Council denies tax abatement for Oakley development in rare disagreement with city staff
In a rare move Monday, Cincinnati Council voted not to approve a recommended tax abatement for a commercial development. City administration proposed an eight-year abatement for a Swensons Drive-In Restaurant and a 16,200-square foot strip mall on Madison Road in Oakley, but Council voted it down 5-4.
It's an unusual disagreement with the city's development officials. The Department of Community and Economic Development negotiates deals using a scorecard approved by the last council. In this case, Oakley Crossings Holdings scored eight points on the scorecard, which recommends a 52% abatement on improvements to the property for eight years.
Budget and Finance Chair Greg Landsman says the new council and mayoral administration have different goals.
"There's a whole host of things that I think this council is very eager to improve on as it relates to the priorities analysis," Landsman said.
A key point for several council members is that the project seems to be able to move ahead even without the abatement.
"In my mind, the role of tax abatements is to incentivize investment that would not take place otherwise," Mark Jeffreys said. "If it's going to take place anyway, why are we giving a tax abatement?"
Whether a project can be accomplished without an incentive is part of the scorecard, worth up to three points; the Oakley project scored high enough for an abatement even without that.
Voting against the abatement: Landsman, Jeffreys, Victoria Parks, Scotty Johnson and Reggie Harris. Voting in favor: Jeff Cramerding, Jan-Michele Lemon Kearney, Liz Keating and Meeka Owens.
Council members in favor of the abatement say it seems unfair to change the rules this far along.
"We were elected on a different set of goals and I'm very comfortable with us moving forward with that," Cramerding said. "On this project, it feels a bit like we're looking back in time … I'm very uncomfortable with the path we're going down today."
The Oakley development has been in official negotiations with the city for nearly a year.
Developer Christopher Hildebrant says they've been flexible with the priorities of the new council. Last week, Hildebrant agreed to commit to including certain levels of minority and women-owned businesses in contracting.
"We agreed to those new set of rules, but yet you still don't see the value in what we're trying to create," Hildebrant said. "We're doing everything that the city is asking us to do, but yet, the rules have slightly changed because of new council. You know, what are we supposed to do next time?"
The full project is estimated to cost $9.1 million. The abatement would have saved developers about $365,000 over eight years; the city's portion of those property taxes would have been about $98,814. In exchange, the developer would have paid about $232,000 to Cincinnati Public Schools and about $105,000 into VTICA, the city's fund for maintenance and operation of the streetcar.
A separate ordinance related to the development will be up for discussion again next week. It would give the developer a small piece of city-owned land in exchange for $1 and another plot nearby.
The city owns about 0.0617 acres directly adjacent to the developer's property on Madison Road. Oakley Crossings Holdings owns about 2.6588 acres at the intersection of Madison and Kennedy Avenue.
City administration is proposing a "swap," where the developer permanently dedicates part of its property as a public right-of-way.