurance is given that the specified levels of collections will be achieved in the future. See RISK FACTORS. Consistent with the TIF Statutes, the TIF Ordinances provide that the service payments will be made semiannually to the County Treasurer on or before the date on which real property taxes would otherwise be due and payable for the real property subject to the exemption granted pursuant to the TIF Ordinances. The TIF Statutes and TIF Ordinances further provide that the service payments shall be charged and collected in the same manner and in the same amount as real property taxes that would have been charged and payable against the improvement if it were not exempt from taxation. In addition, Section of the Ohio Revised Code provides that the obligation to pay service payments is treated in the same manner as the obligation to pay real property taxes for purposes of the tax lien securing real property taxes, including the priority and enforcement of the lien and the collection of service payments secured by the lien. [Balance of Page Intentionally Left Blank] 11

22 The following table shows the TIF Revenues for the Jeffery Place TIF and the Italian Village TIF since 2008: TIF Revenue Collections Year Italian Village Jeffrey Place 2008 $ 495,683 $ 128, * 1,375,530 89, ,110 42, ,677 75, , , ,797 93,655 TOTAL $5,225,950 $615,391 Source: City of Columbus * The large increase in revenues in the Italian Village TIF for 2009 represents back taxes from previous years that were paid during Collection of TIF Revenues. The collection of TIF Revenues, along with real property taxes levied by various taxing districts is the responsibility of the County. Real property taxes for a given year become a lien against the taxable property on January 1 of that year and are payable to the County Treasurer during the following year in two equal installments, the first usually in January and the second in June. The County then distributes the tax revenue to the respective taxing subdivisions, typically in February or March and July or August of each year. See RISK FACTORS Collection Procedures and Timing. Assigned Service Payments Under Cooperative Agreement. The Authority, the City and the Developer entered into a Tax Increment Financing and Cooperative Agreement, dated January 17, 2007, as amended and supplemented by the First Amendment to and Restatement of the Tax Increment Financing and Cooperative Agreement, dated February 1, 2014 (collectively, the Cooperative Agreement ), pursuant to which the City has assigned to the Authority the Assigned Service Payments collected and deposited into the City s TIF Funds. The Assigned Service Payments paid to the Authority by the City are from moneys in the TIF Funds specifically available and appropriated by the City for such purpose and are pledged to pay Bond Service Charges. The obligation of the City to pay the Assigned Service Payments to the Authority pursuant to the Cooperative Agreement is expressly made subject to the availability and appropriation of funds on deposit in the TIF Funds for such purpose. The City s obligation to pay the Assigned Service Payments to the Authority is binding only for the term of the Cooperative Agreement. See COOPERATIVE AGREEMENT General and Projects Assigned Service Payments. Notwithstanding the requirement to assign the Assigned Service Payments for payment of Bond Service Charges, the City has agreed that all such Assigned Service Payments required to pay Bond Service Charges will be included in the estimated budgets of the City, as provided in the Ohio Revised Code. See COOPERATIVE AGREEMENT General and Projects Assigned Service Payments. Community Development Charge General. Under the Act, the Authority has the power to require property owners within the District to pay a community development charge for the benefit and use of the Authority to cover all or a part of the cost of the acquisition, construction, operation and maintenance of land, land development and community facilities, and any other costs incurred by the Authority in the exercise of its powers. A 12

23 community development charge may be calculated on the basis of (i) assessed valuation of the real property in the District, (ii) the income of the residents of the District, (iii) a uniform fee on each parcel of real property in the District, or (iv) any combination of the foregoing bases. Pursuant to this statutory authority, the owners of the real property in the District have filed a Declaration of Covenants with the Franklin County Recorder on the real property within the District establishing the obligation of current and future landowners to pay the community development charge levied on parcels within the District on the basis of those parcels assessed valuation (the Charge ). As provided in the Act, the Charge is a covenant running with the land and is fully binding on behalf of and enforceable by the Authority against each person or entity owning property within the District and all successors and assigns of such person or entity. Once collected and received by the Authority, the Charge shall be deposited in the Community Development Charge Account and pledged for payment of the Bond Service Charges. Amount of the Charge; Maximum Charge. The Charge is calculated on the basis of the assessed valuation of each parcel of real property in the District. The Charge for each parcel within the District is generally equal to 50% of the assessed value for that parcel multiplied by the effective tax rate applicable to that parcel. The Charge for developed parcels is capped at 50% of the amount of the tax abatement granted for new development pursuant to Ordinance No passed the Columbus City Council on October 21, 2002, as amended by Ordinance No passed by the Columbus City Council on December 16, 2013 (together, the CRA Ordinance ). The CRA Ordinance grants a tax exemption on the increase in the assessed valuation resulting from improvements of or to real property. The effective term and percentage of the tax exemption within the District are 15 years in the amount of 100% of the assessed value of new buildings. In addition, the Charge for the parcels on which the new 276 unit apartment project and office and restaurant space is located in capped at $33,936 for calendar year 2014, $201,736 for calendar year 2015, $356,417 for calendar year 2016 and $358,173 for calendar year 2017 and thereafter. The Authority has covenanted in the Trust Agreement to levy and collect the Charge on each parcel within the District in an amount equal to the lesser of (i) the maximum level of Charge as described above or (ii) the amount necessary, together with the Assigned Service Payments, to pay Bond Service Charges on the Senior Bonds and any other Additional Bonds issued on parity with those Senior Bonds as such Bonds Service Charges become due and payable. The Authority expects to impose the Charge annually on each parcel. Collection of the Charge. Collection of the Charge is administered under the direction of the Authority s Board of Trustees and payable as determined by that Board. The Declaration permits the Authority to certify the Charge to be collected to the County Auditor by such date as will permit the collection of the Charge by the County. Under the Act, the Auditor is then required to enter any unpaid Charge on the tax list and duplicate of real property and certify such Charge to the County Treasurer for collection in the same manner and at the same time as real property taxes. The Charge is a lien on property against which they are charged from the date they are entered on the tax list. Half of the Charge certified with respect to each parcel will be collected with the real property tax payments due December 31 of each year (the First Half Collection Date) and the other half will be collected with the real property tax payments due June 20 of the following year (the Second Half Collection Date). These collection dates may be extended for up to one month upon the occurrence of certain conditions (generally the existence of a tax levy issue on a ballot in an election held after the first Monday in August). The State Tax Commissioner also has the power to extend the collection dates. The County generally extends the First Half Collection Date until January 20 but does not generally extend the Second Half Collection Date. Taxing authorities typically receive amounts collected on the First Half Collection Date in February or early March following the First Half Collection Date and the receive amounts collected on the Second Half Collection Date in July or early August following the Second Half Collection Date. However, these dates may be extended by a period of time equal to the extension of the First Half Collection Date and Second Half Collection Date, as applicable. Generally, the County will distribute the Charge collections to the Authority in late February or early March and late July or early August. See RISK FACTORS for a discussion of the risks associated with the Charge. 13

24 TRUST AGREEMENT All Bonds will be issued pursuant to and secured by the Trust Agreement, including a supplemental trust agreement for each series of Bonds. The General Bond Resolution is incorporated in and constitutes part of the Trust Agreement. The 2013 Series B Bonds will be issued pursuant to and secured by the Third Supplemental Trust Agreement. The 2013 Series B Resolution is incorporated in and constitutes part of the Third Supplemental Trust Agreement. Special Funds The Trust Agreement creates the following funds (collectively the Special Funds ): the Bond Service Fund, which contains (i) the Senior Bond Service Account, (ii) the Capitalized Interest Account, (iii) the Reserve Account, (iv) the Subordinate.40 TIF Bond Service Account, (iv) the Subordinate.41 TIF/Charge Bond Service Account, (v) the Subordinate.40 TIF Bond Reserve Account, and (vi) the Subordinate.41 TIF/Charge Bond Reserve Account; the Project Fund; the Revenue Fund, which contains (i) the Assigned Service Payment Account (and (a) the.40 TIF Subaccount and (b) the.41 TIF Subaccount) and (ii) the Community Development Charge Account; the Operating and Maintenance Fund; and the Surplus Fund, which contains (i) the.40 TIF Account, (ii) the.41 TIF Account and (iii) the Community Development Charge Account. The Authority has covenanted in the General Bond Resolution not to make or create (except as authorized or permitted therein) any pledge or assignment of or lien or encumbrance upon the Special Funds or the Pledged Receipts prior to or on a parity with the pledge under the Trust Agreement. See TRUST AGREEMENT Covenants of the Authority. The Trust Agreement also creates the Authority Operating Fund and the Rebate Fund, which are not Special Funds pledged to the repayment of Bonds. Flow of Funds The Authority has covenanted in the Trust Agreement that it will pay or cause to be paid directly to the Trustee for deposit in the Revenue Fund any and all Pledged Receipts (including the Charges and Assigned Service Payments) received by and for the account of the Authority. Upon receipt, such Pledged Receipts will be credited by the Trustee to the respective subaccounts of the Revenue Fund. The Trustee will distribute all amounts on deposit in the Revenue Fund within three business days of receipt as follows: first to the Senior Bond Service Account to the extent amounts on deposit therein are insufficient to pay interest on the Senior Bonds and any Additional Bonds issued on parity therewith on the next date scheduled therefor; 14

25 second to the Senior Bond Service Account to the extent amounts on deposit therein are insufficient to pay the principal of the Senior Bonds and any Additional Bonds issued on parity therewith on the next date scheduled therefor; third to the Senior Bond Reserve Account, an amount sufficient to make the balance in the Reserve Account equal to the Required Reserve for the outstanding Senior Bonds and any Additional Bonds issued on parity therewith; fourth to the Rebate Fund, any amounts necessary to make payments to the United States as calculated by the Authority and required under Section 148(f) of the Internal Revenue Code; fifth to the Authority Operating Fund, an amount sufficient to restore the balance therein to $35,000, provided that such deposits are limited to $35,000 in any calendar year; sixth to the bond service accounts and any reserve accounts for payment of Bond Service Charges on, or funding the required reserve with respect to, any Subordinate.40 TIF Bonds and any Additional Bonds issued on parity therewith, provided that any such deposit must be made from amounts on deposit in the.40 TIF Subaccount of the Assigned Service Payment Account; seventh to the Subordinate.41 TIF/Charge Bond Service Account and the bond service account for any Subordinate.40 TIF Bonds, pro rata based on the respective deposits necessary, for payment of Bond Service Charges on outstanding 2013 Series B Bonds and any Additional Bonds issued on parity therewith, provided that such deposits may not be made from amounts on deposit in the.40 TIF Subaccount of the Assigned Service Payment Account; eighth to the Subordinate.41 TIF/Charge Bond Reserve Account and the bond reserve account for any Subordinate.40 TIF Bonds, pro rata based on the respective deposits necessary, an amount sufficient to make the balance in the Subordinate.41 TIF/Charge Bond Reserve Account equal to the Required Reserve, provided that such deposits may not be made from amounts on deposit in the.40 TIF Subaccount of the Assigned Service Payment Account; ninth to the Operating and Maintenance Fund, an amount equal to the Authority s thencurrent operating and expense budget, less amounts previously deposited into the Operating and Maintenance Fund during the then-current Fiscal Year; provided, however, that any such amounts may not be funded from Assigned Service Payments; and tenth to the Surplus Fund, all remaining amounts, provided that such amounts are deposited from the respective subaccounts of the Revenue Fund into the respective subaccounts of the Surplus Fund. Surplus Fund Transfers Amounts in the Surplus Fund will be disbursed at any time to remedy any deficiency in the payments described in the list above, except that amounts in the Surplus Fund generated by the Italian Village TIF may not be used to pay Bond Service Charges on the 2013 Series B Bonds. Any balance remaining in the Surplus Fund on the fifth business day of each December may be transferred to the Project Fund or distributed by the Trustee to the Authority free of the lien of the Trust Agreement. Amounts in the Reserve Account for the Senior Bonds will be disbursed to remedy any deficiency in payments first and second stated above if amounts on deposit in the Bond Service Account are insufficient to make such payments on the fifth day prior to any payment of principal and interest on the Senior Bonds. Amounts in the Bond Service Account and the Reserve Account for the Senior Bonds may only be used to pay Bond Service Charges on the Senior Bonds, and any Additional Bonds issued on parity with those Bonds. 15

26 Additionally, upon the issuance of the 2013 Series A Bonds, any amounts currently on deposit in the Surplus Fund will be disbursed as follows: (1) $35,000 will be transferred to the Authority Operating Fund; and (2) any remaining amounts will be transferred to the Project Fund for further deposit into the accounts therein, in the respective amounts as the Authority deems appropriate; provided, however, that no amounts received by the Authority as collections under the City s.40 TIF Ordinance may be transferred into the Community Center Account. Transfers to the Bond Service Account for Senior Bonds In addition to transfers from the Surplus Fund as described above, on or prior to each interest payment date or principal payment date, the Trustee will transfer first from the Operating and Maintenance Fund and second from the Subordinate.41 TIF/Charge Bond Service Account and any other subordinate bond service accounts and reserve accounts, the amount, if any, necessary to fund the difference between the amount of Bond Service Charges due on the Senior Bonds on that interest payment date or principal payment date and the amount on deposit in the Senior Bond Service Account and available for payment of Bond Service Charges for the Senior Bonds on that date. Special Deposit of Assigned Service Payments into the Project Fund It is anticipated that Assigned Service Payments generated by payment of delinquent service payments collected pursuant to the.41 TIF Ordinance and attributable to tax year 2012 and earlier will be paid to the Trustee pursuant to the Cooperative Agreement. Immediately upon receipt, the Trustee must deposit the first $600,000 of those amounts into the Community Center Account of Project Fund; any of those amounts in excess of $600,000 must be applied as previously described in Flow of Funds. Investment of Funds Under present law and the bond proceedings, moneys held under the Trust Agreement may be invested in direct obligations of the United States of America; obligations, whether representing principal and interest or either principal or interest, guaranteed as to payment by the United States of America or to the payment of which the faith of the United States of America is pledged; obligations of the United States or any agency or instrumentality thereof (including certain funds consisting exclusively of those obligations); certificates of deposit which are eligible for investment under the Trust Agreement; and any no front end load money market fund that is rated at least A (or its equivalent) as provided in the Trust Agreement, provided those investments shall mature or be subject to redemption by and at the option of the holder not later than five years from the date of that investment. Earnings from investments will be credited to the respective account in from which the moneys were invested. Other Trust Agreement Provisions The Trust Agreement contains provisions as to bond authentication, registration, transfer, exchange and replacement, redemption, remedies upon default, duties of the Trustee, Bond Registrar, authenticating agents and paying agents (and their successors), supplemental trust agreements and defeasance, among others. Certain provisions of the Trust Agreement as to the issuance of additional bonds, events of default, remedies, enforcement by mandamus, defeasance, optional redemption, nonpresentment and supplemental trust agreements are summarized below. 16

27 Additional Bonds The Authority may issue bonds pursuant to the Trust Agreement from time to time in addition to the Senior Bonds (the Additional Bonds ) for the purposes only of: (i) financing additional costs of the Jeffrey Place redevelopment project (the Project ); (ii) refunding or advance refunding for any lawful purpose any then outstanding Bonds; or (iii) any combination of (i) or (ii). The Trustee will authenticate and deliver Additional Bonds when the Authority has furnished to the Trustee, among other items, the following: (a) A certificate of the Authority s Treasurer, that, to the best of that official s knowledge, the Authority is not on the date of issuance of those Additional Bonds, and by their issuance will not be, in default in the performance of any of its covenants provided in the Trust Agreement or any supplemental trust agreement; (b) A certificate of the Authority s Treasurer stating in the case of issuance of Additional Bonds to be issued on parity with the Senior Bonds, either that: (i) the Assigned Service Payments and Charge receipts for the complete Fiscal Year immediately preceding the issuance of those Additional Bonds, plus the amount of Assigned Service Payments to be received in any Fiscal Year as a result of the expiration of any real property tax abatements while those Additional Bonds remain outstanding, equals or exceeds, in each Fiscal Year that those Additional Bonds will be outstanding, 125% of the estimated Bond Service Charges on all Bonds on parity with those Additional Bonds including the Bond Service Charges on those Additional Bonds, or (ii) Peckham Guyton Albers & Viets, Inc. (see PROJECT REVENUE CONSULTANT), or any other recognized firm of independent management consultants knowledgeable and experienced in community planning, development programming and financing, financial feasibility and market studies, and cost/benefit analysis designated by the Authority with the consent of the Trustee (the Consultant ), forecasts that the amounts to be collected as Assigned Service Payments and the Charge, using the actual value of the Development as constructed and the same methodology in the PGAV Report attached hereto as APPENDIX B, will support the issuance of Additional Bonds at a coverage of 130% of the estimated Bond Service Charges on all Bonds on parity with those Additional Bonds including the Bond Service Charges on those Additional Bonds. (c) in the case of issuance of Additional Bonds that are subordinate to the Senior Bonds, a certificate of the Authority s Treasurer stating that either (i) the sum of: (A) the Assigned Service Payments and Charge receipts for the complete Fiscal Year immediately preceding the issuance of those Additional Bonds, plus (B) the amount of Assigned Service Payments to be received in any Fiscal Year as a result of the expiration of any real property tax abatements while those Additional Bonds remain outstanding, plus (C) any other amounts that, pursuant to the series resolution and supplemental trust agreement authorizing those Additional Bonds, are available to pay Bond Service Charges on those Additional Bonds, equals or exceeds, in each Fiscal Year that those 17

28 Additional Bonds will be outstanding, 100% of the estimated Bond Service Charges for all Bonds that will be outstanding after the issuance of those Additional Bonds, or (ii) the Consultant forecasts that the amounts to be collected as Assigned Service Payments and the Charge, using the actual value of the Development as constructed and the same methodology in the PGAV Report attached hereto as APPENDIX B, will equal or exceed, in each Fiscal Year that those Additional Bonds will be outstanding, 100% of the estimated Bond Service Charges for all Bonds and Bond Service Charges on all Bonds that will be outstanding after the issuance of those Additional Bonds. However, the Authority will not be required to deliver to the Trustee this certificate in connection with the issuance of Additional Bonds subordinate to the Senior Bonds (an Enhanced Series ) if all Bond Service Charges and the payment of the purchase price, if any, on that Enhanced Series is fully secured by an irrevocable letter of credit issued by a commercial bank which has a long term credit rating of not less than A by Standard & Poor s Ratings Service. The terms of an Enhanced Series may provide that the security of the letter of credit may be released while the Enhanced Series remains outstanding if the Authority s Treasurer delivers to the Trustee a certificate stating that the Assigned Service Payments for each of the two complete Fiscal Years immediately preceding the delivery of such certificate equaled or exceeded 100% of the estimated highest Bond Service Charges payable on all Bonds in any Fiscal Year. In making the calculations under paragraphs (b) and (c) above: (i) in the case of issuance of Additional Bonds for refunding any outstanding Bonds, payments on account of interest and principal maturities of such Additional Bonds shall be used in lieu of and to the exclusion of such payments on account of interest and principal maturities of the Bonds being refunded thereby; (ii) if any variable rate Bonds are outstanding immediately prior to the issuance of such Additional Bonds, an interest rate equal to the greater of 6% per annum or the average interest rate actually borne by such Bonds during the twenty-four (24) month period (or, if shorter, the period during which such Bonds were Outstanding) ended the end of the month next preceding the month in which such Additional Bonds are to be issued shall be used for estimating the interest requirements for such variable rate Bonds; (iii) all calculations of Bond Service Charges will be made net of capitalized interest available for the payment of such charges; and (iv) for purposes of estimating the payments of Bond Service Charges on any Additional Bonds required to be made following the issuance thereof, (A) if such Additional Bonds will bear interest at a variable rate, an interest rate for such Additional Bonds equal to the greater of 6% per annum or the average interest rate actually borne during the twenty-four (24) month period (or, if shorter, the period during which any variable rate Bonds were outstanding) ended the end of the month next preceding the month in which such Additional Bonds are to be issued, by all variable rate Bonds outstanding at the time of issuance of such Additional Bonds shall be used for estimating the interest requirements for such Additional Bonds, and (B) if such Additional Bonds have a final stated maturity of three years or less, level annual Bond Service Charges based upon an interest rate determined as set forth in clause (A) of this paragraph and a final maturity of the earlier to occur of a date that is 25 years after the date of issuance of such Additional Bonds or the date of the expiration of all TIF Exemptions (as defined in the TIF Ordinance) with respect to the Tax Increment Financing Area, shall be used. (d) In the case of Additional Bonds to be issued for the purpose of refunding or advance refunding outstanding Bonds or Interim Indebtedness, evidence satisfactory to the Trustee that: (i) provision has been made to assure that moneys sufficient to retire the Bonds to be refunded will be available in the possession of the Trustee at the time provided for the 18

