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'Balance' Coming To Cincinnati's Economic Development Incentives

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Updated: Wednesday, Dec. 11 4:02 p.m. 

Cincinnati City Council adopted a motion Wednesday designed to bring more balance to development projects in the city. 

The vote was 7-2 in favor of a plan introduced last week by Council Member Greg Landsman. Council members Amy Murray and Jeff Pastor cast the "no" votes.

City administrators will now use the motion to draft ordinances to enact the proposal. 

Landsman's three-page motion adopts some of the recommendations in a 60-page report that city administrators released on the issue last month.

City officials were responding to a motion approved by council in January which said in part: "in the interest of updating our development subsidies and incentives programs in a way that continues to attract investments in our city while also better supporting our residents and neighborhoods."

Landsman said last week the goal is to "lift up residents, businesses and schools."

His proposal does several things, including changing the "scoring" system the Department of Community and Economic Development uses when deciding which projects to support and how much support to provide.

Landsman wants updates to existing scoring for all TIF (tax increment financing) and CRA (community reinvestment area) supported projects to prioritize those that include:

  1. Local jobs to include local workers in each phase of the project
  2. Livable wages for each phase of the project
  3. Inclusion to include minority and local, small businesses in the project
  4. Affordable housing
  5. Anti-displacement

Landsman asked that when projects are presented to council and the mayor, the plans lay out how they meet these five factors. Additionally, the city administration could set a project size threshold for these guidelines to protect smaller developments that would have difficulty meeting them.
"This balanced development approach will not only expand opportunities and increase social mobility, while also ensuring we attract new jobs and residents while keeping and protecting those jobs and residents already here," Landsman said in an email last week. "But we will also be able to prove to the nation that new investments in cities can be done in a way that leads to greater diversity and inclusion, not less, and that this is the way to the greatest possible economic and population growth."

Other proposals in Landsman’s motion:

  • The city should list and prioritize city-owned property for affordable housing and include these sites in low-income housing tax credit (LIHTC) projects
  • The city should remove parking minimums to lower housing construction costs, rental rates and increase walkability
  • Funding be appropriated for the express purpose of affordable housing site acquisition, and these sites be leveraged for LIHTC projects
  • The Department of Community and Economic Development leverage its ability to forgive debt to maintain affordability of housing projects
  • The city create an effort to support minority real estate development professionals, pairing them with experienced and established mentors.

Landsman asks for the city to hold the Cincinnati Public Schools (CPS) financially harmless when negotiating economic development deals. In this area, he proposes three things:

  • The city draft a proposal for CPS that maintains current PILOT (payments in lieu of taxes) amounts from 25% to 27%.  CPS had requested 33%.  City administrators could negotiate with developers to pay the 8% difference, or use it for either affordable housing and/or creating local jobs
  • The city work with CPS on a new governance structure to better communicate and track abatements, and to establish re-opener policies based on variables agreed upon with CPS
  • The city partner with CPS and a third-party partner to review the "math," and determine the exact "held harmless" abatement percentage if an agreement cannot be reached by Dec. 19.

A 1999 agreement between the city and school district expires at the end of the year, and both sides have so far been unable to reach a new deal.  

That blanket agreement allows the city to offer property tax abatements to developers working on commercial projects in the city, and in return those developers make PILOT payments to the school for 25-27% of the abated value.

The city and school district are at odds over the percentage of those PILOT payments and the length of a new abatement agreement.

This story first appeared on Dec. 4 and has been updated. 

Jay Hanselman brings more than 10 years experience as a news anchor and reporter to 91.7 WVXU. He came to WVXU from WNKU, where he hosted the local broadcast of All Things Considered. Hanselman has been recognized for his reporting by the Kentucky AP Broadcasters Association, the Ohio Society of Professional Journalists, and the Ohio AP Broadcasters.