Developers gave over $440K to city officials in 4 years
This story was originally published on December 20, 2019.
For the past decade, the marriage between influential businesses, non-profit organizations and public institutions has been rooted in a shared vision for economic development in and around Columbus that started back in 2010, called One Columbus.
And this spirit of collaboration and partnership has helped Columbus achieve key benchmark goals for prosperity, such as creating more than 150,000 new jobs, securing over $8 billion in capital investment and generating a 30% increase in per capita income (the amount of money each individual person makes), according to One Columbus, formerly Columbus 2020.
But this collaboration has also created a system of close ties where many in the city think one group of people retain power over city priorities, muffling the critiques of those outside the establishment and weakening the democratic functioning of our local government.
Quantifying those ties is difficult, but analyzing donations to city officials’ campaigns can illustrate part of the ties that developers, for example, have to city officials. From 2016 to 2019, major developers gave at least $440,000 to the mayor’s and city council members’ campaigns, according to a Matter analysis of campaign finance data.
Columbus reformed its campaign finance laws in 2019 to combat issues with dark money — meaning undisclosed donations — but many on the left and right are still concerned that the reform won’t make the needed changes.
DEVELOPERS HAVE GIVEN NEARLY HALF A MILLION DOLLARS TO CITY OFFICIALS SINCE 2016
Many of central Ohio’s top developers donate to city officials. About half of the largest developers in Columbus from 2016 to 2018 — as identified by Columbus Business First based on real estate project cost — donated to city officials from their company, from a related political action committee or company, or from company executives.
The list of donors includes heavy hitters like Kaufman Development, Pizzuti Companies and Wagenbrenner Development, but other listed names like Preferred Living, Daimler Group, the Schottenstein Real Estate Group and Robert Weiler aren’t found in city officials’ campaign contribution reports.
CASTO, a real estate company, tops the list as the highest campaign contributor at just over $82,000 for all four years. After CASTO, the highest contributors are Kaufman Development ($69,142), Wagenbrenner Development ($61,843), Pizzuti Companies ($61,843) and Wood Companies ($52,207).
Mayor Andrew Ginther received the most donations from developers out of the city officials analyzed, totaling $215,000 since 2016. The next highest is City Council President Shannon Hardin at $132,990. However, it’s important to note that both Ginther and Hardin also have the largest campaigns.
Overall, developers make up about 10% of donations for the four years analyzed. However, some officials get a higher portion of their donations from developers. For example, Council Member Mitchell Brown raised the least money but 17% were from developers, the highest percentage of all city officials. Hardin is second highest with 13.5% of his donations coming from developers.
But direct donations to city officials aren’t the only ways developers can try to gain influence. Many of the largest developers provide sponsorships and other kinds of financial support to local community organizations throughout the city.
Wagenbrenner Development sponsored the 2018 holiday party for The Harrison West Society — a community group that advocates for the neighborhood’s residents — according to the society’s Facebook page. Wagenbrenner broke ground on a development in the neighborhood in early 2019.
The company bought the property for $17 million from Batelle and received a 10-year, 75% tax abatement for the residential portion of the planned $200 million mixed-use “Founders Park” development. That means Founders Park received at least $7,729,760 in abatements. The tax break did include an affordable housing requirement, meaning for fifteen years, Wagenbrenner must make 30% of the apartments within a price range that lower-income folks can afford. But their definition of affordable is based on people making around $62,000 per year or more.
Kaufman Development, Robert Weiler Company and Casto all sponsor the Franklinton Board of Trade, an organization of businesses in Franklinton, a neighborhood that has been called “the new Short North” for its established art scene and is seeing a surge of investment. All three companies recently developed properties in Franklinton, including the mixed-use developments Gravity and River and Rich.
Furthermore, the Borror Companies’ foundation gave $1 million to support the city’s efforts to build a preschool in the Hilltop, where Donald Borror, founder of Dominion Home and father to the current Borror CEO, attended high school.
“I think they all work very well together … whether it’s a tax abatement or some kind of a zoning variance or a contract, I don’t think they have trouble getting what they want from the city,” Franklin County Republican Party Executive Director Josh Jaffe said.
SOME CRITICS CLAIM CITY AND BUSINESS LEADERS ARE TOO COZY
Jaffe, who ran an unsuccessful campaign for city council in 2017, said city races haven’t been competitive for a “long time,” driven in part by the imbalance of campaign contributions going to incumbents, or those currently holding office.
“These are local races for your hometown City Council, and Columbus is a large city, but it’s not the biggest city,” Jaffe said. “There’s a lot of money flowing into these campaigns, almost entirely into the campaigns of the incumbents.”
For example, Ginther ran unopposed for reelection in November, including a primary election that was cancelled because he had no challenger. Yet, he raised $112,750 ahead of that election.
“The type of people who make contributions in Columbus races, they know who’s going to win and they want to support the people who are going to win,” Jaffe said.
Ginther’s office said those donations have no effect on the city’s agenda.
“There is no link between campaign contributions and deals with the city,” wrote Robin Davis, director of media relations for the mayor’s office, in an email. “The majority of contributors to the Mayor’s campaign do not do any business with the city.”