29 retirement under the plan for refunding and are committed to the purpose; or (ii) if the Additional Bonds are in whole or in part to refund outstanding Bonds which at the time of issuance of the Additional Bonds will not be deemed to have been paid and discharged under the Trust Agreement, moneys sufficient to pay interest accrued and to accrue and any principal payable on the Additional Bonds prior to retirement of the Bonds to be refunded have been deposited in the appropriate account of the Bond Service Fund without impairment of any provision or covenant of the Trust Agreement and from sources other than the Revenue Fund and the Reserve Account (except to the extent of any moneys in excess of the balances required to be maintained in those Funds, the transfer of which for the purpose has been authorized), or will be deposited directly in the appropriate account of the Bond Service Fund from portions of the proceeds of the Additional Bonds pursuant to the authorizing ordinance. Proceeds of Additional Bonds will be allocated and deposited in the manner provided in the series resolution or supplemental trust agreement relating to those Additional Bonds. Events of Default; Remedies Each of the following is an Event of Default : (a) and payable; Failure of the Authority to pay any interest on any Bond, when and as the becomes due (b) Failure of the Authority to pay the principal or premium on any Bond, when due and payable, whether at maturity or by acceleration or call for redemption; and (c) Any other failure to perform or observe duly or punctually any other covenants, agreements or conditions contained in the Bonds or the Trust Agreement and to be performed by the Authority, which failure has continued for a period of 60 days after written notice of the failure to the Authority given by the Trustee or by the holders of not less than 25% in aggregate outstanding principal amount of the affected Bonds. The Trustee will not be required to take notice, and will not be deemed to have notice or knowledge, of any Event of Default described in subparagraph (c) above, unless the Trustee is notified by the Authority or by the holders of at least 10% of the aggregate outstanding principal amount of Bonds. In the absence of delivery of a notice satisfying those requirements, the Trustee may assume conclusively that there is no Event of Default as described in subparagraph (c). If an Event of Default occurs, the Trustee, within five days after having knowledge of that Event of Default, shall give written notice of that Event of Default to the Authority. The Trustee must give to the Bondholders, and to any other Paying Agents and Authenticating Agents, written notice by mail of each Event of Default known to the Trustee within 30 days after having knowledge of its occurrence, unless the Event of Default has been remedied or cured before the giving of that notice. Except in the case of an Event of Default described in subparagraph (a) or (b) above, the Trustee will be protected in withholding that notice if and so long as the Trustee in good faith determines that the withholding of that notice is in the interests of the Bondholders. Notice to the Bondholders will be given by mailing notice to all holders of Registered Bonds, as their names and addresses appear on the Register at the close of business 15 days prior to the mailing of that notice. 19

30 The Trust Agreement does not require the furnishing of periodic evidence to the Trustee as to the absence of defaults or Events of Default under the Trust Agreement or as to compliance with its terms. See TRUST AGREEMENT Covenants of the Authority. In the case of any Event of Default in the payment of Bond Service Charges, the Trustee must take those appropriate actions and, in addition, may apply to a court for the appointment of a receiver to receive and administer the applicable Pledged Receipts and to pay Bond Service Charges, and/or by notice in writing delivered to the Authority, declare the principal of and interest (and any accreted amount) accrued on all then outstanding Bonds immediately due and payable. Provision is made for the rescission of that declaration upon the payment or provision for payment of all amounts due, and for waivers in connection with Events of Default. Notwithstanding any provision of the Trust Agreement to the contrary, the Trustee may only declare amounts immediately due and payable with the written consent of, or at the written direction of, the holders of 25% in aggregate outstanding principal amount of the Senior Bonds. Upon the happening and continuance of any Event of Default described in (c) above, the Trustee may, and upon the written request of the holders of not less than 25% of the then outstanding Bonds shall, upon being properly indemnified, take appropriate actions, including mandamus, to enforce all the rights of the bondholders, bring suit on the Bonds and enjoin any unlawful activities or activities in violation of the bondholders rights. The holders of a majority in principal amount of the Bonds then outstanding have the right, by written instrument delivered to the Trustee, to direct the method and place of conducting any and all remedial proceedings under the Trust Agreement, provided that the direction is in accordance with the provisions of law and of that Trust Agreement and the Trustee is indemnified to its satisfaction. Before taking remedial action the Trustee may require that a satisfactory indemnity bond be provided for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability adjudicated to have resulted from the Trustee s negligence or willful misconduct by reason of any action so taken. The Trustee may act without this indemnity, in which case its expenses are reimbursable from moneys available for that purpose. The registered owners of the Bonds are not entitled to enforce the provisions of the Trust Agreement or to institute, appear in or defend any suit, action or proceeding to enforce any rights, remedies or covenants granted or contained in the Trust Agreement or to take any action with respect to any event of default under the Trust Agreement, except as provided in the Trust Agreement. Application of Moneys upon an Event of Default All moneys received by the Trustee or a receiver pursuant to any right given or action taken pursuant to an Event of Default, subject to certain restrictions, and after payment of the costs, expenses, liabilities and advances incurred or made by the Trustee or receiver, will be applied as follows: (a) Unless the principal of all the Bonds has become or has been declared due and payable pursuant to an Event of Default, all such moneys must be deposited to the funds and accounts as described in TRUST AGREEMENT Flow of Funds and moneys deposited into the bond service accounts and bond reserve accounts will be applied as follows: First: To the payment to the persons entitled thereto of all installments of interest then due on the Bonds payable from the applicable account, in the order of the maturity of the installments of that interest and beginning with the earliest maturity, and if the amount available is not sufficient to pay in full any particular installment, then to the payment 20

31 thereof ratably, according to the amounts due on that installment, to the persons entitled thereto, without any discrimination or privilege except as to any difference in the respective rates of interest specified in the Bonds; and Second: To the payment to the persons entitled thereto of the unpaid principal or accreted amount of any of the Bonds payable from the applicable account that have become due (other than Bonds previously called for redemption for the payment of which moneys are held pursuant to the provisions of this Agreement), whether at stated maturity, by redemption or pursuant to any mandatory sinking fund requirements, in order of their due dates and beginning with the earliest due date, with interest on the Bonds from the respective dates upon which they became due, and if the amount available is not sufficient to pay in full all Bonds due on any particular date, together with all such interest, then to the payment of the Bonds ratably, according to the amount of principal or accreted amount due on such date, to the persons entitled thereto without any discrimination or privilege. (b) If the principal and accrued accreted amount of all the Bonds has become due or has been declared due and payable pursuant to this Article, all such moneys must be deposited to the funds and accounts in the order as described in TRUST AGREEMENT Flow of Funds, except for any deposits to bond reserve accounts, and moneys in each bond service account and bond reserve account must be applied to the payment of the principal and accrued accreted amount and interest then due and unpaid upon the Bonds payable from that account, without preference or priority of principal or accreted amount over interest or of interest over principal or accreted amount, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond payable from that account, ratably, according to the amounts due respectively for principal, accreted amount and interest, to the persons entitled thereto without any discrimination or privilege except as to any difference in the respective rates of interest specified in the Bonds. (c) If the principal of all the Bonds has been declared due and payable pursuant to an Event of Default, and if that declaration thereafter has been rescinded and annulled, then moneys will be applied in accordance with the provisions of subparagraph (a) above. (d) Whenever moneys are to be applied pursuant to an Event of Default, those moneys will be applied at such times, and from time to time, as the Trustee determines, having due regard to the amount of moneys available for application and the likelihood of additional moneys becoming available for application in the future. Whenever the Trustee directs the application of those moneys, it will fix the date (which must be an interest payment date unless it deems another date more suitable) upon which such application is to be made and upon that date interest or accreted amount on the amounts of principal to be paid on that date, and for which moneys are available, ceases to accrue. Unless otherwise provided in a supplemental trust agreement, the Trustee will give such notice as it may deem appropriate of the deposit of any such moneys and of fixing of any such date, and the Trustee is not required to direct payment to the holder of any unpaid Bond until that Bond is presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Enforcement by Mandamus Pursuant to the Act and to the General Bond Resolution, the duties of the Authority and of its members, officers and employees, under the Bond proceedings are enforceable by mandamus. 21

32 Defeasance If all Bond Service Charges due or to become due on the Bonds are paid or caused to be paid, and provision is made for paying all other sums payable under the Trust Agreement by the Authority, then the Trust Agreement will terminate, and the covenants, agreements and other obligations of the Authority under it will be discharged and satisfied. Thereupon the Trustee will execute and deliver to the Authority any instruments to evidence that discharge as may be reasonably required by the Authority, and the Trustee and Paying Agents will deliver to the Authority any funds at the time subject to the lien of the Trust Agreement which may then be in their possession except for such funds held for the payment of Bond Service Charges (subject to the provisions for unclaimed moneys described below). The Bonds will be deemed to have been paid or caused to be paid for the purpose of defeasance (and for the purpose of particular Bonds being refunded and no longer deemed outstanding under the Trust Agreement) if: (a) the Trustee and Paying Agents, and the Authority, hold, in trust for and irrevocably committed thereto, sufficient moneys, or (b) the Trustee or Authority holds, in trust for and irrevocably committed thereto, noncallable Federal Securities (as defined below) certified by a firm of independent certified public accountants of national reputation to be of such maturities and interest payment dates and to bear such interest or other investment income as will be, without further investment or reinvestment of either the principal amount of or the interest earnings from them (likewise to be held in trust and committed, except as hereinafter provided), sufficient, together with any moneys referred to in (a) above, for the payment, at the maturity or redemption dates, of all applicable Bond Service Charges to the date of maturity or redemption as the case may be. If any Bonds are to be redeemed prior to their maturity, notice of that redemption must have been given or provision reasonably satisfactory to the Trustee must have been made for the giving of that notice. Any moneys held in cash by the Trustee or Authority in accordance with these provisions may be invested only in Federal Securities the maturities or redemption dates (at the holder s option) of which will coincide as nearly as practicable with, but will not be later than, the date or dates at which those moneys will be required for the purposes. Any income or interest earned by, or increment to, those investments, to the extent not required for the applicable purposes, will be transferred to the Authority, free of any trust or lien. The Trust Agreement authorizes partial defeasance as to any series of Bonds or as to certain of the Bonds of any series upon deposits described above. In addition, any series resolution may make separate or different provisions for defeasance of the Trust Agreement and the applicable Supplemental Trust Agreement as to some or all of the Bonds of that series. Federal Securities for purposes of defeasance means: (i) direct obligations of, or obligations representing principal and interest, or principal or interest, the full and timely payment of which is guaranteed by, or to the full and timely payment of which is pledged the faith of, the United States of America; (ii) any certificates or other evidence of direct ownership interest in obligations of the character described in clause (i) or in specified portions of those obligations, including, without limitation, portions consisting solely of the principal of or solely of the interest on those obligations; or (iii) obligations of any state of the United States or any political subdivision thereof, the full payment of principal of and interest and any premium on which are provided for by an irrevocable deposit in trust of the Federal Securities described in clause (i) or (ii), to the extent such investments are permitted by applicable law, and which 22

33 obligations carry the highest rating category of a rating service. With respect to Federal Securities described in clause (ii), the underlying obligations must be, as evidenced by a receipt held by the owner, held in safekeeping on behalf of the owner. Non-presentment of Bonds If a Bond is not presented for payment when due or an interest payment check is uncashed, and if moneys for the purpose of paying and sufficient to pay that amount have been made available to the Trustee for the benefit of the bondholder, all liability of the Authority to the holder for the payment will thereupon cease and be completely discharged. It is the duty of the Paying Agents to hold those moneys in trust, without liability for interest thereon, for the benefit of the registered owner of that Bond, who thereafter will be restricted exclusively to those moneys for any claim of whatever nature under the Trust Agreement or on or with respect to that Bond. Moneys so held by the Paying Agents and which remain unclaimed for three years after the due date of that Bond or that interest payment, will be paid to the Trustee and thereafter the holder may look only to the Trustee for payment and then only to the amounts so received by the Trustee (without any interest thereon) and the Paying Agents will have no further responsibility with respect to those moneys. Any moneys so paid to the Trustee will be credited to a special subaccount in the Bond Service Account, and the Trustee will keep a record of the amounts with respect to each series of Bonds so deposited in that special subaccount and will credit investment income from investments of those amounts to the general portion of that Bond Service Account. Supplemental Trust Agreements; Modifications A supplemental trust agreement is entered into in connection with the issuance of each series of Bonds providing for, among other things, the forms of those Bonds. The applicable series resolution is included in and constitutes part of that supplemental trust agreement. The Authority has authorized and will enter into the Third Supplemental Trust Agreement in connection with the 2013 Series B Bonds. See TRUST AGREEMENT - Additional Bonds. Supplemental trust agreements, other than those described above and in the next paragraph, modifying, altering, amending, adding to or rescinding any of the terms or provisions of the Trust Agreement, require the consent and approval of the owners of at least a majority in aggregate outstanding principal amount of the Bonds (excluding any owned by the Authority), except that (i) an extension of the maturity of any Bond s principal or interest, or a reduction in the principal amount of or the rate of interest or redemption premium on any Bond, or a reduction in the amount or extension of the time of any payment required by any mandatory sinking fund requirements, will require the consent of the holder of any affected Bond, and (ii) a reduction in the aggregate outstanding principal amount of the Bonds required for consent to that supplemental trust agreement will require the consent of the holders of all of the Bonds then outstanding. The Authority and the Trustee, without consent of or notice to any of the bondholders, may enter into supplemental trust agreements which, in the opinion of the Authority and the Trustee, are not inconsistent with the terms and provisions of the Trust Agreement: to cure any ambiguity, inconsistency or formal defect or omission in the Trust Agreement; to grant to or confer upon the Trustee for the benefit of the bondholders any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the bondholders or the Trustee; to subject additional revenues or receipts to the lien and pledge of the Trust Agreement; to add Authority covenants and agreements thereafter to be observed for the protection of the bondholders, or to surrender or limit any right, power or authority reserved to or conferred upon the Authority in the Trust Agreement, including the limitation of rights of redemption so that in certain instances Bonds of different series will be redeemed in some prescribed relation to one another; to evidence any succession to the Authority and the assumption by that successor of the 23

34 Authority s covenants and agreements in the Trust Agreement and the Bonds; to permit the transfer of Bonds from one securities depository to another; in connection with the issuance of Bonds in accordance with General Bond Resolution; to permit compliance with changes in federal or state securities or tax laws or regulations; to permit the exchange of Bonds, at the option of the holders, for coupon Bonds payable to bearer; to permit the Trustee to comply with any obligations imposed upon it by law; to specify further the duties and responsibilities of, and to define further the relationship among, the Trustee and any other Authenticating Agent, Bond Registrar or Paying Agent; to permit the withdrawal of Bonds from a securities depository and the issuance of replacement bonds in fully registered form to other than a securities depository; to limit the eligible investments of moneys, or to add to that list other eligible investments ( but if there is such a rating service at the time, the addition of eligible investments must be approved for the purpose by each rating service); to make such provisions as may be appropriate in connection with interest rate swaps, caps or other hedges; or to issue options pertinent to the purchase or redemption of Bonds, and any other amendment which in the Trustee s judgment (i) is not to the prejudice of the Trustee or holders of any outstanding Bonds which that amendment may affect, or (ii) in certain cases is consented to and approved by the owners of at least a majority in aggregate outstanding principal amount of the Bonds which that amendment affects. Covenants of the Authority In addition to other covenants, the Authority has covenanted in the General Bond Resolution to pay or cause to be paid promptly Bond Service Charges from the sources provided in that Resolution; not to make or create (except as authorized or permitted by that Resolution for Additional Bonds) any prior or parity pledge or assignment of or lien or encumbrance upon the Bond Service Fund or Pledged Receipt; subject to the limitations described herein under ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments, that prior to the delivery of any series of obligations it will determine the amount of Assigned Service Payments necessary to satisfy the projected Bond Service Charges of such series of obligations and will enter into such valid and legally enforceable agreement or agreements to cause such Assigned Service Payments to be collected at such times and in such amounts which will provide amounts sufficient and appropriate to pay when due all Bond Service Charges outstanding; to faithfully observe and perform all agreements, covenants, undertakings, stipulations and provisions contained in the General Bond Resolution, the Trust Agreement, the applicable Bond proceedings, and any and every outstanding series of bonds executed, authenticated and delivered under the Trust Agreement; to permit the Trustee, original purchasers and representatives of holders of 25% of the principal amount of the Bonds to inspect at all reasonable times the records, books, and accounts relating to the Trust Agreement and Special Funds and Accounts; and to waive the benefit or advantage of any stay or extension law which may affect the covenants and agreements in the General Bond Resolution, the Trust Agreement, the applicable Bond proceedings, the Bonds and any Additional Bonds. Trustee The Trustee, U.S. Bank National Association, is a national bank association organized and existing under the laws of the United States, and is authorized to exercise corporate trust powers in the State of Ohio. The Trustee is affiliated with banks throughout the State and, through its corporate trust office in Columbus, Ohio, regularly acts as trustee for revenue bond issues of Ohio local governments. 24

35 COOPERATIVE AGREEMENT General The Cooperative Agreement entered into between the Authority, the City and the Developer contains the terms and conditions under which the Assigned Service Payments received by the City will be paid to the Authority for the term of the Cooperative Agreement. The Cooperative Agreement was entered into in conjunction with the issuance of the 2006 Series A Bonds, and will be supplemented in conjunction with the issuance of the 2013 Series A Bonds to account for the replacement TIF related to the parcels owned by the Developer. Cooperative Agreement Term The Cooperative Agreement will remain in full force and effect until the later of (i) the expiration of the tax exemption granted in the.41 TIF Ordinance, (ii) the expiration of the tax exemption granted in the.40 TIF Ordinance, (iii) such date when bonds issued pursuant to the Trust Agreement no longer remain outstanding or (iv) such time as all sums payable by the City under the Cooperative Agreement have been paid. Assigned Service Payments The Authority will finance the Project through the issuance of the Bonds. In consideration of those undertakings by the Authority, the City shall pay to the Authority the Assigned Service Payments within sixty (60) business days after its receipt of the Assigned Service Payments. Payment of Assigned Service Payments by the City to the Authority is subject to appropriation by the City. The City s obligation under the Cooperative Agreement to pay to the Authority the Assigned Service Payments shall be a limited special obligation of the City to be made solely from Assigned Service Payments. The obligations of the City under the Cooperative Agreement are not and shall not be secured by an obligation or pledge of any moneys raised by taxation and do not and shall not represent or constitute a debt or pledge of the faith and credit or taxing power of the City, and neither the Developer, the Authority nor any other person shall have any right to have taxes levied by the City for the payment of the Assigned Service Payments. The City shall have no obligation to use or apply to the payment of the Assigned Service Payments any funds or revenues from any other source other than the Assigned Service Payments. Any payment to the Authority of TIF Revenues deposited into the TIF Funds is subject to the expenditure restrictions and appropriation of the City. Under the Cooperative Agreement, the City has covenanted to include in its annual budget those amounts in the TIF Funds constituting Assigned Service Payments. During the term of the Cooperative Agreement, the City will take such further actions as may be necessary or appropriate to appropriate and maintain the moneys received from the collection of TIF Revenues in accordance with the Cooperative Agreement. Obligations Unconditional The obligation of the City to make the Assigned Service Payments solely from the moneys received by the City from the TIF Revenues is absolute and unconditional, and the City will make such payments without abatement, diminution, or deduction regardless of any cause or circumstances whatsoever including, without limitation, any defense, set-off, recoupment, or counterclaim which the City may have or assert against the Authority or anyone acting by or on behalf of the Authority, the Developer, or any other person. Certain obligations of the City under the Cooperative Agreement have 25

