City, CPS Nearing Deal On Expired Tax Abatement Agreement
Cincinnati City Council could vote Wednesday evening on a proposal that sets up a new tax abatement agreement with Cincinnati Public Schools.
The proposal on the table would let the city offer property tax abatements to commercial real estate developers. In exchange, those developers would have to make payments in lieu of taxes (PILOT) to CPS for 33% of the abated property value.
The new proposal would run for five years, and include an annual audit. But that review would not change the PILOT rate for the term of the agreement.
A 1999 abatement agreement between the city and CPS expired on Dec 31. That plan had developers making PILOTs of 25% to 27%. Plus the city was making an annual $5 million payment to the district. That payment is not included in the new proposed agreement.
Council Members Greg Landsman, David Mann, Tamaya Dennard, Wendell Young and Chris Seelbach supported the proposal during a vote in the Budget and Finance Committee Tuesday. Council Member Pastor was opposed.
"The idea is to bring people together over the course of the next five years, every year, to look at the numbers, get better aligned on the math and be in a position five years from now to have math that we all agree on," said Landsman.
But Jeff Pastor wants agreement on that math now. He wanted to temporarily extend the 1999 agreement while a neutral third party evaluates the school district's finances to determine if the 33% PILOT is correct, or if it needs to be adjusted.
"What I see here, quite frankly, is these are honest people trying to get a deal done, but we're rushing the process," Pastor said. "I think that we need to do what they do in courts or what they do in academia. You have two experts. You have the arbiter, we get a neutral third party."
The school district is open to an annual review of the abatement agreement, but not to having a third party review before reaching a deal on a new agreement.
CPS attorney Daniel Hoying said that concern is based on city effort to include the district's state funding in that review.
"The city has insisted from the beginning of these negotiations that somehow the amount of money that the school district gets from the state is relevant to that calculation," Hoying said. "And this working group - I mean the board - has said unequivocally that its state foundation payments are not germane to these negotiations."
The city and the school board would decide how the annual audits would be conducted, and who would be involved in the process.
If City Council approves the new abatement agreement, the school board will likely consider it Monday.