The Plain Dealer article said the East Bank redevelopment had a similar agreement. If this is the first request in 10 years I don't think we should be too worried.

The property tax revenues from the value of the land with a new building on that land will go up compared to now with no buildings on it, even with tax abatement that will affect the buildings.

 

I know that's what the news article sort of imply, but that's not how TIFs work in Ohio. The exemption applies to "improvements," and under the relevent provisions of the ORC (e.g., 5709.40 or 5709.41, depending on the type of TIF), "improvements" are defined as the increase in assessed value. So it isn't really about land vs building. The assessed value of the whole property is essentially frozen for the duration (typically 30 years).

 

And if this policy gets expanded to cause buildings to be built on the other downtown lots (such as in the Warehouse District that have been barren for 30-60 years), then hallelujah! Then Stark is a freakin' genius for finding a financial mechanism for overcoming this long-standing and so far impenetrable barrier to their development. I don't want to wait another 30-60 years for them to be developed.

 

Tax breaks aren't exactly a creative "financial mechanism." I like this project, but I also recognize there is zero market justification for it in a low rent city like Cleveland, and I'm less convinced it's such a public good that we need to drop the the tax subsidy nuclear bomb. FEB at least had a substantial public space component- real public infrastructure (what TIFS were created to do).

 

I'm still on the fence for this particular deal, so it's not like I totally disagree with proponents, and I definitely agree some opponents are grandstanding. But also don't want to give short shrift to the downsides here.

 

The Plain Dealer article said the East Bank redevelopment had a similar agreement. If this is the first request in 10 years I don't think we should be too worried.

 

If the city's policy is never to dip into school taxes, developers never ask, and land owners don't factor it into their price expectations.

 

[Edited for typos and tone]

Two things are taxed with property taxes -- the assessed valuation of buildings and the assessed valuation of land. Now I realize that property tax abatements and TIFs are separate issues, but when tax abatements are applied to improvements made to the property, the assessed valuation of the buildings drops to zero but the assessed valuation of the land actually increases. So the school districts favored the developments because they would get more funding as a result of the tax abatement. Perhaps the development would have happened in some form and in some cases without the tax abatement. In some cases they would not. And, in some cases, the development involved a revenue sharing agreement between the city and schools in which the city and schools would split the new income taxes resulting from the development.

 

Now I presume that in this TIF the lender(s) get the additional property tax from the buildings and the new property tax revenues resulting from the improved land? If so, that's a new on me. But if that's what it takes to bring multiple elements of an expanded tax base (residents, jobs, sales transactions, etc) to Cleveland while getting rid of eyesore parking lots to make downtown more inviting to pedestrians (the real money machines of central business districts), then so be it.

 

Like I've said, these surface lots have lingered (and grown) over the past 30-60 years. What risk-taking, transformational actions will take place to finally stop this trend, end the reign of the surface parking lot, and turn the tide in the other direction? What risk-taking action will ignite more private sector investment downtown? Well, we've got one in front of us right now. And growth NEVER happens without risk. Never.

The schools will collect will still receive the 10.8 million over 30 years.  The TIF only exists on the new improvements.  The 18 million is in addition to the 10.8 and it is 18 million today rather than a potential $126MM over 30 years.

 

i'll say, i looked and $18m was worth almost $39m 30yrs ago. so take the $$ now and run. enjoy the new cool new development and the taxpayers it will attract. the city will later get a tax windfall out of it in 20-30yrs, whatever they can work out. give stark the ability to get it done and make it a hit and as he will be long gone hammer his legacy stakeholders with the taxes later.

Agree, KJP. The schools have also stood to gain additional property taxes on this lot, the Jacobs Public Square lot, the Warehouse District lots and how many other lots throughout the city for how many decades? 

^it is only a controversy to somebody with weak math skills or a political opportunist who takes advantage of people with weak math skills.

That's not harsh, that's pretty darn accurate if you ask me

To me, this is a no-brainer - there are real needs, real students in Cleveland now who will benefit very soon from a Nucleus which actually rises. There are almost no  deals that come along that generate anywhere close to the  $60 or so million dollars that the schools will receive should Nucleus happen. We can talk about the next 30 years and what could've been or take a creative deal  which actually results in Clevelands new mega project. Today's  school budgets are increasingly burdened. This deal produces money now.  The scope of nucleus' impact on downtown and the region in general is understood by everyone. Maybe this deal is a compromise of sorts  but that doesn't mean it's not a big win-win.