36 been established as duties specifically enjoined by law and resulting from an office, trust, or station upon the City within the meaning of Section of the Ohio Revised Code and are enforceable by mandamus. THE DISTRICT AND AUTHORITY Creation and Amendment of the District; Powers of the Authority The Act provides for the creation of so-called new community districts. Section of the Act states: This chapter is enacted for the purposes of encouraging the orderly development of well planned, diversified and economically sound new communities and of encouraging the initiative and participation of private enterprise in such undertakings; and encouraging cooperation between the developer and the community authority to carry out a new community development program. In connection with the creation of a new community district, the Act requires the establishment of a new community authority, as a body corporate and politic in the State, which acts through a board of trustees. The Act contemplates that a developer and the community authority will cooperate in carrying out a new community development program, defined by the Act as a program for the development of a new community characterized by well-balanced and diversified land use patterns and which includes land acquisition and land development, the acquisition, construction, operation and maintenance of community facilities, and the provision of certain services. Under the Act, proceedings for the organization of a new community authority are initiated by a developer filing a petition with the clerk of the board of county commissioners of a county in which all or part of the proposed new community district is located, with that petition to include the name of the proposed new community authority, the address of the principal office of the new community authority, a map and full and accurate description of the boundaries of the new community district, and a preliminary economic feasibility analysis. On October 21, 2002, a petition (the Petition) for the establishment of The Jeffrey Place New Community Authority was filed with the Columbus City Council and the Board of County Commissioners of Franklin County, after approval of that Petition by the City of Columbus, Ohio as a proximate city under the Act. By its Resolution No. 0050X-2004 enacted on March 8, 2004, the Columbus City Council determined that the proposed new community district is conducive to the public health, safety, convenience and welfare, and that it is intended to result in the development of a new community as described in the Act. The Authority was thereby organized as a body corporate and politic in the State. The District consists of approximately 41 acres of land located east of Fourth Street, south of First Avenue, west of I-71, and north of I-670, and is coextensive with the Jeffrey Place Tax Increment Financing Area. See THE DEVELOPER AND THE DEVELOPMENT Development for a map of the District. The powers of the Authority include, among others: the power to acquire by purchase, agreement, gift, or otherwise, on such terms and in such manner as it considers proper, real and personal property or any estate, interest, or right therein, within or without the new community district; the power to fix, alter, impose, collect and receive service and user fees, rentals, and other charges to cover all costs in carrying out the new community development program; the power to sue and be sued in its corporate name; the power to employ such managers, administrative officers, agents, engineers, architects, attorneys, contractors, subcontractors, and employees as may be appropriate in the exercise of the rights, powers and duties conferred upon it; the power to make and enter into all contracts and agreements and execute all instruments relating to a new community development program; the power to apply for and accept grants, loans or commitments of guaranty or insurance, including any guarantees of community authority bonds and notes from the United States, the state or other public body or other sources; the power to maintain 26

37 such funds or reserves as it considers necessary for the efficient performance of its duties; the power to prepare plans for acquisition and development of lands and facilities, and enter into agreements with city, county or regional planning commissions to perform or obtain all or any part of planning services for the new community district; the power to issue new community authority bonds and notes and community authority refunding bonds payable solely from the income source provided in Section of the Act unless the bonds are refunded by refunding bonds for the purpose of paying any part of the cost as applied to the new community development program or parts thereof; and the power to enforce any covenants running with the land of which it is the beneficiary. Under the Act, the Authority does not possess power or authority over zoning, subdivision regulation, provision of fire or police protection, water supply, or sewage treatment and disposal. Board of Trustees All powers of a new community authority are exercised by its board of trustees. Pursuant to Section of the Act, the Columbus City Council, by its Ordinance No enacted on July 24, 2006, determined that the Authority s Board of Trustees should be composed of seven members selected as follows: the Columbus City Council appoints three members of the Board of Trustees to represent the interests of present and future residents of the District, and one member to serve as a representative of local government; and the Developer appoints three members to serve on the Board of Trustees as representatives of the Developer. The members of the Board of Trustees currently serve without compensation. are: The current members of the Board of Trustee and their appointing authority and terms of service Name Member Type Term Ends Vocation in Private Life Brian R. Barrett 3 Developer 07/31/2014 Real estate developer Matthew Hansen Appointed Citizen 07/31/2014 Executive Director, University District Org./University Community Business Ass. Tamara Maynard Appointed Citizen 07/31/2014 Attorney Erin Prosser 1 Appointed Citizen 07/31/2015 Director of Community Relations, Campus Partners, The Ohio State University Eric C. Wagenbrenner Developer 07/31/2014 Real estate developer Mark A. Wagenbrenner 2 Developer 07/31/2015 Real estate developer William P. Webster Local Gov. Rep. 07/31/2015 Deputy Director of Development, City of Columbus, Department of Development Officers: 1 Chair 2 Vice-Chair 3 Treasurer Dissolution of Authority When the new community development program has been completed and all legal indebtedness of the Authority has been discharged or provided for, the Authority will take all steps necessary for its dissolution in accordance with the provisions of Section of the Act. When the new community development program is complete but prior to the time that all legal indebtedness of the Authority has been discharged, the Authority will limit its actions to those actions required to service its outstanding legal indebtedness and fully comply with any legal requirements relating to that outstanding indebtedness, including but not limited to any requirements in the proceedings for any bonds or notes issued pursuant to Sections through of the Act. 27

38 THE DEVELOPER AND THE DEVELOPMENT The following information as to the Developer has been provided by the Developer for use in this Private Placement Memorandum. The Authority makes no representation regarding the completeness or accuracy of this information. The Developer is not a guarantor, for the benefit of holders of the 2013 Series B Bonds, of the payment or collection of Assigned Service Payments within the Tax Increment Financing Area or Charges on any property within the District. Developer Jeffrey New Day, LLC (the Developer ), an affiliate of Wagenbrenner Development Inc. ( Wagenbrenner ), an Ohio Corporation, will use its resources in connection with the completion of the Development. Wagenbrenner is a real estate development company engaged in the ownership, development, management and acquisition of commercial and residential real estate. Wagenbrenner specializes in identifying underutilized or abandoned properties and restoring them with the goal being to achieve the highest and best use. Recent large-scale developments include: Harrison Park A residential development consisting of approximately 345 units constructed on the site of a former margarine plant located just north of the City s downtown and within two miles of the Development. The Harrison Park project employed many of the same financial incentives used in Jeffrey Place, securing over $80 million in public and private investment to date. Grant Park A 600+ unit development on the former site of Columbus Coated Fabrics, located approximately one-half mile north of the Development. Wagenbrenner is the development leader of a collaboration of community partners in the revitalization of the Weinland Park neighborhood, which collaboration includes: the Campus Partners (wholly owned non-profit development corporation of The Ohio State University), the City of Columbus, The Columbus Foundation and the J.P. Morgan Chase Foundation. Over $140 million of investment has been made to date in the Weinland Park initiative, with an additional $100 million+ planned and underway. Gowdy Field A 400,000+ square foot, $70 million office campus, located just north of the City s downtown and on the site of a former landfill. A joint venture between Wagenbrenner and the Daimler Group, Gowdy Field was finished in 2010 and is home to Time Warner s regional headquarters, The Ohio State University Eye and Ear Institute, and the Stephanie Spielman OSU Comprehensive Breast Center. Development The Development is located just north of downtown Columbus and has direct access to transportation routes that connect the surrounding suburbs and other cities throughout the State to downtown Columbus; including Interstate I-70, I- 71, I-270 and I-670 and the major City thoroughfares of Fifth Avenue to the north, and Fourth Street, High Street and Route 315 to the west. As reflected on the map below the Development is located: Immediately northeast of the Convention Center Immediately east of the City s Short North Arts District Immediately northeast of the Arena District 28

39 Development Plan. The Development consists of the redevelopment of approximately forty-one acre former manufacturing site located immediately north of downtown Columbus in the Italian Village neighborhood and in an area easily walkable to the City s Arena District and the Short North Arts District. As described below, public-private partnerships with the State of Ohio and the City of Columbus support the Development. Original Development Plan The original development plan included approximately 1,100 residential units, 200,000 square feet of retail and commercial office space, structured parking and over four acres of dedicated parks. The total market value of the original development, projected to be completed in stages from 2007 to 2010, was expected to be approximately $400,000,000. Included as part of the original development was a public infrastructure construction plan including water, sewer and storm sewer improvements; road, sidewalk and streetscape improvements; parks and recreation improvements; with acquisition of real estate and interests in that property all improved to City public works standards. In total, the original public infrastructure budget was $18,050,000 as part of the estimated total $400,000,000 project investment. Only a fraction of the original development plan, 41 residential units and certain of the public infrastructure improvements, was completed before the original developer, National Community Builders, abandoned the project in 2013, including (i) Courtyard Townhomes, completed in 2009, consisting of a three-story brick and limestone townhomes built in a courtyard plan with a total of 11 units, and (ii) Jeffery Lofts, a 30-unit residential building completed in

40 Updated Development Plan After the Developer acquired the development site in 2013, an updated development plan was established to complete the Development in phases. The first phase of the new plan for Development calls for 276 market-rate apartments, 176 townhomes, a community center, a restaurant and commercial office space. In connection with these private improvements, the Developer will also complete a number of infrastructure improvements as part of the first phase of the Development, including: Modifying and installing sanitary and storm lines to accommodate new vertical construction; Constructing surface parking to accommodate commercial and residential needs; Constructing new streets and installing street lights and street signs; and Constructing parks and green space; detailed landscaping, and pedestrian and cyclist friendly amenities. Public-Private Partnerships. The following is a list of City of Columbus actions and designations in support of the Development: Community Reinvestment Area (CRA) Designation: In 2002, the City of Columbus included the Development in one of its community reinvestment areas. In 2013 the City of Columbus amended the terms of this community reinvestment area, thereby providing for a 100% real property tax abatement on new housing and certain commercial buildings within the Development for 15 years. These abatements are the basis for which the Charge is calculated, which Charge makes up a portionof the Pledged Receipts. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Community Development Charge. Tax Increment Financing: In 2002, the City of Columbus established the Jeffrey Place Tax Increment Financing Area and the Italian Village Tax Increment Financing Area, the revenues from which are assigned to the Authority under the Cooperative Agreement, which Assigned Service Payments constitute a portion of the Pledged Receipts. In 2013, the City of Columbus amended the ordinance creating the Jeffrey Place Tax Increment Financing Area to extend the tax increment financing program available to unimproved parcels within the Development for 30 years. In 2013, the City also amended the ordinance creating the Italian Village Tax Increment Financing Area to expand the purposes for which TIF receipts collected there under could be expended. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Tax Increment Financing. New Community Authority (NCA): In 2006, the City of Columbus gave final approval to the creation of the Authority with its focus on the Development and with the power to levy and collect the Charge to be used in support of the Development. City and State Grants: In 2002, the City of Columbus and State of Ohio provided $3,800,000 in grants and loans to assist with the Development, including a $3,000,000 pass-through grant from the State of Ohio for environmental remediation of the Development site, a $500,000 grant from the State of Ohio and a $300,000 grant from the City of Columbus for infrastructure improvements. 30

41 Introduction Sources and Uses for Project. The following is a list of sources and uses for the Project: The Jeffrey Place New Community Authority Estimated Sources and Uses; Jeffrey Park Project Jeffrey Place New Community Authority: 2013 Series A Bonds Proceeds (1) $ 7,250,000 Jeffrey Place New Community Authority: 2013 Series B Tax Exempt Developer Bonds (1) 3,026, Surplus Fund and 2013/2014 PILOT Collections: Cash Deposits 1,734,147 Total Sources $ 12,010,147 Jeffrey Place New Community Authority: 2013 Series A Bonds Related Uses Purchase of Public Lands $ 5,785,000 Park Improvements 475,000 Finish Existing Streets 201,173 Sidewalks 222,200 Street Lights 426,000 New Road Construction 140,627 Jeffrey Place New Community Authority: 2013 Series B Developer Bonds Related Uses: Community Center 3,026, Surplus Fund and 2013/2014 PILOT Collections: Cash Deposit Uses Community Center 1,174,453 Sanitary & Storm Line Replacement 445,000 Signal Improvements 32,000 Plans & Specs 82,694 Total Uses $ 12,010,147 (1) Net of all costs of issuance, debt service reserve deposit and insurance premium estimate. Subject to change based on market conditions. FINANCIAL MATTERS The Authority s fiscal year corresponds with the calendar year. The primary sources of Authority revenue are (1) the Assigned Service Payments received pursuant to the Cooperative Agreement with the City and (2) the Charge. In addition, the Authority may impose and collect service and user fees, rentals and other charges to cover all costs in carrying out the new community development program. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE - Community Development Charge. The Authority may also receive gifts and grants. The responsibilities for the major financial functions of the Authority are shared by the Treasurer and the Board of Trustees. The Board of Trustees appoints the Treasurer to oversee the financial affairs of the Authority, including the keeping and supervision of all Authority accounts and the custody and disbursements of all Authority funds and moneys. Investments and deposits of Authority funds are governed by the Uniform Depository Law (Chapter 135 of the Ohio Revised Code) applicable to Ohio subdivisions, and by certain resolutions. The Treasurer is responsible for those investments and deposits. Authority funds may be invested in, may be 31

42 made in, among others, certificates of deposit and United States Government Treasury and agency securities. Other important financial functions include general financial recommendations and planning by the Board of Trustees; annual budget preparation by the Treasurer with the assistance of the Board of Trustees; and express approval of budgets and expenditures by the Board of Trustees. Financial Reports and Examinations of Accounts The Authority is required to maintain its accounts, appropriations and other fiscal records in accordance with the procedures established and prescribed by the Auditor of State (the Auditor). The Auditor is charged by law with the responsibility of inspecting and supervising the accounts and records of each Ohio subdivision and most public agencies and institutions. The Authority will maintain a system of accounting established and administered in accordance with accounting principles generally accepted in the United States of America applicable to government entities and consistently applied. Audits are made by the Auditor or by CPAs at the direction of the Auditor pursuant to Ohio law. No other independent examination or audit of the Authority s financial records is required to be made. The Auditor has not previously audited the Authority. PROJECT REVENUE CONSULTANT Peckham Guyton Albers & Viets, Inc. (PGAV), is serving as project revenue consultant for the 2013 Series B Bonds. PGAV has successfully completed hundreds of similar assignments ranging in size from single parcel redevelopment projects in small communities to strategic planning efforts for major municipalities. PGAV is headquartered in St. Louis, Missouri and specializes in community planning, development programming and financing, financial feasibility and market studies, cost/benefit analysis, site selection, master planning, site design, and grant writing. PGAV has prepared the revenue study attached as APPENDIX B. PGAV has provided the statements in this paragraph, and the Authority makes no assertion as to their accuracy. RISK FACTORS An investment in the 2013 Series B Bonds is subject to a number of risks. The following is a discussion of certain risks that could affect payment of Bond Service Charges. This discussion should be read in conjunction with all other parts of this Private Placement Memorandum and is not, and should not be considered as, a complete description of all risks that could affect payment of Bond Service Charges. Prospective purchasers should analyze carefully the information contained in this Private Placement Memorandum, including the Appendices thereto, and additional information in the form of the complete documents summarized herein. THE 2013 SERIES B BONDS WILL ONLY BE SOLD TO ACCREDITED INVESTORS AS DEFINED IN THE SECURITIES ACT OF 1933, AS AMENDED, AND EACH PURCHASER OF THE 2013 SERIES B BONDS WILL BE REQUIRED TO SIGN AND DELIVER AN INVESTOR LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS APPENDIX E AS A CONDITION OF PURCHASE OF THE 2013 SERIES B BONDS. 32

43 Assumptions and Projections The forecasted market absorption and pricing of the Development contained in the PGAV Report and included or reflected in this Private Placement Memorandum are based on various assumptions concerning facts and events over which the Authority and the Developer have no control. The PGAV Report is attached hereto as APPENDIX B. No representation or warranty is or can be made about the amount or timing of any future income, loss, occupancy, valuation, increased assessment or revenues, or whether those actual results will be consistent with the PGAV Report or with the forecasts contained therein. The information in the PGAV Report is based on various assumptions, estimates and opinions. There is no assurance that actual events will correspond with the projections or the assumptions, estimates and opinions on which they are based. The PGAV Report is forward-looking and involves certain assumptions and judgments regarding future events. Although the PGAV Report is based on currently available information, it is also based on assumptions about the future state of the national and regional economy and the local real estate markets as well as assumptions about future actions by various parties, none of which can be assured or guaranteed. The PGAV Report cannot predict or offer any assurances that a certain level of performance will be achieved or that certain events will occur. The actual results will vary from the PGAV Report, and the variations may be material. Prospective owners of the 2013 Series B Bonds should read the PGAV Report carefully and form their own opinions about the validity and reasonableness of such assumptions. Information concerning the Tax Increment Financing Area, the District and the Project has been obtained from the Developer and other sources believed to be reliable, but much of that information involves predictions of future events, such as completion of the Development within the Developer s anticipated completion schedule and within the Developer s projected budget, sale or rental of the developed project and the ability of property owners to pay TIF payments and the Charge. Such information, by its nature, is based on assumptions, estimates and expectations and is not subject to verification. A delay in or failure to achieve any of these future events may have an adverse impact on the amount of TIF Revenues generated within the Tax Increment Financing Area and the amount of Charges collected on the property within the District, resulting in a possible default in the payment of Bond Service Charges. Future legislation, regulations, governmental or judicial interpretation of regulations or legislation or practices and procedure related to property tax assessment, levy, collections or distributions could have a material effect on the calculation or availability of the Assigned Service Payments and the Charges collected or distributed. Failure to Complete the Development The Development has been undertaken by the Developer and those parties contracting with the Developer. The Development is subject to economic considerations affecting the Developer and the third-party builders that may buy the lots from the Developer, including interest rates and the general economic climate of the region surrounding the Tax Increment Financing Area and the District. The failure to complete the Development or substantial delays in the completion of the Development due to insufficient funds, litigation, weather conditions, unforeseen site conditions, the inability or failure of builders to purchase the developed lots or other causes will adversely impact the amount and timing of TIF Revenues generated within the Tax Increment Financing Area and the amount of Charges collected on the property within the District and available to pay Bond Service Charges on the 2013 Series B Bonds. Owners of the 2013 Series B Bonds should assume that any event that significantly impinges on the ability of the Developer to complete the Development will result in a delay in the availability of TIF 33

