Tuesday, Apr 24, 2018
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Leaseback bill passes House

Would allow counties to sell buildings to private developers

COLUMBUS — Lucas and other Ohio counties won approval Tuesday from the state House to sell their buildings to private developers and then lease the space back as part of long-term plans to renovate the structures without taking on heavy upfront debt.

“This legislation is both common sense and very simple in that it gives counties one more tool in order to help them balance their budgets alongside the needs of their residents,” said Rep. Barbara Sears (R., Monclova Township), the bill’s sponsor.

The measure now goes to the Senate, where its fate is uncertain.

Lucas County has lobbied for passage of House Bill 387 with the backing of the County Commissioners Association of Ohio. The bill would allow counties to sell their buildings and then lease back the office space while, under terms of the agreement, the new private owner makes improvements to, among other things, reduce operating costs and improve energy conservation and functionality.

The county would pay rent as a tenant during the term of the long-term lease and presumably would have the option at the end of the agreement to buy back the improved structure.

Lucas County Administrator Peter Ujvagi, a former state representative, said that if the Senate moves to send the bill to Gov. John Kasich before it runs out of time next month, the county will look at whether such agreements would make sense for the taxpayer.

The two buildings under consideration for such a move are 3210 Monroe St., Toledo, which houses Job and Family Services, and 701-711 Adams St., Toledo, home to children services, mental health recovery, and child support enforcement, as well as a private company.

“For us, the ultimate question is: Is it more cost beneficial for us to keep the building ourselves and pay for capital improvements and maintenance as needed and required, or is it better to do a sale-leaseback, retain flexibility for how much space we’re going to utilize as government potentially shrinks, and buy it back at the end of the lease?” Mr. Ujvagi said.

Rep. Michael Ashford (D., Toledo), who sponsored the bill with Ms. Sears, amended it on the floor to add a provision protecting the jobs of employees now working in those buildings.

“Because of the fact that in the last budget we reduced funds to local governments, this ensures that those employees who are in that current facility have the opportunity to stay employed throughout this ordeal,” he said.

The amendment passed by a margin of 63-27.

“Certainly local governments who are in this situation can, it seems to me, manage their situations as they choose,” said Rep. Lynn Wachtmann (R., Napoleon). “I don’t see the need for this amendment.”

The final bill went on to pass 83-6 and now goes to the Senate for consideration. All six negative votes were cast by Democrats.

Any bill that does not clear both chambers and reach the governor’s desk before the current two-year legislative session is gaveled to a close would have to start the legislative process over next year.

Lawmakers are expected to bring the session to a close in mid-December.

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