Amen

Does "you gotta spend money to make money" sum it up?

Another argument in favor is that transformative projects like this can increase the value of other properties which aren't subject to the TIF.  Of course this is speculative and impossible to quantify.  But that doesn't mean it isn't real.

 

If we accept that "it takes money to make money," and I think everyone does, the question becomes from whom and for whom.  If there's a disconnect between those two, we can't be surprised when opposition emerges.  And it isn't helpful to respond with childish attacks on the opposition's IQ.  For the love of all that is holy, that needs to stop.  It only serves to enhance their suspicion that our plan is to screw them over.  And whether they've read it or not, the literature indicates they aren't entirely wrong.

 

TIF's shift financial risk from private enterprise to the public.  Any financier will tell you that's worth money.  Is the public being fairly compensated?  Is the public getting a realistic appraisal of the magic beans it's being asked to accept?  There's room for honest disagreement on that, especially given the recent history of real estate speculation.

Question:  Are there permanent residences in the nuCLEus?  Meaning there are going to be for sale residences not just rentals.  Of which, do not those people buying the residence have to pay a property tax?

 

My point being, the owner of the whole building receives a TIF.  The schools receive their $360,000 for the lot, plus, any individual property tax from permanent residents in said building. 

 

Or do property taxes not apply to sale units in a building owned by another group?

Any new residential construction in Cleveland carries a 15 year abatement on property taxes.  TIFs on Cleveland projects are applied to the non-residential portion of a project for 30 years and years 16-30 on residential.

Another argument in favor is that transformative projects like this can increase the value of other properties which aren't subject to the TIF.  Of course this is speculative and impossible to quantify.  But that doesn't mean it isn't real.

 

If we accept that "it takes money to make money," and I think everyone does, the question becomes from whom and for whom.  If there's a disconnect between those two, we can't be surprised when opposition emerges.  And it isn't helpful to respond with childish attacks on the opposition's IQ.  For the love of all that is holy, that needs to stop.  It only serves to enhance their suspicion that our plan is to screw them over.  And whether they've read it or not, the literature indicates they aren't entirely wrong.

 

TIF's shift financial risk from private enterprise to the public.  Any financier will tell you that's worth money.  Is the public being fairly compensated?  Is the public getting a realistic appraisal of the magic beans it's being asked to accept?  There's room for honest disagreement on that, especially given the recent history of real estate speculation.

 

Very much this.

 

The schools have had levy after levy pass and are I believe top 20 in per capita spending in the state for a shrinking population base.

 

Now this comes along and us taxpayers are being asked to private profits and the public via. CMSD is being asked to forgo over 100 million dollars in tax revenues.  I realize that the lump sum payment could fuel additional school development via. Federal matching funds,  but it feels like school construction for constructions sake.  That Max Hayes site should have been sold.  They do not need that school and they (CMSD) still do not know what the curriculum/programming of the 2 schools that will be built on the Max Hayes site will be, but they know they need it.

 

Funny how many people on this forum decry the cost of suburban sprawl and how that bill is unsustainable.  If the TIF damn breaks on this Nucleus project, who is going to pay the tax bill in this city when we just give it away to Sports teams and now a development that cannot be financed privately.

 

Let the "businessman" stay out of my municipal coffers.  If the market wont bear it, is not that the market regulating itself?

 

 

Two things are taxed with property taxes -- the assessed valuation of buildings and the assessed valuation of land. Now I realize that property tax abatements and TIFs are separate issues, but when tax abatements are applied to improvements made to the property, the assessed valuation of the buildings drops to zero but the assessed valuation of the land actually increases. So the school districts favored the developments because they would get more funding as a result of the tax abatement. Perhaps the development would have happened in some form and in some cases without the tax abatement. In some cases they would not. And, in some cases, the development involved a revenue sharing agreement between the city and schools in which the city and schools would split the new income taxes resulting from the development.

 

Now I presume that in this TIF the lender(s) get the additional property tax from the buildings and the new property tax revenues resulting from the improved land? If so, that's a new on me. But if that's what it takes to bring multiple elements of an expanded tax base (residents, jobs, sales transactions, etc) to Cleveland while getting rid of eyesore parking lots to make downtown more inviting to pedestrians (the real money machines of central business districts), then so be it.