44 Revenues from the Tax Increment Financing Area and the amount of Charges collected on the property within the District, and possibly a default in the payment of Bond Service Charges on the 2013 Series B Bonds. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments; Community Development Charge. Lack of Rating and Market for the 2013 Series B Bonds At the time of issuance, the 2013 Series B Bonds have not received a credit rating by any rating agency. The absence of a rating could adversely affect the ability of Bondholders to sell their 2013 Series B Bonds or the price at which their 2013 Series B Bonds can be sold. The 2013 Series B Bonds are subject to changes in value due to changes in the condition of the tax-exempt and taxable municipal bond markets and changes in the financial position of the Authority. The 2013 Series B Bonds are not readily liquid, and no person should invest in the 2013 Series B Bonds with funds such person may need to convert readily into cash. Bondholders should be prepared to hold their 2013 Series B Bonds to the stated maturity date. The Placement Agent will not be obligated to establish a market for the 2013 Series B Bonds, and no representation is made concerning the existence of any secondary market for the 2013 Series B Bonds. No assurance can be given that any secondary market will develop following the completion of the offering of the 2013 Series B Bonds and no assurance can be given that any investor will be able to sell any of the 2013 Series B Bonds at a price equal to or greater than the price at which they were purchased. None of the Authority, the Trustee or any other person will be required to register the 2013 Series B Bonds under the Securities Act, qualify the 2013 Series B Bonds under the securities laws of any state or provide registration rights to any purchaser. Purchase of a 2013 Series B Bond should be considered a long-term investment and one with significant risks. The 2013 Series B Bonds are being offered only to a limited number of accredited investors. Each initial investor will be required to represent in an investment letter that it has read this Private Placement Memorandum and has obtained any other information it desired for the purpose of evaluating the risks of purchasing the 2013 Series B Bonds. See APPENDIX E Form of Investment Letter. Sufficiency of Assigned Service Payments and Charges The sufficiency of the Assigned Service Payments and the Charge are dependent upon the assessed valuation of property within the Tax Increment Financing Area and the District, real property tax collection procedures, delinquency procedures, tax rates and the structure of the real property tax system of Ohio. Neither the Authority nor the City has direct control over these items. Changes to any of these items may adversely affect the sufficiency of the Assigned Service Payments and Charges, and therefore payment of Bond Service Charges. There is no assurance that current conditions will persist, and neither the Authority nor the City is able to increase real property tax rates to increase the amount of the Assigned Service Payments or Charges to make up for any Bond Service Charge shortfalls. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments; Community Development Charge. Appropriation of Assigned Service Payments The obligation of the City to make Assigned Service Payments to the Trustee pursuant to the Cooperative Agreement is expressly subject to annual appropriations for such purpose. The City s obligation to make Assigned Service Payments is binding only for the one-year period for which each annual appropriation is made. None of the Trustee, the Authority, or any bondholder has any right to require appropriations by the Columbus City Council for payment of Assigned Service Payments. See COOPERATIVE AGREEMENT Assigned Service Payments. 34

45 Level of Assessed Valuation; Valuation Challenges There can be no assurance that the assessed value of the Tax Increment Financing Area and the District will equal or exceed the assessed value forecasted in the PGAV Report. See APPENDIX B. Even if the assessed value is initially determined as forecasted in the PGAV Report, there can be no assurance that such assessed value will be maintained throughout the term of the 2013 Series B Bonds. Assessed valuation may be reduced by the effects of natural or man-made disasters, or by a downturn in the real estate market, among other things. If at any time during the term of the 2013 Series B Bonds the actual assessed value is less than forecasted, the amount of the TIF Revenues and Charges will likely be less than forecasted and the amounts of the Assigned Service Payments and the Charge may not be sufficient to pay Bond Service Charges on the 2013 Series B Bonds. Further, landowners have the right to appeal the assessed property values. If any such appeal is not resolved prior to the time when real estate taxes, service payments and Charges are due, the taxpayer may pay the taxes, service payments and Charges under protest. In such event, that portion of TIF service payments and Charges being protested will not be available for deposit. If the appeal is resolved in favor of the taxpayer, the assessed value will be reduced and, in addition, the taxpayer may be entitled to a refund with respect to service payments and Charges paid during such appeal with the result, in each case, that Assigned Service Payments and Charges may be less than forecasted. The assessed values contained in the PGAV Report are based on the current status of the national and local business economy and assume a future performance of the commercial and residential real estate market similar to the historical performance of such market in the metropolitan Columbus area. Changes in real estate market conditions in the Columbus metropolitan area, as well as changes in general or local economic conditions, could adversely affect the value of the property in the Tax Increment Financing Area and the District and, consequently, the amount of Assigned Service Payments. Insufficiency of Pledged Receipts Under the Cooperative Agreement, the City is to pay the Assigned Service Payments to the Authority, and under the Trust Agreement the Authority is required to levy the Charge as is necessary to pay Bond Service Charges, subject to the maximum charge limitation. While the Authority believes the Assigned Service Payments to be received, along with the Charge, will be sufficient to pay Bond Service Charges on the 2013 Series B Bonds, there is no assurance that the amounts of the Assigned Service Payments and the Charge will be sufficient, and the Authority is unable to increase the amount of the Assigned Service Payments or increase the Charge beyond the maximum charge limitations. There is also no assurance that the amount of the Assigned Service Payments received or the amount of the Charge collected will at all times be sufficient to pay the amounts required to be paid by the Trust Agreement. For example, delays in payment of the Assigned Service Payments and in collection or foreclosure of Charge liens could result in insufficient funds being available to pay timely on the 2013 Series B Bonds after the depletion of the Reserve Account. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments; Community Development Charge; RISK FACTORS Delinquencies and Delinquency Procedures. Collection Procedures and Timing The Assigned Service Payments are collected as part of the County s real property tax collection process. Real property taxes (and Assigned Service Payments) for a given year become a lien against the taxable property on January 1 of that year and are payable to the County Treasurer during the following year in two equal installments, the first usually in January and the second usually in June. The County distributes the tax revenue (and Assigned Service Payments) collected in January and June to the 35

46 respective taxing subdivisions, typically in March and August of each year, respectively. This typical real property tax collection and distribution timing may, however, be extended under certain circumstances. There could be a delay or reduction in payments to holders of the 2013 Series B Bonds if real property tax collection and distribution timing is delayed. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments; Community Development Charge. Risks Associated With Generation of TIF Revenues and Charges Prospective investors should carefully consider, among other factors, the risks associated with the projection and ultimate generation of Assigned Service Payments in the Tax Increment Financing Area and the Charge within the District. See ASSIGNED SERVICE PAYMENTS AND COMMUNITY DEVELOPMENT CHARGE Assigned Service Payments; Community Development Charge. These risks include, but are not limited to, the following: The PGAV Report assumes no substantial change in the basis of extending, levying and collecting real property taxes. The County s method used to assess properties in the Tax Increment Financing Area may be altered resulting in a potentially reduced or altered valuation in a particular year or succession of years. In addition, the State equalization factor or multiplier is subject to change annually by the State. Any reduction in assessed valuation or the State multiplier could have a material adverse effect on the amount of Assigned Service Payments derived from the Tax Increment Financing Area and the Charge derived from the District. Any change in the current system of collection and distribution of real property taxes in the County, including without limitation the reduction or elimination of any such tax, judicial action concerning any such tax or voter initiative, referendum or action with respect to any such tax, could adversely affect the availability of Assigned Service Payments and the Charge to pay the principal of and interest on the 2013 Series B Bonds. There can be no assurance that the current system of collection and distribution of the real property taxes in the County will not be changed by any competent authority having jurisdiction to do so, including without limitation the State, the County, the courts or the voters. The County calculates property tax rates for numerous funds of a number of taxing districts that tax all or part of the property in the Tax Increment Financing Area. A reduction in the tax levies by the affected taxing districts may have a material adverse effect on the amount of Assigned Service Payments and Charges available for payment of Bond Service Charges on the 2013 Series B Bonds. Such a reduction in rates could be the result of the governing body of the taxing district s desire to lower tax rates, taxpayer initiative, or in response to state or local litigation or legislation affecting the broader taxing structure within the taxing district, such as litigation or legislation affecting the primary reliance on ad valorem property taxes to fund elementary and secondary education in the State. The PGAV Report assumes that tax levies will remain the same throughout the course of the development of the Project. If tax levies would decline from their current rate, there could be a significant adverse impact on the amount of Assigned Service Payments and Charges derived from the Tax Increment Financing Area. Further changes may be made in the real property tax system by the State or the County. Such changes could include various property tax rollbacks, abatements, exemptions, changes in the ratio of assessment, or other relief measures, limitations on the amount or percent of increase in tax levies by taxing districts, or other measures that would limit the tax levy amount that could be extended to the property within the Tax Increment Financing Area and, consequently, the projected Assigned Service Payments and Charges generated. 36

47 Failure by the County to remit property taxes to the Authority on a timely basis could result in insufficient Assigned Service Payments and the Charge being available to pay Bond Service Charges on the 2013 Series B Bonds as they come due. The repayment of the principal of and interest on the 2013 Series B Bonds is dependent on the collection of Assigned Service Payments in amounts, together with the Charge, sufficient to meet the Bond Service Charges requirements on the 2013 Series B Bonds. The collection of those Assigned Service Payments and the Charge depends in large part on the payment by the property owners located within the boundaries of the Tax Increment Financing Area and the District. To the extent that one or more of the taxpayers within the Tax Increment Financing Area or the District would be unwilling or unable to pay their tax bills in a timely fashion, the ability of the Authority to pay principal and interest on the 2013 Series B Bonds could be adversely affected. No assurance can be given that the County, on behalf of the Authority, will be able to collect the Assigned Service Payment and the Charge levied or that such collections, if made, will be made in a timely fashion. Delinquencies and Delinquency Procedures The unwillingness or inability of the landowners to pay any portion of the tax billings then due and owing which relate to a parcel within the Tax Increment Financing Area and the District could result in a foreclosure action or sale of the tax lien by the County Treasurer. Delinquent Charges may also be collected by the Authority under the Act and the Declaration by instituting a contract action against the property owner in the same manner, to the same extent (including the appointment of a receiver, foreclosure sale and, where appropriate, deficiency judgment) and subject to the same procedures as in the case of foreclosure of a real property mortgage under the laws of Ohio. In the event that a landowner is delinquent in the payment of TIF Revenues or the Charge, then foreclosure of property, tax lien sale by the County Treasurer or contractual action by the Authority is necessary. There could be a delay in payments to holders of the 2013 Series B Bonds pending the resolution of foreclosure proceedings, tax lien sales or contractual actions and receipt by the Authority of the proceeds of such proceedings and actions. Additionally, while the current and anticipated future practice of the County Treasurer is to sell the tax lien for 100% its value, there is no guarantee that the County Treasurer will not sell the tax lien for less than 100% of its value in the future. If the County Treasurer does sell a tax lien for less than 100% of its value, the amount of the Charge the Authority will receive with respect to such property will be proportionally reduced and the Authority will have to pursue a contractual action against the delinquent Landowner to recover any remaining unpaid Charge. There could be a delay in payments to holders of the 2013 Series B Bonds pending the resolution of such Authority action. If the Charge is not paid with respect to one parcel, the Declaration does not permit the Charge with respect to other parcels in the District to be revised to correct for such non-payment. The Developer is not a guarantor, for the benefit of holders of the 2013 Series B Bonds, of payment on any property within the District and is not liable for payment of any Charges except to the extent that it is a landowner during periods in which the Charge is levied. The collection of delinquent Assigned Service Payments and Charges is subject to the County s delinquent real property tax collection process. The unwillingness or inability of the property owners to pay any portion of their property tax bills then due could result in a foreclosure action or tax lien sale by the County Treasurer. The County Treasurer determines, in its sole discretion, whether and at what times to pursue foreclosure or tax lien sale for delinquent parcels. Five percent of all delinquent taxes and assessments collected are deposited in the delinquent tax and assessment fund held by the County 37

48 Treasurer and five percent are retained by the County and transferred to the County s land bank agency, the Central Ohio Community Improvement Corporation. While the current and anticipated future practice of the County Treasurer is to sell a tax lien for 100% its value, there is no guarantee that the County Treasurer will not sell a tax lien for less than 100% of its value in the future. If the County Treasurer does sell a tax lien for less than 100% of its value, the amount of Assigned Service Payments and Charges with respect to such property will be proportionally reduced. Prior to the commencement of foreclosure proceedings or a tax lien sale, a property owner may enter into a delinquent tax contract with the County Treasurer for the payment of delinquent taxes and Assigned Service Payments and Charges certified to the County for collection. The delinquent tax contract will provide for payments of delinquent and unpaid amounts in installments over a period not to exceed five years. The number of installments, the amount of each installment and the schedule of payment are determined by the County Treasurer. However, a taxpayer who owns and occupies residential real property may request a payment period of no fewer than two years. If any installment is not paid when due, the delinquent tax contract becomes void. Additional delinquent tax contracts are available at the discretion of the County Treasurer. Certain military members called to active duty may apply for a similar contract. Payments under those contracts will be made beginning the seventh month after the member s duty terminates. The ability to foreclose the lien of delinquent unpaid Assigned Service Payments and Charges may be limited with regard to properties in which the FDIC acquires an interest. If a lender takes a security interest in the property and becomes insolvent, that lender could fall under the jurisdiction of the FDIC. The FDIC has adopted policies regarding the payment of state and local property taxes, including real estate and non-real estate special taxes and assessments. While the FDIC has acknowledged a policy of paying real estate and non-real estate special taxes and assessments in certain circumstances, it has also indicated an intention to assert federal preemptive power to challenge any prior taxes, special taxes and assessments where it is in its interest to do so, including the requirement that local agencies obtain the consent of the FDIC in order to foreclose the lien of special taxes. If consent of the FDIC is required in order to foreclose on property on which Assigned Service Payments or Charges are levied, such consent could be denied, potentially preventing any foreclosure proceedings. Additionally, although the FDIC has agreed to attempt to respond to a request for consent to foreclose within days, obtaining consent will delay the foreclosure proceedings. In addition to delays in initiating any foreclosure proceeding, potential investors should be aware that judicial foreclosure proceedings are not summary remedies and can be subject to significant procedural and other delays caused by crowded court calendars and other factors beyond the control of the County, the Authority or the City. Foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors rights or by the laws of the State relating to judicial foreclosure. In the event that foreclosures of property or tax lien sales are necessary, or in the event the County Treasurer enters into a delinquent tax agreement with the property owner, there could be a delay or reduction in the payment of Bond Service Charges. 38

49 Disclosure to Future Property Purchasers As required under the Act, owners of real property within the District have recorded the Declaration for the real estate included in the District in the Office of the County Recorder of Franklin County, Ohio, prior to the delivery of the Senior Bonds, which Declaration describes the Charge imposed on property within the District. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Charge obligation in the purchase of a parcel within the District or the lending of money thereon. Any failure on the part of a prospective lender or purchaser to determine the existence of the covenant to pay such Charges may affect the willingness and ability of such future owner to pay the Charges when due. FORWARD-LOOKING STATEMENTS Certain statements included in or incorporated by reference in this Private Placement Memorandum that are not purely historical are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21 E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended, and reflect the Authority s and the Developer s current expectations, hopes, intentions or strategies regarding the future. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. INCLUDED IN SUCH RISKS AND UNCERTAINTIES ARE (i) THOSE RELATING TO THE POSSIBLE INVALIDITY OF THE UNDERLYING ASSUMPTIONS AND ESTIMATES, (ii) POSSIBLE CHANGES OR DEVELOPMENTS IN SOCIAL, ECONOMIC, BUSINESS, INDUSTRY, MARKET, LEGAL AND REGULATORY CIRCUMSTANCES, AND (iii) CONDITIONS AND ACTIONS TAKEN OR OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING CUSTOMERS, SUPPLIERS, BUSINESS PARTNERS AND COMPETITORS, AND LEGISLATIVE, JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES AND OFFICIALS. ASSUMPTIONS RELATED TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE, AND MARKET CONDITIONS AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY. FOR THESE REASONS, THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PRIVATE PLACEMENT MEMORANDUM WILL PROVE TO BE ACCURATE. UNDUE RELIANCE SHOULD NOT BE PLACED ON FORWARD-LOOKING STATEMENTS. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PRIVATE PLACEMENT MEMORANDUM ARE BASED ON INFORMATION AVAILABLE TO THE AUTHORITY ON THE DATE HEREOF, AND THE AUTHORITY DOES NOT ASSUME ANY OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS IF OR WHEN THEIR EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR OR FAIL TO OCCUR. 39

50 LITIGATION To the knowledge of the Authority officials signing this Private Placement Memorandum, no litigation or administrative action or proceeding is pending or threatened restraining or enjoining, or seeking to restrain or enjoin, the issuance and delivery of the 2013 Series B Bonds, or the payment of Assigned Service Payments pursuant to the Cooperative Agreement between the Authority and the City to pay the Bond Service Charges on any of the Bonds, including the 2013 Series B Bonds, or contesting or questioning the proceedings and authority under which the 2013 Series B Bonds have been authorized and are to be issued, sold, signed or delivered, or the validity of the 2013 Series B Bonds. The Authority will deliver to the Placement Agent a certificate to that effect at the time of original delivery of the 2013 Series B Bonds. LEGAL OPINION Certain legal matters incident to the issuance of the 2013 Series B Bonds and with regard to the tax-exempt status of the interest on the 2013 Series B Bonds (see TAX MATTERS) are subject to the opinion of Squire Sanders (US) LLP, whose legal services as Bond Counsel have been retained by the Authority. The signed legal opinion of Bond Counsel, substantially in the form attached hereto as APPENDIX A, dated and premised on law in effect on the date of issuance of the 2013 Series B Bonds, will be delivered on the date of issuance of the 2013 Series B Bonds. The text of the opinion to be delivered may vary from the text as set forth in APPENDIX A if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of it by recirculation of this Private Placement Memorandum or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referred to in the opinion subsequent to its date. The opinion of Bond Counsel and any other legal opinions and letters of counsel to be delivered concurrently with the delivery of the 2013 Series B Bonds express the professional judgment of the attorneys rendering the opinions or advice regarding the legal issues and other matters expressly addressed therein. By rendering a legal opinion or advice, the giver of such opinion or advice does not become an insurer or guarantor of the result indicated by that opinion, or the transaction on which the opinion or advice is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. Bond Counsel has drafted those portions of this Private Placement Memorandum under the captions THE 2013 SERIES B BONDS (excluding the information under Bond Service Requirements and Projected Coverage Levels), SECURITY AND SOURCES OF PAYMENT and TAX MATTERS. Bond Counsel has assisted the Authority with its preparation of certain other portions of this Private Placement Memorandum. Bond Counsel, however, has not been engaged to, and will not, independently confirm or verify that information or any other information provided by the Authority or others, and will not express an opinion as to the accuracy, completeness or fairness of any such information or any other reports, financial information, offering or disclosure documents or other information pertaining to the Bonds that may be prepared or made available by the Authority or others to potential or actual purchasers of the Bonds, to owners of the Bonds, including Beneficial Owners, or to others. In addition to rendering the legal opinion, Bond Counsel will assist in the preparation of and advise the Authority concerning documents for the bond transcript. Squire Sanders (US) LLP also serves as counsel for various entities in which certain principals of the Developer are involved on matters unrelated to the Development or the Authority. 40

51 Certain legal matters will be passed upon for the Placement Agent by their counsel, Bricker & Eckler LLP and certain legal matters will be passed upon for the Developer by Frost Brown Todd, LLC. TAX MATTERS In the opinion of Squire Sanders (US) LLP, Bond Counsel, under existing law: (i) interest on the 2013 Series B Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the Code ), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; and (ii) interest on, and any profit made on the sale, exchange or other disposition of, the 2013 Series B Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. Bond Counsel expresses no opinion as to any other tax consequences regarding the Bonds. The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the Authority and Developer contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the 2013 Series B Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the Authority s or Developer s certifications and representations or the continuing compliance with the Authority s or Developer s covenants. The opinion of Bond Counsel is based on current legal authority and covers certain matters not directly addressed by such authority. It represents Bond Counsel s legal judgment as to exclusion of interest on the 2013 Series B Bonds from gross income for federal income tax purposes but is not a guaranty of that conclusion. The opinion is not binding on the Internal Revenue Service ( IRS ) or any court. Bond Counsel expresses no opinion about (i) the effect of future changes in the Code and the applicable regulations under the Code or (ii) the interpretation and the enforcement of the Code or those regulations by the IRS. The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations. Noncompliance with these requirements by the Authority or the Developer may cause loss of such status and result in the interest on the 2013 Series B Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the 2013 Series B Bonds. The Authority and the Developer have each covenanted to take the actions required of it for the interest on the 2013 Series B Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. After the date of issuance of the 2013 Series B Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel s attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the 2013 Series B Bonds or the market value of the 2013 Series B Bonds. A portion of the interest on the 2013 Series B Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the 2013 Series B Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain 41

