Monday, October 13, 2008

Cincinnati council to consider CRA tax exemption for 18 W Seventh

Cincinnati City Council is considering granting a Community Reinvestment Area tax exemption that could lead to the rehabilitation of into seven floors of Class B office space and ground-floor retail.

Building owner TBMG Properties is seeking an eight-year CRA agreement that would be equal to a 75 percent exemption on the increased property tax value.

TBMG estimates that the project will create up to 14 jobs with an annual payroll of over $400,000.

In giving up $10,400 in property taxes over the life of the agreement, the City hopes to gain $73,360 in earnings taxes.

According to City administration, much of the building has not been suitable for commercial tenants since the 1930s and currently has no running water.

Renovations, estimated at $880,000 and scheduled for completion by July 2009, would include new mechanicals, elevators, and tenant improvements.

Each floor would contain approximately 2,600 square feet of rentable space.

An ordinance to execute the agreement was introduced before council last Wednesday, and will need to be discussed in council's Finance Committee before further action is taken. The next meeting of council's Finance Committee is October 20.

The earliest the ordinance could appear before the full council is October 22.

5 comments:

Mark Miller said...

Hmmm...
The county and the school system give up the property taxes, while the city collects the earnings taxes. Nice racket for the city; it should pass easily.

Of course then little development gets done unless there's a tax incentive involved. Then taxes go up to compensate for lost revenue, and those without political pull usually find it cheaper to go elsewhere than to purchase a politician. Then more tax breaks are needed to jump-start development, and the cycle continues.

I love it when governments back-stab each other.

Randy Simes said...

Seems like this would be a great spot for residential units. You could get a good 14-18 units in there of reasonable size. The location is great and rental units would be even better.

I'm just not convinced right now that we need more Class B office space in the Downtown market. Apartments, on the other hand, are running occupancy rates in the 90% range.

Kevin LeMaster said...

Mark...first of all, the exemption is only for the increased tax revenue resulting from the improvements. The 75% property tax reduction means the county doesn't get any additional money, but Cincinnati Public Schools gets the 25% remainder. In this case, it's more than $23,000 over the 8-year term.

In terms of it being a "racket", it is part of the Ohio Revised Code and has been around since 1977 (with alterations in 1994).

Randy...One would like to think that the developer has done their due diligence by performing some sort of market study. Or maybe they have a tenant on board or at least some interest.

Oh, an aside...one thing I didn't mention in the article is that the same developers own the adjacent Lancaster Building at 22-24 W Seventh.

Dan said...

I love that building . . . and The Lancaster.

Anonymous said...

There are some really neat buildings on the at side of the street... and some pretty awful street level facades covering even more cool stuff.
I was also very happy to find out that the Lyric Piano building around the corner is now in good hands. What a gem of a building that one is.

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