 

Like I've said, these surface lots have lingered (and grown) over the past 30-60 years. What risk-taking, transformational actions will take place to finally stop this trend, end the reign of the surface parking lot, and turn the tide in the other direction? What risk-taking action will ignite more private sector investment downtown? Well, we've got one in front of us right now. And growth NEVER happens without risk. Never.

 

Your last paragraph I can sympathize with to a large extent, even if I sort of shudder seeing tax subsidies framed as some sort of brave risk taking. [The city has been using them for decades. The only breakthrough here is a difference in degree, not kind.] I'm excited as anyone to see high density development in the core of the core. Even with a gargantuan parking garage and an utterly generic tenant roster, this thing should be a very nice incremental boost to downtown population, sidewalk activity, and income and sales tax collections. And I share your impatience.

 

Your description of TIFs, though, is still a bit off. Schools generally don't care about TIFs because the PILOTs the city negotiates with the developer (essentially property tax payments that are channeled outside of the city/county's general fund and directed to specific costs, like bond payments and the school district) effectively erase the exemption vis a vis the school's portion of the taxes on the built project. Has nothing to do with income tax sharing (which I'm not sure we've ever seen), and has everything to do with the requirement under state law that school districts approve long/deep TIFs like this one if the PILOTs don't given them their cut. And the land/building valuation distinction is irrelevant. You're misinterpreting "improvements" in this context. It's black and white in the code. It's the increase in assessed value of the whole property that's subject to the exemption. Changes to the market value of land after the TIF goes into place won't affect property tax collection.

After 30-60 years of widening parking craters (and being alive for 50 of them), I've earned my impatience. :)

 

As for the risk taking, the risk is on the public sector side. Probably the greatest public sector risk ever taken in the state of Ohio was the Ohio Canal which nearly bankrupted the fledgling state. But it was worth the risk to develop a largely wilderness area. This will be worth the risk to to develop an urban wilderness -- our downtown surface parking lots.

NuCLEus tax deal goes to Cleveland school board tonight; city council won't commit to backing board

Updated on August 8, 2017 at 1:00 PM Posted on August 8, 2017 at 5:35 AM

By Patrick O'Donnell, The Plain Dealer [email protected]

 

CLEVELAND, Ohio - The Cleveland school board will have its first public discussion tonight of the multi-million dollar tax deal sought by developer Robert Stark to build the 54-story nuCLEus tower downtown.

 

It's still not clear, however, how binding the board's vote on the project later this month will be. City Council has the final say under state law and council members have declined to commit to following the board's decision.

 

The $540 million development planned north of Quicken Loans Arena in downtown's Gateway District would replace a parking lot and a few older buildings with hundreds of apartments and, possibly, some condos, plus offices, shops, restaurants, a hotel and structured parking.

 

MORE:

http://www.cleveland.com/metro/index.ssf/2017/08/nucleus_tax_deal_goes_to_cleveland_school_board_tonight_city_council_wont_commit_to_backing_board.html

Any word on what happened at the school board meeting?

 

Any word on what happened at the school board meeting?

 

 

They voted on a motion "hypothetical" magnet school for the blind musical software coders on the Nucleus site.  Surely a financial boon to the district.  :evil: :roll: :evil: :wink: :cry:

NuCLEus project draws a few questions, little debate from Cleveland school board

CLEVELAND, Ohio - The Cleveland school board started considering Tuesday whether to grant a tax deal to developers of the proposed downtown nuCLEus tower, but board members offered few clues as to how they might vote in two weeks.

 

The board spent about an hour hearing details of the deal from district CEO Eric Gordon  - almost all of it matching what he presented to the public at eight community meetings about the project.

 

The board also heard a summary of resident feedback on the proposal, with 58 percent of the 209 who filled out a survey backing the deal, and 40 percent opposing it. About two percent were undecided.

 

http://www.cleveland.com/metro/index.ssf/2017/08/nucleus_project_draws_a_few_qu.html#incart_river_home

^ Thanks for the update.  I am cautiously optimistic about the proposed TIF deal.  I might feel better about if it weren't an election year.

It never ceases to amaze me how anyone could be opposed to this (and other projects with tax abatement).  It is just common sense that seems to be lacking in today's world.

 

This is an important component of the total financing package for the project to make the finances work.  If the TIF deal does not pass, then the project will NOT get built.  Then, everyone loses.  NO additional tax revenue for the schools.  NO development for the site leaving the surface parking lots.  So, everything remains as is.