52 taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the 2013 Series B Bonds. Bond Counsel will express no opinion regarding those consequences. Payments of interest on tax-exempt obligations, including the 2013 Series B Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If a 2013 Series B Bond owner is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes. Bond Counsel s engagement with respect to the 2013 Series B Bonds ends with the issuance of the 2013 Series B Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the Developer or the owners of the 2013 Series B Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the 2013 Series B Bonds, under current IRS procedures, the IRS will treat the Authority as the taxpayer and the beneficial owners of the 2013 Series B Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the 2013 Series B Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the 2013 Series B Bonds. Prospective purchasers of the 2013 Series B Bonds upon their original issuance at prices other than the respective prices indicated on the inside cover of this Private Placement Memorandum, and prospective purchasers of the 2013 Series B Bonds at other than their original issuance, should consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion. Risk of Future Legislative Changes and/or Court Decisions Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the 2013 Series B Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the 2013 Series B Bonds will not have an adverse effect on the tax status of interest or other income on the 2013 Series B Bonds or the market value or marketability of the 2013 Series B Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the 2013 Series B Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. For example, recent presidential and legislative proposals would eliminate, reduce or otherwise alter the tax benefits currently provided to certain owners of state and local government bonds, including proposals that would result in additional federal income tax on taxpayers that own tax-exempt obligations if their incomes exceed certain thresholds. Investors in the 2013 Series B Bonds should be aware that any such future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the 2013 Series B Bonds for federal income tax purposes for all or certain taxpayers. In such event, the market value of the 2013 Series B Bonds may be adversely 42

53 affected and the ability of holders to sell their 2013 Series B Bonds in the secondary market may be reduced. The 2013 Series B Bonds are not subject to special mandatory redemption, and the interest rates on the 2013 Series B Bonds are not subject to adjustment in the event of any such change. risks. Investors should consult their own financial and tax advisers to analyze the importance of these Original Issue Discount and Original Issue Premium Certain of the 2013 Series B Bonds ( Discount Bonds ) may be offered and sold to the public at an original issue discount ( OID ). OID is the excess of the stated redemption price at maturity (the principal amount) over the issue price of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond (i) is interest excluded from the owner s gross income for federal income tax purposes to the same extent, and subject to the same considerations discussed above, as other interest on the 2013 Series B Bonds, and (ii) is added to the owner s tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. The amount of OID that accrues each year to a corporate owner of a Discount Bond is taken into account in computing the corporation s liability for federal alternative minimum tax. A purchaser of a Discount Bond in the initial public offering at the price for that Discount Bond stated on the inside cover of this Private Placement Memorandum who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond. Certain of the 2013 Series B Bonds ( Premium Bonds ) may be offered and sold to the public at a price in excess of their stated redemption price at maturity (the principal amount). That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner s gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Bond, the owner s tax basis in the Premium Bond is reduced by the amount of bond premium that is amortized during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond in the initial public offering at the price for that Premium Bond stated on the inside cover of this Private Placement Memorandum who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond. Owners of Discount and Premium Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID or bond premium properly accruable or amortizable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID and bond premium for purposes of state and local taxes on, or based on, income. 43

54 PLACEMENT AGENT The 2013 Series B Bonds are being placed with purchasers by Stifel Nicolaus & Company, Incorporated (in such capacity, the Placement Agent) on behalf of the Authority pursuant to the terms of a bond placement agreement. The Authority will pay the Placement Agent a fee of $, for placement of the 2013 Series B Bonds. The Placement Agent has provided the information in this Private Placement Memorandum pertaining to the Offering Prices and Bond Service Charges on the 2013 Series A Bonds and the 2013 Series B Bonds. NO RATING The Authority has not applied for a rating for the 2013 Series B Bonds. The absence of a rating could affect the ability of owners of the 2013 Series B Bonds to sell their 2013 Series B Bonds or the price at which their 2013 Series B Bonds can be sold. The 2013 Series B Bonds are not readily liquid, and no person should invest in the 2013 Series B Bonds with funds such person may need to convert readily into cash. Bondholders should be prepared to hold their 2013 Series B Bonds to the stated maturity date. The Placement Agent is not obligated to establish a market for the 2013 Series B Bonds, and no representation is made concerning the existence of any secondary market for the 2013 Series B Bonds. No assurance can be given that any secondary market will develop following the completion of the offering of the 2013 Series B Bonds and no assurance can be given that any investor will be able to sell any of the 2013 Series B Bonds at a price equal to or greater than the price at which they were purchased. None of the Authority, the Trustee or any other person will be required to register the 2013 Series B Bonds under the Securities Act of 1933, as amended, qualify the 2013 Series B Bonds under the securities laws of any state or provide registration rights to any purchaser. Purchase of a 2013 Series B Bond should be considered a long-term investment and one with significant risks. TRANSCRIPT AND CLOSING DOCUMENTS A complete transcript of proceedings and a certificate (described under LITIGATION) relating to litigation will be delivered by the Authority when the 2013 Series B Bonds are delivered by the Authority to the Placement Agent. The Authority at that time will also provide to the Placement Agent a certificate, signed by the officials who sign this Private Placement Memorandum and addressed to the Placement Agent, relating to the accuracy and completeness of this Private Placement Memorandum. CONTINUING DISCLOSURE The Authority and the Developer have agreed, pursuant to a Continuing Disclosure Agreement (the Continuing Disclosure Agreement ), for the benefit of the holders and beneficial owners of the 2013 Series B Bonds, to provide or cause to be provided financial information, operating data and notices of certain events. Failure to comply with any undertaking contained in the Continuing Disclosure Agreement will not constitute an event of default under the 2013 Series B Bonds. See APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT for specific provisions regarding the obligations of the Authority and Developer to provide continuing disclosure. In connection with the 2006 Series A Bonds, the Authority and National Community Builders, Inc., the previous developer of the property encompassed by the Authority, have failed to comply in material respects with their respective continuing disclosure requirements. Six of the previous seven members of the Authority Board responsible for continuing disclosure are no longer with the Authority and have been replaced. The Authority is currently in compliance with its continuing disclosure requirements and intends to comply 44

55 with all continuing disclosure requirements going forward. The Authority does not expect National Community Builders, Inc. to comply with its continuing disclosure obligation in connection with the 2006 Series A Bonds. Pursuant to the Continuing Disclosure Agreement, the Authority and Developer have agreed to provide financial information and operating data to the Municipal Securities Rulemaking Board (the MSRB ) in an electronic format, if required, and to provide notice of the enumerated events to the MSRB in an electronic format, if required. The performance by the Authority of its obligations under the Continuing Disclosure Agreement will be subject to the annual appropriation of any funds that may be necessary to perform it. The Continuing Disclosure Agreement will terminate upon repayment or defeasance of the 2013 Series B Bonds in full accordance with the Trust Agreement. CONCLUDING STATEMENT To the extent that any statements made in this Private Placement Memorandum involve matters of opinion or estimates, whether or not expressly stated to be such, they are made as such and not as representations of fact or certainty and no representation is made that any of those statements have been or will be realized. Information in this Private Placement Memorandum has been derived from official and other sources and is believed by the Authority to be accurate and reliable. Information other than that obtained from official records of the Authority has not been independently confirmed or verified by the Authority and its accuracy is not guaranteed. Neither this Private Placement Memorandum nor any statement that may have been or that may be made orally or in writing is to be construed as or as part of a contract with the original purchasers or subsequent owners of the 2013 Series B Bonds or book entry interests in those Bonds. This Private Placement Memorandum has been prepared and delivered by the Authority and executed for and on behalf of the Authority by the officials identified below. THE JEFFREY PLACE NEW COMMUNITY AUTHORITY By: By: Chair Treasurer 45

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57 APPENDIX A TEXT OF LEGAL OPINION February, 2014 To: The Jeffrey Place New Community Authority Columbus, Ohio Stifel Nicolaus & Company, Incorporated Columbus, Ohio We have served as bond counsel to our client the Jeffrey Place New Community Authority (the Authority) and not as counsel to any other person in connection with the issuance by the Authority of its 3,700,000 * Jeffrey Place Subordinate Redevelopment Bonds, 2013 Series B (the 2013 Series B Bonds) dated the date of this letter. The Series B Bonds are issued pursuant to Chapter 349 of the Ohio Revised Code and the Master Trust Agreement dated as of January 1, 2007 (the Master Trust Agreement), between the Authority and U.S. Bank National Association, as trustee (the Trustee), as supplemented, including by the First Supplemental Trust Agreement dated as of January 1, 2007 (the First Supplemental Trust Agreement), the Second Supplemental Trust Agreement dated as of February 1, 2014 (the Second Supplemental Trust Agreement), and the Third Supplemental Trust Agreement dated as of February 1, 2014 (the Third Supplemental Trust Agreement and, together with the Master Trust Agreement, the First Supplemental Trust Agreement and the Second Supplemental Trust Agreement, the Trust Agreement), between the Authority and the Trustee. Certain rights of the Authority in (i) payments to be received from the City of Columbus (the Assigned Service Payments) pursuant to the Tax Increment Financing and Cooperative Agreement dated January 17, 2007, as amended and restated by the First Amendment to and Restatement of Tax Increment Financing and Cooperative Agreement dated as of February 1, 2014 (together, the Cooperative Agreement), and (ii) the community development charge to be levied and collected by the Authority pursuant to Section of the Ohio Revised Code (the Charge, and together with the Assigned Service Payments, the Pledged Receipts), have been assigned by the Authority to the Trustee in the Trust Agreement. Capitalized terms not otherwise defined in this letter are used as defined in the Trust Agreement. In our capacity as bond counsel, we have examined the transcript of proceedings relating to the issuance of the 2013 Series B Bonds, a copy of the signed and authenticated 2013 Series B Bond of the first maturity, the Trust Agreement, the Cooperative Agreement and such other documents, matters and law as we deem necessary to render the opinions set forth in this letter. Based on that examination and subject to the limitations stated below, we are of the opinion that under existing law: 1. The 2013 Series B Bonds, the Trust Agreement and the Cooperative Agreement are valid and binding obligations of the Authority, enforceable in accordance with their respective terms. 2. The 2013 Series B Bonds constitute special obligations of the Authority, and the principal of and interest on the 2013 Series B Bonds (collectively, debt service), together with debt service on any other obligations issued or to be issued and outstanding on a parity with the 2013 Series B Bonds as provided in the Trust Agreement, are payable from and secured solely by Pledged * Preliminary, subject to change. A-1

58 Receipts and amounts on deposit in the Special Funds available for the payment of debt service on the 2013 Series B Bonds; provided, however that the 2013 Series B Bonds are fully subordinate to the Senior Bonds issued under the Master Trust Agreement and are not secured by any Assigned Service Payments generated pursuant to the.40 TIF Ordinance (the Assigned Service Payments from the Italian Village TIF). The 2013 Series B Bonds are not general obligations of the Authority and do not constitute a debt, or a pledge of the faith and credit, of the State of Ohio or of any political subdivision thereof, and the holders thereof have no right to have taxes levied by the Ohio General Assembly or the taxing authority of the City of Columbus, Ohio, or any other political subdivision of the State for the payment of the debt service thereon. 3. Interest on the 2013 Series B Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the Code) and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, portions of the interest on the 2013 Series B Bonds earned by certain corporations may be subject to a corporate alternative minimum tax. Interest on, and any profit made on the sale, exchange or other disposition of, the 2013 Series B Bonds are exempt from all Ohio state and local taxation, except the estate tax, the domestic insurance company tax, the dealers in intangibles tax, the tax levied on the basis of the total equity capital of financial institutions, and the net worth base of the corporate franchise tax. We express no opinion as to any other tax consequences regarding the 2013 Series B Bonds. The opinions stated above are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. In rendering all such opinions, we assume, without independent verification, and rely upon (i) the accuracy of the factual matters represented, warranted or certified in the proceedings and documents we have examined, and (ii) the due and legal authorization, execution and delivery of those documents by, and the valid, binding and enforceable nature of those documents upon, any parties other than the Authority. In rendering those opinions with respect to the treatment of the interest on the 2013 Series B Bonds under the federal tax laws, we further assume and rely upon compliance with the covenants in the proceedings and documents we have examined, including those of the Authority. Failure to comply with certain of those covenants subsequent to issuance of the 2013 Series B Bonds may cause interest on the 2013 Series B Bonds to be included in gross income for federal income tax purposes retroactively to their date of issuance. The rights of the owners of the 2013 Series B Bonds and the enforceability of the 2013 Series B Bonds, the Trust Agreement and the Cooperative Agreement are subject to bankruptcy, insolvency, arrangement, fraudulent conveyance or transfer, reorganization, moratorium and other laws relating to or affecting creditors rights, to the application of equitable principles, to the exercise of judicial discretion, and to limitations on legal remedies against public entities. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the 2013 Series B Bonds, the Trust Agreement or the Cooperative Agreement. The opinions rendered in this letter are stated only as of this date, and no other opinion shall be implied or inferred as a result of anything contained in or omitted from this letter. Our engagement as bond counsel with respect to the 2013 Series B Bonds has concluded on this date. Respectfully submitted, A-2

59 APPENDIX B PGAV REPORT B-1

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63 CITY OF COLUMBUS, OHIO Redevelopment Revenue Bonds, 2013 Series A and 2013 Series B Jeffrey Park Project Prepared For: Stifel, Nicolaus & Company Incorporated January 20, 2014 ST. LOUIS, MISSOURI B-1

64 Redevelopment Revenue Bonds TABLE OF CONTENTS Columbus, Ohio SECTION/SUB-SECTION TITLE PAGE NUMBER SECTION 1 INTRODUCTION The TIF District and the Redevelopment Project... 1 Basis for Projections... 2 Conflicts of Interest... 4 Payment to PGAV... 4 Other Work for Issuer or Obligor... 4 SECTION 2 LOCAL ECONOMIC CHARACTERISTICS Columbus Overview... 5 Housing Market Analysis... 7 SECTION 3 REVENUE PROJECTIONS Overview of Available Revenue Sources Collections and Delinquencies Property Assessment and Real Property Tax Rates Property Assessment Real Property Tax Rates Property Credits Tax Reduction Factors Homestead Exemption Term of TIF District and Timing of Revenue Flows Tax Revenue Assumptions District Base Value Revenue Projections for Development Revenue Bonds /20/2014

65 Redevelopment Revenue Bonds Columbus, Ohio SECTION 4 CONDITIONS AND ASSUMPTIONS Redevelopment Project Real Property Tax Rates Assessed Value Appeals Failure to Pay Continued Public Support Court Action Competent Staff Support Natural Disasters Economic and Market Stability APPENDIX Plate 1 Boundary Map Plate 2 Area Neighborhood Map Plate 3 New Jeffrey Place TIF Boundaries 01/20/2014

66 Redevelopment Revenue Bonds SECTION 1 INTRODUCTION Columbus, Ohio INTRODUCTION Stifel, Nicolaus & Company, Incorporated (the Underwriter ) retained the Planners group of Peckham Guyton Albers & Viets, Inc. ( PGAV ) to develop an independent analysis of the revenue generation potential of the hereinafter described redevelopment finance programs (this Report ) with respect to the Jeffrey Place TIF and New Community Authority ( NCA ) located within the corporate limits of the City of Columbus, Ohio (the City ). PGAV, headquartered in St. Louis, Missouri, is a nationally recognized firm with expertise in the preparation of bond feasibility studies. PGAV has performed analyses of historic trends and projections of real property taxes, sales taxes and taxes associated with various types of tax increment financing districts and other special taxing districts in support of bond financings. Recent locations where PGAV has been involved with financial feasibility analyses include St. Louis, Missouri; Manchester, Missouri; Arnold, Missouri; Columbus, Ohio; Chicago, Illinois; Memphis, Tennessee; Omaha, Nebraska; Oklahoma City, Oklahoma; Naples, Florida; and Champaign County, Illinois. PGAV has personnel who are members of the National Federation of Municipal Analysts ( NFMA ). John Brancaglione, Vice President of PGAV in charge of the Planners group, is a member of the Council of Development Finance Agencies ( CDFA ). THE TIF DISTRICT AND THE REDEVELOPMENT PROJECT In order to promote economic growth and to induce new private investment, the City, pursuant to Ordinance adopted on April 8, 2002 and amended by Ordinance on July 22, 2013 (the TIF Ordinance ), approved the creation of a tax increment financing area (the Jeffrey Place TIF ) pursuant to Ohio Revised Code Sections , and (the.41 TIF Act ). On October 28, 2002, the City, pursuant to Ordinance amended via Ordinance adopted September 9, 2013, designated certain properties within the Italian Village Neighborhood as a.40 TIF (the Italian Village TIF, together with the Jeffrey Place TIF, the TIFs ) pursuant to Ohio Revised Code Sections , and (the.40 TIF Act ). Through the adoption of tax increment financing, certain revenues (as hereinafter defined) have been made available to assist in the implementation of the Redevelopment Project (as hereinafter defined) through the reimbursement of eligible costs. The City has established the Jeffrey Residential Community Reinvestment Area (the Jeffrey CRA ) within the meaning of Ohio Revised Code Sections through (collectively, the CRA Statute ) on October 21, 2002 pursuant to Ordinance amended by the adoption of Ordinance on December 16, The purpose of the Jeffrey CRA is to facilitate the development of housing in the area by providing qualifying structures with real property tax exemptions pursuant to 1/20/2014, pg. 1

67 Redevelopment Revenue Bonds Columbus, Ohio the terms of the CRA Statute. The Jeffrey Place TIF lies within the Jeffrey CRA; therefore, property within the Jeffrey Place TIF is eligible for property tax exemptions pursuant to the CRA Statute. The Jeffrey Place New Community Authority (the NCA ) was organized and created pursuant to Chapter 349 of the Ohio Revised Code and approved pursuant to Resolution 050X-2004 on March 8, 2004 by the City. The Jeffrey Place TIF is located near the southeast portion of that neighborhood of the City known as the Italian East Village and three blocks from the Short North Neighborhood. The Jeffrey Place TIF and its boundaries are shown in Plate 1 TIF District Boundary in the Appendix. The purpose of this Report is to describe the incremental revenues generated within the Jeffrey Place TIF that may be available for the repayment of Development Revenue Bonds, 2013 Series A and 2013 Series B, which Bonds will support certain redevelopment projects in the Jeffrey Place TIF. The Redevelopment Project (as hereinafter defined) of particular concern to this Report, is that project being carried out by Jeffrey New Day, LLC (the Developer ), an affiliate of Wagenbrenner Development Company. The Developer has planned to construct a mix of for-sale single family townhomes and rental apartments (the Redevelopment Project ), which will include 276 market-rate apartments, 176 townhomes and a community center. Ultimately, the Developer intends to construct up to 1,500 units representing a total investment of $200 million. The Bonds will fund land purchase costs and improve public right-of-way, public parks, community parking, roads, sidewalks and other public infrastructure, and the development of a community center. BASIS FOR PROJECTIONS This Report and the financial projections contained herein are based on estimates, assumptions, and information provided by the Developer and various other sources, such as the Franklin County Auditor, considered to be reliable. PGAV neither verified nor audited the information that was provided by others. Information provided by others is assumed to be reliable, but PGAV assumes no responsibility for its accuracy or certainty. The analysis is based, in part, on assumptions and conditions provided by these various sources. PGAV believes that the assumptions used in this analysis constitute a reasonable basis for its preparation. No professional standards or guidance relevant to the preparation of this Report exist, but PGAV has prepared this Report based on standards and methodology the firm has developed over the course of preparing dozens of similar analyses of historical trends and projections of real property taxes associated with various types of tax increment financing districts in support of bond financings throughout the country over the past 25 years. PGAV s methodology for preparing this Report includes the review of economic and demographic data, both current and historic, in order to develop assumptions about future growth. In light of this 1/20/2014, pg. 2

