Why I voted against establishing the Turkey Ridge CRA
To the Editor:
At the Cleveland Heights City Council meeting on March 3, I voted "No" on Ordinance No. 8-2014, establishing a Community Reinvestment Area (CRA) in the Turkey Ridge area. Due to the late hour, I gave only a shortened version of the remarks I had prepared about the ordinance and my opposition. The following is the complete version:
When I ran for City Council, I pledged to the voters that I would act upon my belief that, in fairness to our residents and in recognition of the high value that we in Cleveland Heights place upon supporting our public schools, property tax abatements would be used sparingly and only when clearly justified by compelling need.
In addition, I pledged to support an economic policy that is consistent with the character of Cleveland Heights, is strategically planned, puts a priority on preserving open green space, and addresses our most pressing needs, which I see as restoring neighborhoods blighted by vacancies and vacant lots, attracting younger upwardly mobile residents to our city, and creating housing suitable for our empty-nest seniors.
Judged by these standards, I do have deep misgivings about the legislation before us. 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.
Although the proposed Turkey Ridge construction is projected to add to our income tax base, it uses up green space rather than repurposing already-developed land; it does not address our compelling needs of restoring neighborhoods harmed by the foreclosure crisis, or creating housing that attracts new young-adult residents, or creating housing suitable to senior empty nesters. In short, I am not satisfied that this project meets any compelling need of the community beyond the hoped-for bump up in our income tax base.
It is true that Turkey Ridge is one of a dozen or so potential development sites listed in the 2011 Strategic Plan on our city website, but that plan does not rank or prioritize those development sites, nor does it address the use of large property tax abatement incentives. Indeed, the strategic plan calls for studying the feasibility of producing an overall city master plan, something that has not been done. I do not believe that inclusion of this site in the strategic plan justifies the large tax abatement to be bestowed upon it.
This 15-year, 100 percent tax abatement for high-end new construction goes far beyond anything we have done in the past. Our city started using tax abatements about 13 years ago and, at that time, they were seven-year, 50 percent abatements. Our abatements were increased to 100 percent after the housing market collapse of 2008–09. This new 15-year abatement we consider today is more than twice as long as the seven years previously in use. 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.
The only place in the county I have been able to find where 15-year, 100 percent residential tax abatements are being used is in the City of Cleveland. The City of Cleveland has been in a world of hurt for a very long time and I believe that their 15-year tax abatement came from a place of desperation. I do not believe that the same condition applies to our city. And I am concerned that once a 15-year tax abatement has been offered here it will become the new standard sought by every other developer, such as when proposals are requested for Top of the Hill.
It is said that a 15-year tax abatement is necessary for the proposed luxury town homes on Turkey Ridge to compete with new construction in University Circle. I am not persuaded that the Turkey Ridge site is comparable to anything available in University Circle. Turkey Ridge possesses spectacular views of the lake unmatched down the hill, and is surrounded by trees. It is in Cleveland Heights, which is a prestige address and a city with superior services to the City of Cleveland. It is walking distance from University Hospitals and Little Italy, while being very close to Cleveland Heights attractions like the Cedar Fairmount and Coventry Village districts.
I also question the timing of offering this precedent-breaking tax abatement. We are not in the throes of a housing market collapse like we were when we increased our seven-year tax abatements to 100 percent. Although the housing recovery has not yet been as strong as could be wished, we are in fact in a recovery mode, and the trend in University Circle is toward increased growth. Fifteen years is a very long time, and we should be very cautious before locking in a 15-year tax abatement just when things are looking up for housing development. The wooded slope of Turkey Ridge has stood on our border since before we were a city, and will still be there in two, three, or five years when the housing market may have improved to the point where Turkey Ridge town homes could sell at a spectacular price to match their spectacular location, with less property tax incentive.
In addition, I am not persuaded that including Kenilworth Mews in this community reinvestment area is a sound decision. The Kenilworth Mews units are quite different in character and price point from the Turkey Ridge project, so the notion that Kenilworth Mews needs to be protected from competition with the new Turkey Ridge units is not convincing to me. The Brownstones of Derbyshire housing units that are one block away from Kenilworth Mews have been successfully marketed without a tax abatement, as have the Cedarmount homes in the nearby Cedar Fairmount district. Several units within Kenilworth Mews have recently been sold, so the showing of disinvestment in this area is not strong. In my opinion, offering tax abatements to new construction in this small development will work a severe hardship on neighbors who bought very similar homes without a tax abatement.
It is not that I oppose all use of tax abatements as a development tool. For instance, I have no objection to the 10-year, 100 percent tax abatement in this legislation that applies to rehabilitation of historic residential buildings. Although the time period is long, the amount of the abatement is limited because it applies only to increased value due to the rehabilitation, and it serves a compelling need by incentivizing preservation of our existing historic architecture.
Our neighbor to the east, South Euclid, has declared a citywide community reinvestment area with a 100 percent tax abatement, but it is focused on finding buyers for vacant homes and vacant lots, a very compelling need of the community. This also strikes me as a clearly justified use for tax abatements.
It is very instructive that when the City of Cleveland decided to extend its 15-year, 100 percent tax abatements, the decision was preceded by a lively public debate. As a result, [Cleveland's] law was ultimately changed in 2010 to require that properties must meet advanced green standards of construction before qualifying for the tax abatement.
There are fundamental questions involved in increasing our tax abatements that I believe should be addressed by the community at large, prior to legislating them on an ad hoc basis in order to secure a particular deal. Our tax policy reflects our values. There should be a community conversation on what values and priorities are to be served by our economic development plans.
Cleveland Heights City Council Member