 

Does anyone really think the developer is bluffing and would build the project anyway if the TIF does not go through?

^ I totally agree if you look at the amount of money that CMSD will "forego" over 30 years vs what they get up front and calculate present value of the stream it is a pretty good deal for the school because of the state match.  The upfront money is guaranteed too unlike the stream of revenue that may be received if the project is built. 

^ I totally agree if you look at the amount of money that CMSD will "forego" over 30 years vs what they get up front and calculate present value of the stream it is a pretty good deal for the school because of the state match.  The upfront money is guaranteed too unlike the stream of revenue that may be received if the project is built.

 

Jeff Johnson says no.

 

He hasn't read nor does he understand the economics of the proposal... but no.

^ it's all about optics. 

^ it's all about optics.

 

Exactly.

^ I totally agree if you look at the amount of money that CMSD will "forego" over 30 years vs what they get up front and calculate present value of the stream it is a pretty good deal for the school because of the state match.  The upfront money is guaranteed too unlike the stream of revenue that may be received if the project is built.

 

Jeff Johnson says no.

 

He hasn't read nor does he understand the economics of the proposal... but no.

 

I saw a Jeff Johnson for Mayor sign on my street the other day. I badly wanted to vandalize it, but a cooler head prevailed. 

^ I totally agree if you look at the amount of money that CMSD will "forego" over 30 years vs what they get up front and calculate present value of the stream it is a pretty good deal for the school because of the state match.  The upfront money is guaranteed too unlike the stream of revenue that may be received if the project is built.

 

Jeff Johnson says no.

 

He hasn't read nor does he understand the economics of the proposal... but no.

 

He's a grandstanding idiot. Off topic, I know

This project would be a  huge win for Cleveland

 

http://www.clevelandmetroschools.org/cms/lib05/OH01915844/Centricity/Domain/5019/NuCLEusBOEpresentation.2017.08.08.pptx

Some interesting info in that PowerPoint.

This project would be a  huge win for Cleveland

 

http://www.clevelandmetroschools.org/cms/lib05/OH01915844/Centricity/Domain/5019/NuCLEusBOEpresentation.2017.08.08.pptx

 

Fund that gap another way.

 

No thanks.  The math stinks for us taxpayers and only serves to fuel the CMSD greed for new buildings.

 

The investment approach on the 18million will likely not be followed and instead be used for matching funds for new construction.

 

 

 

 

 

What??

 

Not sure I understand your point but the bottom line is the project will NOT get built without creative financing. You do understand that, right? So the school system would get some 18 million now plus, hopefully, the additional millions from the state for school construction. All that vs. the much, MUCH, smaller amount they currently receive in the form of property tax on the parking lot.

 

Say what you will about developers getting rich off the backs of the people but let's be dispassionate about this particular project and admit that everyone benefits. CLE gets a shiny new skyscraper, there's one less eyesore parking lot downtown and the schools get WAY more money than they would if nothing is done. It's a no-brainer. 'Course in this town what did that ever have to do with anything? We have been making more wrong choices than right ones for decades.

I get all that.

 

I live here and pay taxes here.

 

I am against public financing of this project.  Build it with your own money.

 

Yes, I understand all the issues and yes I am completely against it as a private tax paying citizen with no financial interest in this project.

 

I am not ignorant of the facts and it is entirely possible to NOT be ignorant and NOT be for the project.

 

Awesome...soooo...you only get the taxes that a parking lot will get you rather than the up front taxes with possible spin off taxes...in hopes that someone else will build something there in your lifetime...makes perfect sense.

 

I get all that.

 

I live here and pay taxes here.

 

I am against public financing of this project.  Build it with your own money.

 

Yes, I understand all the issues and yes I am completely against it as a private tax paying citizen with no financial interest in this project.

 

I am not ignorant of the facts and it is entirely possible to NOT be ignorant and NOT be for the project.

 

I understand that point and could see how you feel about the public financing portion.  I think end of the day however is the amazing difference between the total construction cost versus the appraised value at completion.  A developer would have to be crazy to use their own cash to build this project out.  So it comes down to a want/need for Cleveland.  Is it a catalytic project that could spur more development?  Will the income tax and sales tax generated by this development be a win for Cleveland?  There's a lot to think about here, not just the school portion issue, but the big picture too.  I'm not sure how I feel about the deal.  I know I want to see it get built, but how we get there is the tough pill to swallow. 