68 Redevelopment Revenue Bonds Columbus, Ohio information, PGAV develops reasonable and conservative assumptions about future growth and applies those assumptions to the projections of future revenue in this Report. The projections presented in this document are forward-looking and involve certain assumptions and judgments regarding future events. Although the projections formulated in this Report are based on currently available information, they are also based on assumptions about the future state of the national and regional economy and the local real estate markets, as well as assumptions about future actions by various parties, which cannot be assured or guaranteed. The ability to achieve the results described herein depends on the timing and probability of a complex series of future events, both internal and external to the Jeffrey Place TIF. Any event or action that alters an assumed event, assumption, or condition used to achieve the projections contained herein will cause a deviation from all financial projections contained in this analysis and may render them obsolete. These projections are not provided as predictions or assurances that a certain level of performance will be achieved or that certain events will occur. The actual results will vary from the projections described herein, and the variations may be material. Because the future is uncertain, there is risk associated with achieving the results projected. PGAV assumes no responsibility for any degree of risk involved. PGAV assumes no liability should market conditions change. Accordingly, PGAV does not express an opinion as to whether or not the Jeffrey Place TIF will achieve the results projected herein if economic, environmental, legislative, or physical events or conditions occur that would significantly affect the projected revenue streams. Specifically, there are a number of situations that could occur that would have major impacts on the revenue projections presented herein. Examples of events that could affect the projected availability of revenues include: changes in taxing provisions and/or market acceptance of commercial and residential additions to the Jeffrey Place TIF that affect the amount of property tax revenues generated within the Jeffrey Place TIF; and changes in legislation or new rulings in the Ohio courts regarding tax increment financing. The terms of PGAV s engagement for this study do not provide for reporting on events subsequent to the date of this Report. Therefore, PGAV accepts no responsibility to either update or revise this Report subsequent to its issuance. This Report is intended solely for the internal use of the New Community Authority, the Underwriter, Underwriter s legal counsel, the City, or the City s legal counsel, and bond counsel. Neither this Report nor its contents may be referred to or quoted, in whole or in part, for any purpose including, but not limited to, any official statement for a bond issue and consummation of a bond sale, any registration statement, prospectus, loan, or other agreement or document, without prior review and written approval by PGAV regarding any representations therein with respect to PGAV s organization and work product. Included in any offering statement must be a document signed by a representative of PGAV which document constitutes PGAV s written consent to this Report s use in such offering statement. 1/20/2014, pg. 3

69 Redevelopment Revenue Bonds Columbus, Ohio CONFLICTS OF INTEREST Other than its contractual relationship with the Underwriter for the execution of this Report, PGAV has no relationship with any party having a financial or other interest in the issuance and/or sale of the hereinafter defined Bonds. PAYMENT TO PGAV Payment to PGAV for the preparation of this Report is not contingent on the sale of the Bonds. OTHER WORK FOR ISSUER OR OBLIGOR PGAV has not performed any work related to the Redevelopment Project or the Jeffrey Place TIF in the previous five years. 1/20/2014, pg. 4

70 Redevelopment Revenue Bonds Columbus, Ohio SECTION 2 LOCAL ECONOMIC CHARACTERISTICS COLUMBUS OVERVIEW The City of Columbus (the City ) is the capital of the State of Ohio and home to The Ohio State University. The City s high concentration of workers in the government, education and health services sectors have helped the City s economy remain relatively stable and have kept its unemployment rate lower than the national average. Currently, the unemployment rate in the City is 6.1%, which is less than the unemployment rate for the State of Ohio (7.3%), and the national unemployment rate of 7.3%. Aside from state and local government entities, The Ohio State University is the metropolitan area s largest employer with more than 22,000 employees; more than half of which are employed at the Ohio State University Medical Center. The OSU Medical Center is important, as it has added nearly 5,000 jobs since 2001 and will add 6,000 direct permanent jobs by 2015 as it completes the largest phase of a $1 billion expansion project known as ProjectONE. This project will include a new tower to house the new Arthur G. James Cancer Hospital and Richard J. Solove Research Institute, and a new critical care building. This development is projected to create 4,000 indirect jobs as a result of its economic impact on the metropolitan area. ProjectONE is estimated to infuse $4.1 billion into the local economy starting in In addition to these relatively more stable employment sectors, retail and financial services are wellrepresented in the local economy. Of the 14 Fortune 1000 companies headquartered in the Columbus metropolitan area, five are retail companies: Big Lots, Limited Brands, Abercrombie & Fitch, Bob Evans Farms, and Retail Ventures (parent of DSW Shoes). Smaller retailers such as Express, Lane Bryant, and Tween Brands are also headquartered in Columbus. The area s diversity of corporate retail headquarters, combined with the stabilized national consumer spending environment leads to a conclusion that sustained and growing employment among these types of employers in Columbus may be expected. The financial services sector represents more than 7% of the local labor market (compared to 6% nationally). The largest employer in this sector is JP Morgan Chase, with 17,000 employees. Nationwide, a major national insurance and financial services company which has its corporate headquarters in Downtown Columbus, employs 11,400 in Columbus. 1 Ohio State University Press Release, The Ohio State University Medical Center's ProjectONE Among The Largest Job-Generating Initiatives In Ohio History, 1/20/2014, pg. 5

71 Redevelopment Revenue Bonds Columbus, Ohio Natural resources jobs may be on the rise in the Columbus area as well. Drilling and exploration of the Utica Shale have prompted extensive development in the region as companies establish new presences or expand to meet the needs and expected demand for services associated with shale development. The State of Ohio may gain up to $18 billion in income and 143,000 jobs by As drilling and exploration continue, professional services (e.g., legal, engineering, surveyors, finance, etc.) that support the energy sector will likely expand, adding jobs and residents to the Columbus area. Favorable demographics, in particular the presence of The Ohio State University and its tens of thousands of students needing places to live, have developed a stable rental housing market in Columbus. Those in the year-old cohort make up 23% of Columbus population, and these are the most likely to rent apartments. Only Austin, Salt Lake City, and San Diego have a higher concentration of young adults. 3 Table 1 Employed Population by Industry Columbus, Ohio MSA Industry % of Total White Collar 54.5 Educational Services 7.0 Health Care & Social Assistance 10.8 Arts, Entertainment & Recreation 1.3 Utilities 0.3 Public Administration 10.5 Information 2.4 Finance & Insurance 4.3 Real Estate, Rental & Leasing 2.8 Professional, Scientific & Tech Services 8.2 Management of Companies & Enterprises 0.1 Administrative & Support & Waste Management & Remediation Services 6.8 Service 24.9 Accommodation & Food Services 6.8 Other Services (except Public Administration) 6.0 Retail Trade 12.1 Blue Collar 20.8 Manufacturing 7.6 Construction At the close of this year (2013), apartment vacancy in Agriculture, Forestry, Fishing & Hunting Columbus is 5%. Job growth will heighten demand for Mining Transportation & Warehousing apartments in Columbus. Employers are expected to Wholesale Trade create 23,000 jobs in the Columbus MSA this year, representing an annual growth rate of 2.4%. Builders will complete 3,100 units this year (the largest annual total in 12 years), 1,600 of which will be near Downtown and the University, and 360 of which will be Ohio State University housing. 4 2 Marcus & Millichap Columbus, OH 4Q 2013 Report 3 Sources: PPR: Moody s Analytics: Reed Construction Data: CoStar Group, Inc. 4 Marcus & Millichap Columbus, OH 2Q 2013 Report 1/20/2014, pg. 6

72 Redevelopment Revenue Bonds Columbus, Ohio HOUSING MARKET ANALYSIS The Project The Project includes the construction of 175 for-sale attached townhomes and 276 market-rate rental apartments. The Project will be built within the Jeffrey Place TIF, which is located north of I-670, within the very popular Italian East Village neighborhood, which neighbors the Short North neighborhood, and just north across I-670 from the central business district. The boundaries of the Jeffrey Place TIF are shown in Plate 1 in the Appendix. The Jeffrey Place TIF is shown in context with area neighborhoods in Plate 2 Area Neighborhoods. The for-sale component of the Redevelopment Project was developed with input from area realtors in an effort to provide a residential product that stood out from the competition. Pricing is expected to average approximately $354,000 per unit, or approximately $180 per square foot. The units appear to be priced-to-market as Downtown Columbus residential units are currently selling for $181 per square foot, and sold at $184 per square foot at the end of The Redevelopment Project only has one directly comparable project in the Downtown Columbus/University Submarket (the Submarket ) or in the greater Columbus area in general. The closest comparable residential development in the Submarket is Neighborhood Launch, which includes townhome single-family units in addition to condominiums and apartments. Begun in 2008 Neighborhood Launch is located at the intersection of 4 th Avenue and Gay Street in Downtown Columbus. Currently, Neighborhood Launch includes 73 completed luxury condominium and townhome units and 260 apartments, which are currently under construction. Of the 73 for-sale units 70 have been sold. In its first year (2009), Neighborhood launch sold 35 units. Since then, the pace of sales slowed somewhat; 25 units sold in 2010 and 2011, seven units sold in 2012, and three units have been sold in the first quarter of Of the three units remaining, one is under contract, one is available, and one is a model unit. In its first year, Neighborhood Launch averaged approximately three units sold per month. In the following two years, Neighborhood Launch averaged approximately one unit sold per month. In the following year, as inventory became scarce, sales slowed even further to less than one per month; however, sales in the first quarter of 2013 have regained the one sale per month pace. Currently, 260 apartments are under construction at Neighborhood Launch. Also, proposed are 227 owner-occupied housing units, at a total estimated construction cost of $33.1 million. 5 The Columbus Board of Realtors: Local Market Update, April /20/2014, pg. 7

73 Redevelopment Revenue Bonds Columbus, Ohio Downtown Submarket Columbus/University The Submarket includes Columbus Central Business District, The Ohio State University and the surrounding area. Figure 1 The Submarket and Downtown Columbus, at right, shows the Submarket with core Downtown Columbus/central business district highlighted in blue. Figure One The Submarket and Downtown Columbus That the Submarket contains the central business district, The Ohio State University and several neighborhoods with many cultural amenities and entertainment options, encourages many young people to call this area home. In fact, 29% of the Submarket s population is between 20 and 32 years of age, numbering nearly 115,000 persons. This indicates that Generation Y has an above-average representation in Downtown Columbus. Generation Y is defined as those aged Nationwide, 25% of the population is a part of this age group and categorized as Generation Y. As the purpose of this section of this Report is to gauge residential demand, this Report will leave out those Generation Y members aged as individuals in this age group are more likely to live with their parents. Age % Share of U.S. Population % Share of Columbus MSA Population Table 2 Generational Population Distribution % Share of City Population % Share of Downtown Columbus Population Generation 81+ 1% 1% 1% 1% Silent Generation % 9% 7% 8% Depression and War Babies % 24% 21% 22% Baby Boom % 18% 18% 16% Generation X % 27% 33% 37% Generation Y <15 20% 21% 20% 17% Generation Next % 20% 27% 29% Generation Y (excluding teens) Source: ESRI 1/20/2014, pg. 8

74 Redevelopment Revenue Bonds Columbus, Ohio After Baby Boomers, members of Generation Y make up the largest demographic group in the United States and will, just as the boomers did, dominate residential the residential market through the various stages of their lives. 6 A recent, summer 2010, survey of members of Generation Y measured residential situations and anticipated housing preferences. At the time of the survey, 38% rented, 36% owned their residence, and 26% lived with relatives or in student housing. When asked to anticipate their housing choices in the year 2015, 25% anticipated living in an apartment or condominium; 70% anticipated living in a single-family home or townhome; and 5% anticipated living in other types of housing. 7 Generation Y is important in the context of this Report as many of the households in the Submarket fall within this demographic category and the various members of this demographic present prime targets for the types of housing developed within the Submarket and the Jeffrey Place TIF in particular. To give further perspective to the socioeconomic picture, ESRI s Tapestry Segmentation has been consulted. ESRI s Tapestry segmentation system divides residential areas into 65 segments based on socioeconomic and demographic characteristics to provide a detailed description of neighborhoods and their residents. This categorization is employed in an effort to understand the dominant socioeconomic/demographic groups residing within the Submarket. The most prominent tapestry segments are: 1. Metro Renters (8.5%): Young, educated singles sometimes living with room-mates. Median age is 33.6 years; 44% are in their 20s or early 30s. The median household income is $56,311. More than 80% have attended college, 25% hold a graduate degree and 17% are still enrolled in undergraduate or graduate school. Ninety-percent of the rental housing they inhabit are apartments. 2. College Towns (8.5%): Most residents are between 18 and 34 years of age, with a median age of 24.4 years. Fifty-nine percent of students are enrolled in college or graduate school; as a result, their median income, $31,271 is on the low end as many students work part-time. Fourteen percent of College Towns residents live in student housing; 30% live with relatives and the remainder (56%) live in apartments or rental single-family homes. 3. Metro City Edge (8.4%): This tapestry segment includes married couples, single parents and multi-generational families. The median age is 29.4 years. Metro City Edge residents typically live in single-family homes (68%), and 53% own their homes. 6 Lachman, M. Leanne and Brett, Deborah L. Generation Y: America s New Housing Wave, Urban Land Institute, Ibid 1/20/2014, pg. 9

75 Redevelopment Revenue Bonds Columbus, Ohio 4. Metropolitans (8.4%): These residents prefer to live in older city neighborhoods. Roughly half of these households are singles and 40% are married couple families. The median age is 37.7 years. The median household income for this group is $60,191 and the median net worth is approximately $102,000. These residents live in single-family homes or multi-unit buildings; 60% own their residences. 5. Dorms to Diplomas (6.5%): This group is composed primarily of college students. The median age is 21.7 years and 79% are enrolled in a college or university. Forty-three percent live in student housing. Ninety percent rent. The presence of the Central Business District and The Ohio State University, as well as past residential development in the Submarket, have established the demographic/socioeconomic characteristics that dominate the Submarket s neighborhoods. In 2002, the City began an initiative to promote residential development in Downtown Columbus. To date, 44 residential development projects have been completed pursuant to a variety of development types; such as rental, owner-occupied condominiums, single-family, new construction and adaptive reuse. Of the 44 complete projects, 27 are owner-occupied developments and 17 are rental properties. Of the 2,169 units completed throughout these 44 projects, 896 units are owner-occupied units and the remaining 1,273 units are apartments. Vacancies in Downtown Columbus are the lowest, by far, of the metropolitan area. Vacancy in this Submarket is 2.4%, while vacancy in the metropolitan area is 5%. 8 In 2012, 164 condominiums and 21 single-family homes sold in Downtown Columbus; representing increases of 42.6% and 61.5%, respectively, over In 2011, 115 condominiums and 13 singlefamily homes sold in Downtown Columbus; representing increases of 2.7% and 30% respectively. Through April 2013, sales in Downtown Columbus are outstripping the pace set in To date, 57 condominiums and 10 single-family residences have been sold; representing increases of 24% and 100% respectively over sales activity for the same period in The median residential sales price in Downtown Columbus has shown signs of recovery from a dip in At the end of 2012, the median sales price $211,250 represented an increase of 6.7% over the prior year. At the end of 2011, the median sales price of $198,041 represented a decrease of 13% over Through November 2013, the median sales price is $230,000, an increase of 9.5% over the same period in 2012, and an increase over the year-end 2010 median sales price of $228,300. The underlying demographics and market dynamics indicate the Submarket is a growing area with a large appetite for additional housing of all types; though with a comparatively heartier appetite for 8 Marcus & Millichap Columbus, OH 4Q 2013 Report 1/20/2014, pg. 10

76 Redevelopment Revenue Bonds Columbus, Ohio apartments. Given recent trends in residential development, it appears the market for apartments and owner-occupied housing in the Submarket has been established and is growing. Overall, the Submarket is projected to add more than 16,000 residents and 7,100 households by Approximately 4,250 of these additional households are projected to be owner-occupied households, while approximately 2,850 are projected to be renter-occupied. 9 Currently, other than the Project, there are 694 apartments under construction in the core of Downtown Columbus and another 498 have currently been proposed, for a total of 1,192 apartments, which appears to be well short of the projected growth in rental housing in Downtown Columbus. 10 Including the Project, the total apartment development anticipated for the Submarket, and known at the time of this Report s composition, is 1,468 units. With respect to owner-occupied housing, 253 owner-occupied units are proposed as additional phases of Neighborhood Launch in Downtown Columbus. Outside of Neighborhood Launch, 80 additional owner-occupied units are proposed in Downtown Columbus area. Including the Redevelopment Project, a total of 508 for-sale units are anticipated for Downtown Columbus, within a Submarket that anticipates approximately 8 times that amount of owner-occupied households to be added by The growth in for-sale housing prices and recent sales volume also indicates that there is demand for owner-occupied housing product in Downtown Columbus. In light of the sales history of Neighborhood Launch, its comparability to the Redevelopment Project, and the projected growth in population and households in the Submarket, this Report anticipates that the Redevelopment Project may achieve two sales per month, on average, throughout the course of its development. In light of demographics and projected growth in the area, as well as Neighborhood Launch s starting pace of three sales per month, PGAV feels this absorption expectation is reasonable. 9 Source: ESRI 10 Downtown Columbus Housing Report: First Quarter NOTE: This report is produced by the City of Columbus for a geography smaller than the Submarket geography which is the area of focus for this Report. Information on other planned projects outside of this area, which is tracked by the City, is not currently available. 1/20/2014, pg. 11

77 Redevelopment Revenue Bonds Columbus, Ohio SECTION 3 REVENUE PROJECTIONS AVAILABLE REVENUE SOURCES Per the Tax Increment Financing and Cooperative Agreement between the City and the Developer (the Cooperative Agreement ), the revenues available for repayment of the Bonds are: Jeffrey Place NCA Assessment Revenues ( NCA Charges ): The City established the Jeffrey CRA to facilitate downtown housing by providing real property tax exemptions pursuant to the terms of the CRA Statute. Once a qualified structure is completed, for a period of 15 years real property taxes shall be subject to a 100% abatement from the effective tax rate applied by the overlapping taxing jurisdictions. The NCA has established an annual assessment equal to the 50% of the assessed value of the property multiplied by the effective tax rate. One hundred percent (100%) of these assessment revenues shall be pledged to the Bonds. For developed properties, the NCA Charges for the purposes of repaying the Bonds are not to exceed 50% of the tax abatement granted for the improvements located in the Jeffrey CRA. The NCA Charges do not apply to property owned by the NCA or other government entities. Jeffrey Place TIF Revenues: Per the.41 TIF Act, 100% of the increase in the assessed value of improvements made to real property located in the Jeffrey Place TIF may be exempt from real property taxation for up to 30 years from the date the City approved the ordinance establishing the Jeffrey Place TIF and provides for the making of payments in lieu of taxes by the owner(s) of exempted real property. 11 The payments in lieu of taxes consist of 100% of the increase in assessed value multiplied by the effective tax rate of the overlapping taxing districts, with the exception of the School District tax rate. In effect, the District receives 100% of new incremental real property taxes less the new incremental real property taxes generated by the School District s property tax millage (the Jeffrey Place TIF Revenues ) which are deposited into the Jeffrey Place Urban Redevelopment Tax Increment Equivalent Fund (the Jeffrey TIF Fund ). Italian Village TIF Revenues: Per the.40 TIF Act, 100% of the increase in the assessed value of improvements made to real property located in the Italian Village TIF may be exempt from real property 11 A Service Payment is a payment in lieu of taxes made by a taxpayer in an amount equal to the real property tax liability that otherwise would have been due had the property not been exempted. A Service Payment is an obligation enforced by a lien on the property to be collected and enforced in the same manner as taxes on the property. 1/20/2014, pg. 12

