Cleveland Heights City Council discusses Community Reinvestment Area
The city of Cleveland Heights is considering an economic development opportunity to encourage building and remodeling in the city. The Community Reinvestment Area program (CRA), created by the state of Ohio, is a tool designed to stimulate economic growth in cities. A city-wide CRA designation would provide owners of Cleveland Heights properties whether residential, commercial, industrial or mixed-use—tax exemptions to renovate existing buildings or construct new buildings.
All property owners in Cleveland Heights who are remodeling their property or constructing new buildings are eligible to apply for this tax exemption. There is an initial negotiation process between the property owners and the city for commercial, industrial and mixed use properties. Residential property owners must fill out an application before beginning their renovations.
The tax exemption is not the same for all property owners. The rate fluctuates with various factors, including the location of the property, the amount of money invested in the redevelopment and the type of construction. For example, a minimum investment of $25,000 per unit, or $500,000 in project costs on redeveloping multi-family dwelling units, would make the property owner eligible for a 50 percent tax exemption for seven years on the county auditor's increased valuation of the property. If the owner spent a minimum of $1,000,000, he or she would receive a 100 percent tax exemption for ten years.
For new construction, areas in the city are designated as CRA target reinvestment criteria zones that help determine what areas are eligible for the highest level of exemption percentages and terms. Zones are scored from 0-10, and areas scoring six or greater are eligible for the highest tax exemption opportunities. Areas in Cleveland Heights with high CRA scores include the neighborhoods north of Mayfield Road and east of North Taylor Road, and a section of the city east of Lee Road.
At the earliest, this program may be implemented in the fourth quarter of 2018. City council first began to consider this plan in Sept. 2017 and have discussed it at various council meetings and with city stakeholders, including realtors and FutureHeights. There have been two readings of this legislation in city council meetings, and a third reading is anticipated for July 16. If passed by council, information about the legislation would be run in a local newspaper for two consecutive weeks before being sent to the Ohio Development Services Agency for approval.
Julie Hullett, a 2018 graduate of John Carroll University, is thrilled to serve as a summer intern for the Heights Observer. She spent her college years working for The Carroll News, WJCU and the Society of Professional Journalists. Julie also held internships with the Girl Scouts of North East Ohio, ABC News and the Office of Congresswoman Marcia Fudge. One day, Julie hopes to connect her community through the art of storytelling.