Structured Parking Financing: Supporting Higher-Density Development

Central Ohio’s housing challenges may be grabbing all of the headlines, but parking remains a perennial concern, for residents, businesses, and retailers alike. When Crawford Hoying Development Partners were planning Bridge Park, the new walkable, urban neighborhood in Dublin spanning both sides of the Scioto River, they drew more than inspiration from the Short North. They worked with the City of Dublin and Columbus-Franklin County Finance Authority to ensure ample parking was available, and not an afterthought. It’s just one example of the many structured parking solutions CFFA has helped finance around the region.

What was once just a stretch of specialty shops between downtown Columbus and Ohio State, the Short North has become an enviable arts and dining district paired with a variety of housing options. The Hub combined the best of both recreation and residential with a parking garage that serves everyone. “There was a lack of public parking in the Short North that was beginning to hinder development,” Finance Authority President Jean Carter Ryan explained. “Structured public parking allows for higher density and is critical for mixed-use projects and high-density districts to succeed.”

Why is the Finance Authority so instrumental in the construction of parking solutions? The IRS has very specific rules for garage tax-exempt bond financing, and expertise is essential. For example, no more than 10 percent of parking spaces can be reserved in a public garage, and no more than 10 percent of annual debt service can come from reserved spaces. The Finance Authority used this knowledge to not only issue bonds to help E.W. High Street LLC (a partnership between Elford Development and Thrive Companies) cover the cost of the 250-space garage serving The Hub — CFFA owns the garage through a capital lease, with debt repaid through parking fees and tax increment financing revenues from the Short North TIF district. It’s not an uncommon arrangement.

Another secret to garage financing is that even experts rely on their own team of experts, which is why CFFA partners with DiPerna Advisors for guidance, just as fellow port authorities throughout Ohio have for decades. One of those experts is Ryan Kaplan. A graduate from Ohio Wesleyan University, his internship at the Federal Reserve Bank of Boston offered a formative understanding of financing intricacies he brought back to Central Ohio and DiPerna Advisors as the structuring agent for projects ranging from Gravity Phase II in Franklinton to Beulah Park in Grove City.

The Finance Authority actually issued three series of bonds — one senior series and two subordinate issuances — in 2012 to finance the construction of the Short North garage, now known as The Hub on High. Then CFFA refinanced the senior series of bonds in 2019 via their A- rated Central Ohio Bond Fund to provide further savings and allow additional TIF service payments to benefit the subordinate bonds.

“This project was an early example of a City of Columbus P3 project,” noted Kaplan, and echoed by The New York Times coverage of community support for the arts district and economic development made possible through the unique public-private partnership. “The incentives for The Hubbard garage allowed for an incredible private investment multiplier and has helped turn the Short North into what it is today.”

The Hubbard project was transformative, but the relative scale of development at Bridge Park illustrates just how versatile structured garage financing can be. The Finance Authority issued nearly $10M in bonds for The Hubbard garage and, in conjunction with the Finance Authorities of Toledo and Summit County, hundreds of millions for Bridge Park, covering multiple phases of development.

“By partnering with the Finance Authority on the Bridge Park project, we’ve been able to reduce our overall cost while delivering an exceptional product and experience to our customers and tenants,” explained Nelson Yoder, a principal at Crawford Hoying Development Partners. “The Finance Authority has a history of providing creative financing options for development projects that have helped make the Columbus Region great for the residents, business owners, college students and visitors that make up our community.”