78 Redevelopment Revenue Bonds Columbus, Ohio taxation for up to 30 years from the date the City approved the ordinance establishing the Italian Village TIF and provides for the making of Service Payments in lieu of taxes by the owner(s) of exempted real property. The.40 TIF Act also provides for the distribution of the applicable portion of those Service Payments to the School District, and establishes a municipal public improvement tax increment equivalent fund into which the remaining portion of such Service Payments shall be deposited. Therefore, the Statutory Service Payments consist of 100% of the increase in assessed value multiplied by the effective tax rate of the overlapping taxing districts, with the exception of the School District tax rate. In effect, the District receives 100% of new incremental real property taxes less the new incremental real property taxes generated by the School District s property tax millage (the Italian Village TIF Revenues ) which are deposited into a Municipal Public Improvement Tax Increment Equivalent Fund (the Italian Village TIF Fund ). Pursuant to the Cooperative Agreement, the Italian Village TIF Revenues deposited to the Italian Village TIF Fund will be available for repayment of the 2013 Series A Bonds. Table 3 TIF Revenue Collections, below, shows the TIF revenues collected, to date, for each TIF. Table 3 TIF Revenue Collections Jeffrey Place TIF and Italian Village TIF Columbus, Ohio Year Italian Village Jeffrey Place 2008 $ 495,683 $ 128, $ 1,375,530 $ 89, $ 760,110 $ 42, $ 778,677 $ 75, $ 941,153 $ 185, $ 874,797 $ 93,655 TOTALS $ 5,225,950 $ 615,391 Source: City of Columbus. Collections and Delinquencies Currently, 5.8% of all parcels within the Italian Village TIF District have delinquent taxes. In some cases, the current amount of taxes owed includes delinquent tax amounts from prior years, including prior taxes and taxes due for the 2012 tax year, total delinquencies amount to $1,004,259. The parcels and their delinquent tax amounts are shown on Table 4, on the following page. 1/20/2014, pg. 13

79 Redevelopment Revenue Bonds Table 4 Italian Village Tax Delinquencies Italian Village TIF District - Jeffrey Park Project Columbus, Ohio Parcel ID Year of First Total Amount Board of Delinquency Delinquent Review $ (537,959) YES $ (55,767) YES $ (19,549) YES $ (11,204) YES $ (8,088) YES $ (5,697) YES $ (2,720) YES $ (1,389) YES $ (1,374) YES $ (1,668) YES $ (1,646) YES $ (1,156) YES $ (452) YES $ (121) YES $ (43,202) NO $ (34,890) NO $ (20,734) NO $ (24,504) NO $ (22,830) NO $ (16,789) NO $ (16,570) NO $ (15,893) NO $ (14,622) NO $ (14,622) NO $ (11,060) NO $ (8,103) NO $ (7,940) NO $ (9,003) NO $ (8,443) NO $ (8,378) NO $ (7,149) NO $ (6,305) NO $ (6,655) NO $ (6,285) NO $ (6,490) NO $ (6,080) NO $ (2,686) NO $ (4,360) NO $ (4,560) NO $ (2,788) NO $ (3,458) NO $ (2,602) NO $ (2,451) NO $ (2,435) NO $ (2,388) NO $ (2,317) NO $ (1,785) NO $ (1,356) NO $ (1,157) NO $ (656) NO $ (894) NO $ (464) NO $ (872) NO $ (812) NO $ (339) NO $ (120) NO $ (200) NO $ (98) NO $ (75) NO $ (17) NO $ (16) NO $ (15) NO Total $ (1,004,259) Columbus, Ohio The owners of 14 of the delinquent parcels have appealed their assessed valuation to the Franklin County Board of Revision, which hears formal complaints on property valuations. After filing a complaint, a property owner schedules a hearing before the Board of Revision to present information in support of their complaint. Information with respect to resolutions of this process for these 14 parcels has not yet been made available. The fact that these parcels are currently under consideration by the Board of Revision may mean that the property owners have withheld property tax payments under protest as they appeal their property valuations. The majority of the delinquent parcels have relatively small amounts of delinquent taxes. The majority of the total delinquency amount can be attributed to just a handful of parcels. One parcel, in particular (parcel ) is responsible for 54% of the total delinquent tax amount. The top 10 delinquent parcels account for approximately 80% of the total tax delinquency. Table 5, below, shows the ten parcels with the highest amount of delinquency. Table 5 Top 10 Italian Village Tax Delinquencies Italian Village TIF District - Jeffrey Park Project Columbus, Ohio Parcel ID Year of First Total Amount Board of Delinquency Delinquent Revision $ (537,959) YES $ (55,767) YES $ (43,202) NO $ (34,890) NO $ (24,504) NO $ (22,830) NO $ (20,734) NO $ (19,549) YES $ (16,789) NO $ (16,570) NO Total $ (792,793) 1/20/2014, pg. 14

80 Redevelopment Revenue Bonds Columbus, Ohio Three of the top-10 delinquent parcels are currently under review by the Board of Revision. Together, these three parcels account for 61% of the delinquent tax amount. Of the 1,069 parcels in the Italian Village TIF District, 62 (or 5.8%) have a tax delinquency. Of these 62, 14 are under review by the Board of Revision. Parcels under review by the Board of Revision account for 65% of the total delinquent tax amount. This small proportion of parcels (1.3%) carries the predominance of delinquency and the fact that these parcels are engaged in the Board of Revision process indicates a resolution may be forthcoming. The top-10 delinquent parcels account for 80% of the total delinquent tax amount in the Italian Village TIF District. Typically, after a certain period of time, tax-delinquent parcels may be subject to seizure and sale so that the County may recoup the taxes it is owed. The County regularly publishes a list of all property subject to such a sale in an effort to market the tax-sale properties. At this time, none of the parcels listed in Table 4, above, are on the tax-sale list. PROPERTY ASSESSMENT AND REAL PROPERTY TAX RATES Property Assessment Under Ohio State law and Department of Taxation (the DOT ) rules, real property in all counties is reappraised every six years and property values are updated in the third year following each sexennial reappraisal. The DOT compares the assessed taxable value to the sales price of properties, and then uses these sales ratios to check the reappraisal process. Newly constructed residential units are initially assessed in accordance with the sale price. True and taxable value is established on January 1 of each calendar year. The real property tax base is the taxable (assessed) value of land and improvements. The taxable value is 35% of true (market) value, except for certain land devoted exclusively to agricultural use. Real Property Tax Rates Real property tax rates vary per taxing jurisdiction. The total real property tax rate includes all levies enacted by a legislative authority or approved by the voters for all taxing jurisdictions in which the property is located. Real Property tax rates are represented by the gross millage rate and the effective millage rate. The difference between the gross and effective rate is due to tax reduction factors, which generally prevent increases in voter-approved real property taxes when the valuation of existing real property is increased. The tax reduction factors make an effort to reduce the gross millage rate an amount as close as possible to the increase in market value in the affected taxing jurisdictions so as not to effectively raise taxes on taxpayers. Different tax rates are applied to residential uses and commercial uses. 1/20/2014, pg. 15

81 Redevelopment Revenue Bonds Columbus, Ohio The 2013 effective tax rates for the District are displayed on Table Tax Rates for 2014 District 010, on the following page. Because future adjustments to the tax rate cannot be known with any certainty, the 2013 effective tax rate is used to project future property tax revenues. Table Tax Rates for District 010 The Short North TIF District Columbus, Ohio Residential Effective Rate Non-School Effective Rate Commercial Effective Rate Non-School Effective Rate Property Credits Tax relief is granted in the form of a 10% reduction in each taxpayer s real property tax bill. Starting with tax year 2005, the 10% rollback has been applied to all real property that is not intended primarily for use in a business activity. In addition, a 2.5% rollback of real property taxes is granted on a homestead that is occupied by the homeowner. The State reimburses local governments for the cost of these tax credits from the State s General Revenue Fund (herein referred to as Property Rollback Payments ). In accord with the Cooperative Agreement, any and all Property Rollback Payments associated with the Statutory Service Payments shall, upon receipt by the City, be transferred, deposited and otherwise dealt with as Statutory Service Payments. Tax Reduction Factors For purposes of the tax reduction factors, real property is divided into two classes: Class I for residential and agricultural property and Class II for all other real property. Separate percentage reductions are applied to taxes levied against each of these two classes when the value of existing real property in the class increases. These reduction factors remain in effect until there is an increase in the value of existing property. New reduction factors are calculated and applied annually. Homestead Exemption Property tax reductions are granted to qualified low-income homeowners who are at least 65 years of age or are permanently and totally disabled, or to surviving spouses at least 59 years of age if the deceased spouse had previously received the exemption. Based on the fundamentals of the Project, it is not likely that any of these for-sale units will be purchased by low-income individuals or families; 1/20/2014, pg. 16

82 Redevelopment Revenue Bonds Columbus, Ohio therefore, PGAV has not estimated the impact of the Homestead Exemption on projected real property tax revenues. TERM OF TIF DISTRICTS AND TIMING OF REVENUE FLOWS The.40 TIF Act and.41 TIF Act state that a TIF may collect tax increment revenues for a maximum of thirty (30) years from the effective date of the establishment of the TIF. The City established the Jeffrey Place TIF on April 8, 2002, which will terminate 30 years later, in 2032, with the last collection occurring in The City established, on July 22, 2013, a new TIF for portions of the Jeffrey Place TIF that will be subject to the Redevelopment Project. The boundaries of the new Jeffrey Place TIF and the parcels that would remain subject to the original Jeffrey Place TIF are shown in Plate 3 New Jeffrey Place TIF Boundaries, included in the Appendix. The City established the Italian Village TIF on October 28, The Italian Village TIF District will terminate in the year 2032, with the last collection occurring in Estimates of future revenue streams are presented on a cash basis (e.g., the year revenues are to be received by the tax increment equivalent fund ). The year in which the market and assessed value of the property is established is herein referred to as the calendar year. The tax payable year (herein referred to as the tax collection year) is the year in which incremental real property taxes are collected, distributed, and deposited in the TIF Funds. TAX REVENUE ASSUMPTIONS Base Assessed Valuations The Franklin County Auditor has identified the initial year s taxable worth of real property at the time the City established the TIFs (herein referred to as the base taxable value) for each parcel within each TIF with the exception of two parcels. Table 7, on the following page, shows the base and incremental assessed values for each parcel in the TIFs as designated by the Franklin County Auditor. The 2002 base taxable value for the Italian Village TIF, as indicated in the most recent data provided by the County Auditor, is $25,611,215. 1/20/2014, pg. 17

83 Redevelopment Revenue Bonds 1/20/2014, pg. 18 Parcel Identification Number Owner Base Assessed Value (80 Value) Incremental Assessed Value (90 Value) Abated Assessed Value (99 Value) Total Assessed Value Total Market Value Apartments & Community Center Parcels JEFFREY NEW DAY $ 167,615 $ 437,185 0 $ 604,800 $ 1,728, JEFFREY NEW DAY $ 67,340 $ 175,910 0 $ 243,250 $ 695, JEFFREY NEW DAY $ 1,370 $ 3,900 Subtotal $ 234,955 $ 613,095 0 $ 849,420 $ 2,426,900 Single-Family Residential Parcels JEFFREY NEW DAY $ 4, $ 4,585 $ 13, JEFFREY NEW DAY $ 18,095 $ 47,005 0 $ 65,100 $ 186, JEFFREY NEW DAY $ 4,445 $ 25,305 0 $ 29,750 $ 85, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 4,445 $ 25,305 0 $ 29,750 $ 85, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 4,305 $ 25,445 0 $ 29,750 $ 85, JEFFREY NEW DAY $ 4,305 $ 25,445 0 $ 29,750 $ 85, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 4,445 $ 25,305 0 $ 29,750 $ 85, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,430 $ 21,070 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,990 $ 20,510 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,500 $ 21,000 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 3,360 $ 21,140 0 $ 24,500 $ 70, JEFFREY NEW DAY $ 4,515 $ 26,985 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 4,445 $ 27,055 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 4,445 $ 27,055 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 4,445 $ 27,055 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 4,445 $ 27,055 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 4,445 $ 27,055 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 4,445 $ 27,055 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 5,075 $ 26,425 0 $ 31,500 $ 90, JEFFREY NEW DAY $ 9,800 $ 27,125 0 $ 36,925 $ 105, JEFFREY NEW DAY $ 385 $ 1, JEFFREY NEW DAY $ 81,165 $ 211,785 0 $ 292,950 $ 837,000 Subtotal $ 238,630 $ 1,027,180 0 $ 1,266,195 $ 3,617,700 Parcels for Future Development JEFFREY NEW DAY LLC $ 95,340 $ 409,395 0 $ 504,735 $ 176, JEFFREY NEW DAY JEFFREY NEW DAY $ 5,250 $ 15, JEFFREY NEW DAY $ 185,610 $ 796,775 0 $ 982,385 $ 2,806, JEFFREY NEW DAY LLC $ 9,700 $ 211,855 0 $ 221,555 $ 633, JEFFREY NEW DAY $ 1,190 $ 5,145 0 $ 6,335 $ 18, JEFFREY NEW DAY LLC $ 81,170 $ 211,790 0 $ 292,960 $ 837, BUCKEYE COMMUNITY $ 44,800 $ 116,900 0 $ 161,700 $ 462, WINDSOR LOFTS LLC $ 19,110 $ 49,840 0 $ 68,950 $ 197,000 Subtotal $ 436,920 $ 1,801,700 0 $ 2,243,870 $ 5,145,614 Subtotal New Jeffrey Place TIF $ 910,505 $ 3,441,975 $ - $ 4,359,485 $ 11,190,214 Previously Developed Parcels WINDSOR LOFTS LLC $ 20,125 $ 1,546,580 $ 10,920 $ 1,577,625 $ 4,507, Gorman Michael J $ 1,225 $ 92,225 0 $ 93,450 $ 267, Marx Marie Luise $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Farrell Michael P $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Doll Judy $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Darbee Jeffrey T $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, North Fourth St LLC $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Schmidt-Sinns Udo $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Goodlad Charles D $ 1,225 $ 48,930 $ 1,120 $ 51,275 $ 146, Warner Brian $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Shtayyeh Dahlia S $ 1,225 $ 71,855 $ 1,120 $ 74,200 $ 212, Caruso Ioanios P $ 1,225 $ 82,775 $ 3,500 $ 87,500 $ 250,000 Subtotal Original Jeffrey Place TIF $ 33,600 $ 2,345,350 $ 24,500 $ 2,403,450 $ 6,867,000 Totals $ 944,105 $ 5,787,325 $ 24,500 $ 6,762,935 $ 18,057,214 1 Source: Franklin County Auditor Table 7 Parcel Base and Incremental Values 1,2 Jeffrey Place TIF - Jeffrey Park Project Columbus, Ohio 2 For coding and classification purposes, the Franklin County Auditor appends each parcel-identification number with an 80 to denote the parcel's base value, a 90 to denote the parcel's incremental value and a 99 to denote the parcel's abated value. Columbus, Ohio

84 Redevelopment Revenue Bonds Columbus, Ohio REVENUE PROJECTIONS FOR BONDS Table 8, on the following page, shows the contribution to the repayment of 2013 Series A Bonds of revenues from the Italian Village TIF. 1/20/2014, pg. 19

85 Redevelopment Revenue Bonds Columbus, Ohio Table 8 Italian Village TIF Revenues 1,2,3,4,5 Italian Village TIF District - Jeffrey Park Project Columbus, Ohio Revenue Sources Assessment Year Tax Collection Year Market Value - Residential 123,998, ,198, ,708, ,543, ,720, ,256, ,421, ,650, ,943, ,302,189 Assessed Value - Residential 43,399,405 45,569,375 47,847,844 50,240,236 52,752,248 55,389,860 56,497,658 57,627,611 58,780,163 59,955,766 Market Value - Commercial 66,162,800 75,970,940 79,769,487 83,757,961 87,945,859 92,343,152 94,190,015 96,073,816 97,995,292 99,955,198 Assessed Value - Commercial 23,156,980 26,589,829 27,919,320 29,315,286 30,781,051 32,320,103 32,966,505 33,625,836 34,298,352 34,984,319 Total Projected Assessed Value 66,556,385 72,159,204 75,767,164 79,555,523 83,533,299 87,709,964 89,464,163 91,253,446 93,078,515 94,940,086 Base - Residential Assessed Value 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 Base - Commercial Assessed Value 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 Incremental Value - Residential 28,394,170 30,564,140 32,842,609 35,235,001 37,747,013 40,384,625 41,492,423 42,622,376 43,774,928 44,950,531 Incremental Value - Commercial 12,551,000 15,983,849 17,313,340 18,709,306 20,175,071 21,714,123 22,360,525 23,019,856 23,692,372 24,378,339 Total Incremental Assessed Value 40,945,170 46,547,989 50,155,949 53,944,308 57,922,084 62,098,749 63,852,948 65,642,231 67,467,300 69,328,871 Multiply by 2013 Effective Residential Non-School , , , , , ,935 1,004,761 1,032,124 1,060,033 1,088,501 Millage Rate Multiply by 2013 Effective Commercial Non-School Millage Rate , , , , , , , , , ,681 Total Revenues for All Bonds $ 993,747 $ 1,130,034 $ 1,217,640 $ 1,309,626 $ 1,406,211 $ 1,507,625 $ 1,550,220 $ 1,593,666 $ 1,637,981 $ 1,683,182 Revenue Sources Assessment Year Tax Collection Year Market Value - Residential 174,728, ,349, ,009, ,709, ,450, ,231, ,055, ,921, ,830, ,782,510 Assessed Value - Residential 61,154,882 62,072,205 63,003,288 63,948,337 64,907,562 65,881,176 66,869,393 67,872,434 68,890,521 69,923,879 Market Value - Commercial 101,954, ,483, ,035, ,611, ,210, ,833, ,481, ,153, ,850, ,573,527 Assessed Value - Commercial 35,684,006 36,219,266 36,762,555 37,313,993 37,873,703 38,441,808 39,018,436 39,603,712 40,197,768 40,800,734 Total Projected Taxable Value 96,838,887 98,291,471 99,765, ,262, ,781, ,322, ,887, ,476, ,088, ,724,613 Base Year Taxable Value Attributable to Residential 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 15,005,235 Base Year Taxable Value Attributable to Commercial 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 10,605,980 Incremental Value Attributed to Residential 46,149,647 47,066,970 47,998,053 48,943,102 49,902,327 50,875,941 51,864,158 52,867,199 53,885,286 54,918,644 Incremental Value Attributed to Commercial 25,078,026 25,613,286 26,156,575 26,708,013 27,267,723 27,835,828 28,412,456 28,997,732 29,591,788 30,194,754 Total Incremental Taxable Value 71,227,672 71,227,672 71,227,672 71,227,672 71,227,672 71,227,672 71,227,672 71,227,672 71,227,672 71,227,672 Multiply by 2013 Effective Residential Non-School ,117,538 1,139,752 1,162,298 1,185,183 1,208,411 1,231,988 1,255,918 1,280,207 1,304,861 1,329,884 Millage Rate Multiply by 2013 Effective Commercial Non-School Millage Rate , , , , , , , , , ,565 Total Revenues for All Bonds $ 1,729,287 $ 1,764,557 $ 1,800,357 $ 1,836,694 $ 1,873,575 $ 1,911,010 $ 1,949,006 $ 1,987,573 $ 2,026,717 $ 2,066,449 "Assessment Year" is the year in which property is assessed. Taxes are collected the year following, in the "Tax Collection" year. 2 All "Base - Residential Assessed Value"s and "Base - Commercial Assessed Values" were provided by the Franklin County Auditor's Office. 3 The Non-School Millage Rates represent the total millage rate less the school millage rate levied against each listed use. 1 In the year 2014, The Wonder Bread apartment project, which is completed and in the lease-up phase though its current assessment does not reflect this, should be fully assessed adding to the commercial base an amount estimated to be $6,500,000. This analysis anticipates continued growth in the Italian Village TIF which, since its inception, has averaged growth in assessed value of 5% on an annual basis. This analysis estimates that the Italian Village TIF will continue to experience growth at an average annual rate of 5% through Assessment Year 2018; 2% on an average annual basis through Assessment year 2023; and 1.5% on an average annual basis each year thereafter /20/2014, pg. 20

86 Redevelopment Revenue Bonds Columbus, Ohio Table 9, on the following page, shows NCA charge revenue from parcels upon which no development has yet occurred and which are slated for future development but are not to be subject to the apartment, community center, and single-family development described in this Report. 1/20/2014, pg. 21

87 Redevelopment Revenue Bonds Columbus, Ohio 1/20/2014, pg. 22 Table 9 NCA Charge Revenue from Parcels Not Currently Subject to Development 1,2 Jeffrey Place TIF - Jeffrey Park Project Columbus, Ohio Assessment Year Revenue Sources Tax Collection Year Market Value 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 Assessed Value 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 Total NCA Charge Revenues $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60, Assessment Year Tax Collection Year Revenue Sources Market Value 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 4,294,957 Assessed Value 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 1,503,235 Total NCA Charge Revenues $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 $ 60,154 "Assessment Year" is the year in which property is assessed. Taxes are collected the year following, in the "Tax Collection" year. 1 2 The NCA Charge Revenue is 50% of the taxes paid on the full assessed value of parcels slated for future development and currently not planned to be subject to the apartment development, community center development, and single-family home development discussed herein. These parcels are currently classified as commercial by the Franklin County Auditor.

