CH Council votes to create Turkey Ridge CRA
Cleveland Heights City Council voted to create the Turkey Ridge Community Reinvestment Area (CRA), granting tax abatement to two economic developments projects, at its March 3 meeting, on third reading. Council passed the measure 6-1, with Council Member Jeff Coryell casting the dissenting vote.
“Income tax provides more than 50 percent of the city’s revenues,” said Mayor Dennis Wilcox in explaining his reason for voting for the ordinance. “I asked myself, ‘Will the city be better today with or without this project?’”
“I have deep misgivings about this legislation,” said Coryell. “I am not convinced that the proposed Turkey Ridge town homes are the type of development upon which such a large incentive—a 15-year, 100 percent property tax abatement—should be lavished.”
The Turkey Ridge CRA, Ordinance No. 8-2014, includes three sections of properties. The first are vacant parcels along Edgehill Road, currently owned by the city, that are planned for development as 10 housing units, with starting prices of $600,000. These units are eligible for 15-year, 100 percent abatement on improvements that raise the value of the property. The prior value of the land itself will remain taxable.
The city signed a letter of intent authorizing the sale of the land to Visconsi Companies for development, subject to passage of tax abatement, last fall. The city discussed the Turkey Ridge project with the CH-UH Board of Education at its joint public meeting on Feb. 12.
The second section of the CRA includes a portion of the Kenilworth Mews development, which began in 2004 without tax abatement. The original plan called for 16 units, but four remain un-built. The ordinance would grant 100 percent tax abatement for seven years to remaining undeveloped parcels. Council said this was justified due to the slow sales of the units.
The third section of the CRA includes four already-developed parcels that are zoned for multi-family use. These include 2348 and 2350 Overlook Road, currently owned by the College Club of Cleveland; 2300 Overlook Road, the Waldorf Apartments; and 2141 and 2155 Overlook Road, two single-family homes owned by one property owner. The ordinance would extend 10-year 100 percent tax abatement to historic properties where a minimum of investment of $500,000 is made to improve them, according to the U.S. Secretary of the Interior’s Standards for Rehabilitation. The Waldorf Apartments are not historic and, therefore, would not be eligible for the program.
The City of Cleveland Heights has six other CRAs within its boundaries: Villa Carabelli, Severance Town Center, Cain Park Village, Lee at Meadowbrook, Lee at Euclid Heights and East Derbyshire. The maximum tax abatement for these areas is 100 percent for seven years.
Several community members spoke during the “personal communications from citizens” portion of the meeting, and many urged council to vote no on the issue. Brendan Ring, owner of Nighttown and treasurer of the Cedar Fairmount Special Improvement District (SID), read a letter stating the SID’s support of the ordinance.
Brian Frentzko, president of the Kenilworth Mews Homeowners Association, who spoke at the Feb. 18 council meeting, urging council to delay its vote on the issue in order to address residents’ concerns. He said that while he was happy that council members had delayed the vote, he was distressed that they were still going to vote yes. “We have expressed our concerns and have even shown that there is no convincing evidence that the abatement is necessary or will be effective, and have demonstrated that it can even harm the residents of Cleveland Heights,” he said.
Debbie Shewitz, treasurer of the association, stated that Kenilworth Mews is not a blighted area and that the reason the remaining parcels had not sold was “due partly to the overall housing market (which has turned around to a large extent), and in large part due to the developer’s business decisions,” which included trying to sell half-built units and leaving construction debris on the site. She also pointed out that the developer is delinquent on property taxes for the parcels. “They were certainly within their right to make all of those decisions, but the city and the citizens of Cleveland Heights do not owe it to them to help them financially if the decisions didn’t work out well for them,” she said.
After comments from residents, Richard Wong, city planning director, gave a presentation about the Turkey Ridge CRA. “Income tax revenue is the largest proportion of city income,” he said, adding that the city had received three proposals for development of the Turkey Ridge property, all of which had asked for tax abatement. He noted that the City of Cleveland gives numerous cash incentives to prospective homebuyers, including tax abatement.
Tanisha Briley, city manager, said, “We have followed all of the procedures [for the CRA]. We are not the first community to use tax abatement, and although the state uses blight as an example, the city can use tax abatement at its discretion.”
Prior to council’s vote, several council members expressed the need to go ahead with development projects such as Turkey Ridge in order to increase income tax revenues to the city. Council Member Mary Dunbar cited the state’s reduction of funds that it previously shared with cities as the reason why she was voting yes on the ordinance. “Our revenues have been reduced by $2 million, and the city needs to increase its revenues. I would like to see Kenilworth Mews finished. The College Club needs to be repurposed. I believe its passage serves the greater good.”
Council Member Janine Boyd stated that she lives on the north side of the city and envisioned CRAs there, too. “I don’t see why we couldn’t have tax abatement in our area,” she said.
Council Member Melissa Yasinow said, “I believe this is in the best interest of the entire city.” Speaking of the need to increase city revenues, she said, “The CRA is one of the few ways we can achieve these goals.”
Vice Mayor Cheryl Stephens said, “Residents must either face a tax increase or do development regularly.”
Jeff Coryell, the dissenting vote on council, said, “This 15-year, 100 percent tax abatement for high-end new construction goes far beyond anything we have done in the past. . . . In my opinion this is a major step for our community and is not warranted in this instance, especially not without a more robust community conversation about our priorities and values than has yet taken place.”
Deanna Bremer Fisher
Deanna Bremer Fisher is executive director of FutureHeights and publisher of the Heights Observer.