Several requests for comment were sent to Kaufman and other major developers who donated to council or mayoral campaigns. These companies either did not respond to Matter’s request for comments or explicitly declined to provide comments.
Many of these companies have received tax breaks in recent years. In July 2019, City Council approved a tax increment financing district (TIF) for Kaufman’s Gravity 2.0 project in Franklinton, plus an additional $2 million from the city to Kaufman for streetscape improvements and a parking garage with a quarter of spots available to the public. Wagenbrenner received a 10-year, 75% tax abatement for its Founders Park project in February 2018.
The argument for tax abatements is that they encourage investment in lower socio-economic neighborhoods. Tax abatements were originally implemented in Columbus to encourage residents to move into the city. The average residential property that received an abatement saved $3,412 in taxes annually, according to a 2017 Franklin County Auditor tax abatement transparency study. However, the practice has stirred up controversy as properties in affluent places like the Short North have received abatements in recent years.
That abatement transparency study has some interesting facts in it, too. The majority of tax abatements go to residential properties (homes and condos), but commercial (offices and apartments) tax breaks cost the city much more. According to the study, commercial tax breaks cost the city $24.9 million, while residential breaks cost $8.4 million.
It’s no secret that Columbus makes a concerted effort to incentivize developers. A 2018 tax incentive policy overview explicitly states that the City’s core principle of its housing incentive program is to “foster private sector investment to build mixed income neighborhoods.”
Such donations and tax abatements are an example of how the city’s goal to redevelop neighborhoods aligns with the business interests of residential developers.
“I don’t think it’s true that campaign contributions buy specific decisions from city officials. It doesn’t need to be that transactional,” Jaffe, the Franklin County Republican Party executive director, said. “They’re all friends down there.”
CAMPAIGN FINANCE REFORM HAPPENED — IS IT ENOUGH?
The City of Columbus adopted new campaign finance regulations this year, a move Chief Ethics Officer Tracy Retchin, who works in the city’s new Campaign Finance Office, says was targeted at addressing “dark money” in local elections.
“This is a concern just generally because of case law that has gone on over the past number of years… There are nonprofit organizations…where people have been trying to work around and give contributions without disclosure,” Retchin said. “We are very focused on making sure that the organizations, the campaign committees, that people are reporting everything per law, so on our end we’re trying to be as transparent as possible.”
Before this year, there was no limit on how much money people and organizations could donate to city campaigns. Now, the city has capped all campaign contributions — whether from an LLC, an individual, a PAC or a larger company — at $13,292.35 per donor per year. The change also requires that all contributions be disclosed with the name and occupation of the donor, and it created an audit process to encourage fully-completed reports.
“These reforms established the city’s first contribution limits, while also bringing all campaign donations into the light so residents will know who is paying for political ads,” Davis said when asked about the relationship between the mayor and donors. She added that the reform was proposed by Ginther.
Columbus has transparent disclosure processes that in some cases go beyond state minimums and surpass many cities in Ohio, says Catherine Turcer, executive director of Common Cause Ohio, an organization that advocates for transparent government.
However, there are still ways donors can obscure their identity or business associations.
“You could go through a process where you could make it much harder to get to the original story,” Turcer said. “In a lot of ways those (local) races sometimes are really under the radar, but then there’s so many of them that it’s very hard for organizations that want to be on top of these things … to do studies or following the money.”
What Turcer means is this: instead of donating through your name or large business, you can create a PAC or a smaller company (the LLC) and donate “under the radar.” Using this method allows an individual to obscure or completely hide the actual name of the person or organization making the donation.
Even though Columbus changed how donors document contributions by encouraging fully-completed reports, a Matter analysis of campaign donor data found that 1,081 contributions lacked employer information or a full name. A majority of contributions lacking this data came from LLCs or PACs.
Notable names like Abigail and Les Wexner report a variety of employers; some of those listed are L Brands, Whitebarn Associates, “self” and “philanthropist.”
Both progressive and conservative advocates have said they are skeptical that some of these rules will actually change dynamics within the city.
For starters, this new limit is the highest of any city in the country by 2 times, which has several critics concerned.
Second, in recent years, public-private partnerships have re-created the Scioto Mile, kept the Columbus Crew in the city (although for double the original taxpayer price) and were a significant factor in Columbus winning the Smart Cities grant in 2016.
While some residents benefit greatly from these partnerships, others believe Columbus’ predominant vision for development leaves behind minority or lower socio-economic communities — a problem that could be better addressed if a more politically diverse group were involved with making those policies, they said.
And finally, council’s at-large seats (meaning, council members represent neighborhoods they don’t live in) and appointment process have caused some journalists to argue the entire city council system lacks democracy, a limitation that is felt by advocates on the left and the right of the political spectrum.
Jaffe said in Columbus, he thinks it’s fair to say most contributions come from people who work with the city, whether that’s a business or a public employee union or a developer.
Despite the transparency in campaign donations, Jaffe says he still worries about the impact the lack of Republicans, or even Democrats who “aren’t part of the club,” has on decision-making.
“When you have complete and total one party control like that, I think all of the decisions are made before the public meeting, and the public meeting is just their obligation to do it in a public setting,” Jaffe said. “They all know how they’re going to vote.”
Data analysis and reporting contributed by editor-in-chief Jaelynn Grisso.
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