88 Redevelopment Revenue Bonds Columbus, Ohio Table 10-A and Table 10-B, on the following two pages, show projected service payments and NCA Charges imposed on existing improvements within the Jeffrey Place TIF. 1/20/2014, pg. 23

89 Redevelopment Revenue Bonds Columbus, Ohio 1/20/2014, pg. 24 Table 10-A Jeffrey Place TIF Revenues From Developed Parcels 1,2,3 Jeffrey Place TIF District - Jeffrey Park Project Columbus, Ohio Assessment Year Tax Collection Year Revenue Sources Market Value - Residential 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 Assessed Value - Residential 825, , , , , , , , , ,825 Market Value - Commercial 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 Assessed Value - Commercial 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 Total Projected Taxable Value 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 Base Year Taxable Value Attributable to Residential 13,475 13,475 13,475 13,475 13,475 13,475 13,475 13,475 13,475 13,475 Base Year Taxable Value Attributable to Commercial 20,125 20,125 20,125 20,125 20,125 20,125 20,125 20,125 20,125 20,125 Residential Incremental Value 812, , , , , , , , , ,350 Commercial Incremental Value 1,557,500 1,557,500 1,557,500 1,557,500 1,557,500 1,557,500 1,557,500 1,557,500 1,557,500 1,557,500 Total Incremental Taxable Value 2,369,850 2,369,850 2,369,850 2,369,850 2,369,850 2,369,850 2,369,850 2,369,850 2,369,850 2,369,850 Multiply by 2013 Effective Residential Non-School Millage Rate ,671 19,671 19,671 19,671 19,671 19,671 19,671 19,671 19,671 19, ,993 37,993 37,993 37,993 37,993 37,993 37,993 37,993 37,993 37,993 Multiply by 2013 Effective Commercial Non-School Millage Rate Bond Revenues $ 57,665 $ 57,665 $ 57,665 $ 57,665 $ 57,665 $ 57,665 $ 57,665 $ 57,665 $ 57,665 $ 57,665 "Assessment Year" is the year in which property is assessed. Taxes are collected the year following, in the "Tax Collection" year. 2 All "Base - Residential Assessed Value"s and "Base - Commercial Assessed Values" were provided by the Franklin County Auditor's Office. 1 3 The Non-School Millage Rates represent the total millage rate less the school millage rate levied against each listed use.

90 Redevelopment Revenue Bonds Columbus, Ohio 1/20/2014, pg. 25 Table 10-B Jeffrey Place NCA Charges From Developed Parcels 1,2 Jeffrey Place TIF District - Jeffrey Park Project Columbus, Ohio Assessment Year Revenue Sources Tax Collection Year Market Value - Residential 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 2,359,500 Assessed Value - Residential 825, , , , , , , , , ,825 Market Value - Commercial 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 4,507,500 Assessed Value - Commercial 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 1,577,625 Total Projected Assessed Value 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 2,403,450 Multiply by 2013 Effective Residential Millage Rate $ 28,061 $ 28,061 $ 28,061 $ 28,061 $ 28,061 $ 28,061 $ 28,061 $ 28,061 $ 28,061 $ 28,061 Multiply by 2013 Effective Commercial Millage Rate $ 63,130 $ 63,130 $ 63,130 $ 63,130 $ 63,130 $ 63,130 $ 63,130 $ 63,130 $ 63,130 $ 63,130 NCA Charge Revenues $ 91,191 $ 91,191 $ 91,191 $ 91,191 $ 91,191 $ 91,191 $ 91,191 $ 91,191 $ 91,191 $ 91,191 "Assessment Year" is the year in which property is assessed. Taxes are collected the year following, in the "Tax Collection" year. 2 Revenues per each millage rate shown are 50% of total. NCA Charge is equal to 50% of taxes paid on total assessed value. 1

91 Redevelopment Revenue Bonds Columbus, Ohio Table 11, on the following page, shows the Jeffrey Place TIF Revenues and NCA Charges generated by the apartment and community center components of the Project. 1/20/2014, pg. 26

92 Redevelopment Revenue Bonds Columbus, Ohio Table 11 Jeffrey Place TIF Revenues and NCA Charges - New Development Apartments & Community Center 1 Jeffrey Place TIF District - Jeffrey Park Project Columbus, Ohio Assessment Year Tax Collection Year Market Value - Apartments 2,130,569 12,665,369 22,376,534 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 Assessed Value - Commercial 745,699 4,432,879 7,831,787 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 Market Value - Community Center 292,460 1,738,554 3,071,589 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 Assessed Value - Commercial 102, ,494 1,075,056 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 Total Projected Assessed Value 848,060 5,041,373 8,906,843 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 Base Assessed Value 234, , , , , , , , , , , , , , ,960 Incremental Value - Commercial 613,100 4,806,413 8,671,883 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 Total Incremental Assessed Value 613,100 4,806,413 8,671,883 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 Mutliply by 50% of 2013 Full Commercial Millage Rate Revenue Sources $ 33,936 $ 201,736 $ 356,417 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 Total Revenues and NCA Charges $ 33,936 $ 201,736 $ 356,417 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 $ 358,173 Revenue Sources Assessment Year Tax Collection Year Market Value - Apartments 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 27,600,000 Assessed Value - Commercial 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 9,660,000 Market Value - Community Center 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 Assessed Value - Commercial 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 1,225,000 Total Projected Assessed Value 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 10,885,000 Base - Commercial Assessed Value 234, , , , , , , , , , , , , , ,960 Incremental Value - Commercial 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 Total Incremental Assessed Value 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 10,650,040 Multiply by 2013 Effective Commercial Non-School Millage Rate for TIF Mutliply by 50% of 2013 Full Commercial Millage Rate $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259, $ 358,173 $ 358,173 $ 358,173 Total Revenues and NCA Charges $ 358,173 $ 358,173 $ 358,173 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 $ 259,795 Market value of apartments assumes 276 apartments to be appraised at an average of $100,000 per unit; 100% complete and fully assessed in 2016 and assuming partial assessments in the years preceding. Tax abatement period assumed to begin in Prior to the commencement of the tax abatement period, an NCA Charge will be paid equal to 50% of the total property taxes paid on the properties total assessed value. 1 1/20/2014, pg. 27

93 Redevelopment Revenue Bonds Columbus, Ohio Table 12, on the following page, illustrates the projected course of new single-family home sales and the NCA Charges generated during periods of CRA tax exemption, as applied to completed homes, and the Jeffrey Place TIF Revenues available for debt service on the Bonds. Residential home pricing is expected to average approximately $354,000 per unit, or approximately $180 per square foot. The units are priced-to-market as Downtown Columbus residential units are currently selling for $181 per square foot, and sold at $184 per square foot at the end of The Columbus Board of Realtors: Local Market Update, April /20/2014, pg. 28

94 Redevelopment Revenue Bonds Columbus, Ohio 1/20/2014, pg Assessment Year Tax Collection Year Total Homes Sold Homes Sales 2015 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 $ 6,694,872 Homes Sales 2016 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 $ 7,743,234 Homes Sales 2017 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 $ 8,298,635 Homes Sales 2018 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 $ 9,270,736 Homes Sales 2019 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 $ 7,880,083 Homes Sales 2020 $ 10,227,505 $ 10,227,505 $ 10,227,505 $ 10,227,505 $ 10,227,505 $ 10,227,505 $ 10,227,505 $ 10,227,505 $ 10,227,505 Homes Sales 2021 $ 10,522,909 $ 10,522,909 $ 10,522,909 $ 10,522,909 $ 10,522,909 $ 10,522,909 $ 10,522,909 $ 10,522,909 Homes Sales 2022 $ 3,507,636 $ 3,507,636 $ 3,507,636 $ 3,507,636 $ 3,507,636 $ 3,507,636 $ 3,507,636 Total Additional Residential Value $ 6,694,872 $ 14,438,106 $ 22,736,741 $ 32,007,477 $ 39,887,560 $ 50,115,065 $ 60,637,974 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 Total Residential Assessed Value $ 2,343,205 $ 5,053,337 $ 7,957,859 $ 11,202,617 $ 13,960,646 $ 17,540,273 $ 21,223,291 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 Base Assessed Value $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 Incremental Value Subject to TIF $ 1,027,185 $910,459 $747,044 $606,973 $466,902 $326,832 $186,761 $46,690 $0 $0 $0 $0 $0 $0 $1 Incremental Value Subject to Tax Exemption $ 2,104,565 $ 4,814,697 $ 7,719,219 $ 10,963,977 $ 13,722,006 $ 17,301,633 $ 20,984,651 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212, $ 71,511 $ 163,599 $ 262,292 $ 372,545 $ 466,261 $ 587,893 $ 713,038 $ 754,754 $ 754,754 $ 754,754 $ 754,754 $ 754,754 $ 754,754 $ 754,754 Multiply by 2013 Full Millage Rate $ 43,012 $ 39,045 $ 33,493 $ 28,733 $ 23,974 $ 19,214 $ 14,455 $ 9,695 Multiply By Full Residential Millage during Tax Exemption Period Total Revenues for Bonds $ 43,012 $ 110,556 $ 197,091 $ 291,025 $ 396,519 $ 485,475 $ 602,348 $ 722,734 $ 754,754 $ 754,754 $ 754,754 $ 754,754 $ 754,754 $ 754,754 $ 754, Assessment Year Tax Collection Year Total Residential Value $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 $ 64,145,611 Total Residential Assessed Value $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 $ 22,450,964 Base Assessed Value $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 $ 238,640 Incremental Assessed Value $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 Incremental Assessed Value Subject to TIF $ 2,318,298 $ 4,999,623 $ 7,873,272 $ 11,083,540 $ 13,812,253 $ 17,353,830 $ 20,997,700 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 $ 22,212,324 1 Table 12 Revenues from Home Sales 1 Jeffrey TIF District - Jeffrey Park Project Columbus, Ohio Revenue Sources Revenue Sources $ 56,139 $ 121,069 $ 190,655 $ 268,394 $ 334,471 $ 420,232 $ 508,470 $ 537,883 $ 537,883 $ 537,883 $ 537,883 $ 537,883 $ 537,883 Incremental Assessed Value Subject to Tax Exemption $ 22,212,324 $ 22,212,324 $ 19,894,025 $ 17,212,701 $ 14,339,052 $ 11,128,784 $ 8,400,071 $ 4,858,493 $ 1,214,623 Multiply by 2013 Effective Residential Non-School Millage Rate for TIF $ 754,754 $ 754,754 $ 675,980 $ 584,871 $ 487,227 $ 378,145 $ 285,426 $ 165,087 $ 41,272 Multiply By Full Residential Millage during Tax Exemption Period Total Revenues for Bonds $ 754,754 $ 754,754 $ 732,119 $ 705,940 $ 677,883 $ 646,539 $ 619,897 $ 585,319 $ 549,742 $ 537,883 $ 537,883 $ 537,883 $ 537,883 $ 537,883 $ 537,883 Home sales are projected to average two per month at an average sale price of $354,000 or $177 per square foot at the start of sales. Sales prices are projected to grow 1% with each additional phase, rising to an average sale per-square foot price of $180 by the time all units are sold.

95 Redevelopment Revenue Bonds Columbus, Ohio Table 13, below, summarizes available revenues for Series 2013 Bonds should no additional development occur within the Jeffrey Place TIF. Assessment Year Tax Collection Year Italian Village East TIF Revenues Table 13 Bond Revenues Jeffrey Place TIF District - Jeffrey Park Project Columbus, Ohio Jeffrey Place Undeveloped Parcel TIF Revenues and NCA Charges * Jeffrey Place Developed Parcel TIF Revenues and NCA Charges Less Service on Outstanding Bonds Total Bond Revenues $ 993,747 $ 143,972 $ 57,665 $ (524,750) $ 670, $ 1,130,034 $ 60,154 $ 91,191 $ (524,000) $ 757, $ 1,217,640 $ 60,154 $ 91,191 $ (522,750) $ 846, $ 1,309,626 $ 60,154 $ 91,191 $ (526,000) $ 934, $ 1,406,211 $ 60,154 $ 91,191 $ (523,500) $ 1,034, $ 1,507,625 $ 60,154 $ 91,191 $ (525,500) $ 1,133, $ 1,550,220 $ 60,154 $ 91,191 $ (511,750) $ 1,189, $ 1,593,666 $ 60,154 $ 91,191 $ (438,000) $ 1,307, $ 1,637,981 $ 60,154 $ 91,191 $ (442,250) $ 1,347, $ 1,683,182 $ 60,154 $ 91,191 $ (440,750) $ 1,393, $ 1,729,287 $ 60,154 $ 91,191 $ (438,750) $ 1,441, $ 1,764,557 $ 60,154 $ 57,665 $ (441,250) $ 1,441, $ 1,800,357 $ 60,154 $ 57,665 $ (443,000) $ 1,475, $ 1,836,694 $ 60,154 $ 57,665 $ (439,000) $ 1,515, $ 1,873,575 $ 60,154 $ 57,665 $ (439,500) $ 1,551, $ 1,911,010 $ 60,154 $ 57,665 $ (439,250) $ 1,589, $ 1,949,006 $ 60,154 $ 57,665 $ (438,250) $ 1,628, $ 1,987,573 $ 60,154 $ 57,665 $ (441,500) $ 1,663, $ 2,026,717 $ 60,154 $ 57,665 $ (438,750) $ 1,705, $ 2,066,449 $ 60,154 $ 57,665 $ (1,055,250) $ 1,129,018 Totals $ 32,975,156 $ 1,286,890 $ 1,488,560 $ (9,993,750) $ 25,756,856 *NOTE: These revenues are only collected on currently undeveloped parcels for the tax year 2013 (payable 2014). In subsequent years, these revenues are paid on the parcels slated for future development however not subject to the apartment, community center, and single-family development addressed in this report. 1/20/2014, pg. 30

96 Redevelopment Revenue Bonds Columbus, Ohio Table 14, below, summarizes available revenues for Series 2013 Bonds including revenues from planned new development and the new Jeffrey Place TIF. Assessment Year Table 14 Bond Revenues Generated by Future Development Jeffrey Place TIF - Jeffrey Park Project Columbus, Ohio Tax Collection Year Revenues From Apartments & Community Center Revenues From New Single-Family Development Revenues for Bonds $ 33,936 $ 43,012 $ 76, $ 201,736 $ 43,012 $ 244, $ 356,417 $ 110,556 $ 466, $ 358,173 $ 197,091 $ 555, $ 358,173 $ 291,025 $ 649, $ 358,173 $ 396,519 $ 754, $ 358,173 $ 485,475 $ 843, $ 358,173 $ 602,348 $ 960, $ 358,173 $ 722,734 $ 1,080, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 754,754 $ 1,112, $ 358,173 $ 732,119 $ 1,090, $ 259,795 $ 705,940 $ 965, $ 259,795 $ 677,883 $ 937, $ 259,795 $ 646,539 $ 906, $ 259,795 $ 619,897 $ 879, $ 259,795 $ 585,319 $ 845, $ 259,795 $ 549,742 $ 809, $ 259,795 $ 537,883 $ 797, $ 259,795 $ 537,883 $ 797, $ 259,795 $ 537,883 $ 797, $ 259,795 $ 537,883 $ 797, $ 259,795 $ 537,883 $ 797, $ 259,795 $ 537,883 $ 797,678 1/20/2014, pg. 31

97 Redevelopment Revenue Bonds Columbus, Ohio SECTION 4 CONDITIONS AND ASSUMPTIONS The conditions and assumptions that apply to the revenue projections in this document are stated throughout. A negative change in the conditions that form the basis of the assumptions used in developing the projections contained in this Report could adversely affect the estimates of the incremental revenue available to support the Bonds. In order to project future revenues that may be generated within the District, certain assumptions must be made with regard to actions by private businesses and land owners, national and local economic conditions, public support, and legislative changes. The contents of this document are forward-looking and involve certain assumptions and judgments regarding uncertainties in the future. The ability to achieve the revenue projections presented in this evaluation is contingent upon the timing and probability of a number of complex conditions being met in the future and certain assumptions holding true. PGAV makes no assertions as to the degree of impact that changes in any of these conditions would have upon the revenue projections included herein. Any event or action that alters an assumed event, assumption, or condition used to achieve the projections contained herein shall be considered a cause to void all financial projections contained in this Report. These assumptions include such conditions as listed below. REDEVELOPMENT PROJECT It is assumed that the Redevelopment Project will be developed as described and that certain levels of home sales and apartment tenancy will be achieved by the Developer and ongoing management. REAL PROPERTY TAX RATES Real property tax rates are set by multiple independent taxing districts. Changes in levy rates in the future cannot be predicted with any certainty, so the 2013 property tax rates are used throughout this analysis. ASSESSED VALUE APPEALS Any successful appeal of the assessed value of property located in the District could have a negative impact on the amount of TIF Revenues generated. FAILURE TO PAY Any failure to pay the real property taxes owed on the property within the District will have a negative impact on the amount of TIF Revenues generated therein. 1/20/2014, pg. 32

98 Redevelopment Revenue Bonds Columbus, Ohio CONTINUED PUBLIC SUPPORT The success of the District and the successful ongoing maintenance of the Fund will require the commitment of the City and the County Auditor, without which many essential tasks of administering the Fund and allocating monies toward the retirement of the Bonds would be hindered or brought to a halt. Likewise, it is assumed that the Ohio legislature will not make any changes to the TIF or related statutes or pass other legislation that will negatively affect the District. COURT ACTION The results of future court decisions, unknown at this time, could impact, either positively or negatively, implementation of the Redevelopment Project as envisioned. COMPETENT STAFF SUPPORT The future success of the administration of the District will depend to a great degree on the presence of competent support of a number of entities to execute the administrative duties required by the Cooperative Agreement and adopted procedures on the part of the City and County. These entities include: City management, staff and consultants; NCA management, staff and consultants; County Auditor; and The Developer. NATURAL DISASTERS Future success of the Redevelopment Project could be affected by fires, floods, storms, or other Acts of God which could alter the value of existing physical improvements in the Redevelopment Project and have a negative impact on the revenue stream. ECONOMIC AND MARKET STABILITY National, regional, and local economic stability will need to prevail over the life of the District and continue to support economic activity in the Short North Arts District. In addition, prolonged labor strikes or terrorist attacks at the national, regional, or local level could adversely affect the business environment or business productivity at this location. 1/20/2014, pg. 33

99 Redevelopment Revenue Bonds Columbus, Ohio APPENDIX 01/20/2014

100 Legend Jeffrey Place TIF 0 Plate 1 Boundary Map Jeffrey Place TIF District o Feet January 2014

101 Convention Center / Arena District Downtown Plate 2 Area Neighborhoods Jeffrey Place TIF District 0 o Miles January 2014

102 Legend Existing Jeffrey Place TIF New Jeffrey Place TIF Plate 3 New Jeffery Place TIF Boundaries Jeffrey Place TIF 0 o Feet January 2014

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