I get all that.

 

I live here and pay taxes here.

 

I am against public financing of this project.  Build it with your own money.

 

Yes, I understand all the issues and yes I am completely against it as a private tax paying citizen with no financial interest in this project.

 

I am not ignorant of the facts and it is entirely possible to NOT be ignorant and NOT be for the project.

 

If people think it will get built anyway without the tif that's entirely fair (or some more modest project that won't be as good for downtown but will generate more than $54 million + the time value of money for the schools over the next 30 years). I firmly believe it won't be built but people could reasonably disagree there. If people don't think it will be built without the tif but still oppose it... I'm sorry but no. Reasonable people cannot disagree about whether it is better for the schools to get $54 million and downtown Cleveland to get a skyscraper filling in the space between east 4th/Q or the schools to get $0 and the parking lot crater to survive.

Some interesting info in that PowerPoint.

 

Out of curiosity, what do you find most interesting in the PowerPoint?

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

Out of curiosity, what do you find most interesting in the PowerPoint?

 

 

I liked the fact that it gave a pretty decent (hopefully accurate) explanation of the TIF.  Along with the various options of what could happen with both it passing and not passing.  Probably the most interesting thing for me was the slide that showed almost 60% of the 209 people supported the TIF.  I guess 209 is a relatively low number of respondents, but 60% approval seems good.  :clap:

What day this week does the CMSD vote on this issue?

What day this week does the CMSD vote on this issue?

 

Just look on Jeff Johnson's website and see what day he is planning a "Jeff Johnson fights injustice in front of the cameras" rally.

I get all that.

 

I live here and pay taxes here.

 

I am against public financing of this project.  Build it with your own money.

 

Yes, I understand all the issues and yes I am completely against it as a private tax paying citizen with no financial interest in this project.

 

I am not ignorant of the facts and it is entirely possible to NOT be ignorant and NOT be for the project.

 

If people don't think it will be built without the tif but still oppose it... I'm sorry but no. Reasonable people cannot disagree about whether it is better for the schools to get $54 million and downtown Cleveland to get a skyscraper filling in the space between east 4th/Q or the schools to get $0 and the parking lot crater to survive.

 

This is a complete and utter fallacy and I disagree wholeheartedly.  Reads like propaganda from a 4 post poster, just like the previous 2 post posters disagreement.

 

Excuse me if I'm a little skeptical on the coincidence of the low post count and Nucleus advocacy.

 

 

 

 

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

 

And this is a huge secondary consideration......once the Nucleus TIF passes, where does it end?

 

Are the public's obligations endless to private development?

 

Is the public wrong in asking how CMSD stewards it's money, or in this case, veiled bribe?

 

I did my part by peeing in the wind to my two closest council people, and here as well. 

 

It is far from a foregone conclusion that this is a win for the residents of Cleveland.

 

Development costs at 2x the expected build value at completion on day 1?  Madness. 

 

How about a smaller project? 

 

 

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

 

It can't get both a tax abatement and a TIF. That is just not how tax financing works.  If you don't understand it that's fine, but please don't advocate for a position you don't quite understand...

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

 

And this is a huge secondary consideration......once this happens, where does it end?

 

In 15-30 years, when the financing plans expire...

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

 

And this is a huge secondary consideration......once this happens, where does it end?

 

In 15-30 years, when the financing plans expire...

 

I was trying to ask "If this TIF passes, what is to stop every other developer to come hat in hand asking for same?"

 

Is that more clear?

This project or any other new construction project that brings significant numbers of new residents and jobs into the core of this city requires public financing, just as it does at the outer suburban fringe. There is very little economic momentum in this city. Catalyzing that momentum takes money.

 

There are two choices: 1. Creating the money on a definable timetable means public dollars. 2. Hoping it will happen with private dollars means it may never occur, especially when there's so little momentum.

 

EDIT: if more developers seek TIFs that attract private investment, create accessible jobs, bring more taxpayers into the city, eliminates downtown surface parking lots that have only increased in area over the past 30-60 years, and further catalyzes economic momentum, I welcome it.

 

I was trying to ask "If this TIF passes, what is to stop every other developer to come hat in hand asking for same?"

 

Is that more clear?

 

Yes. And the only reasonable answer is when Cleveland has a downtown housing market that is valuable enough to permit new construction of this scale with little to no subsidy. The fact is it doesn't right now. Generally urbanists and the supporters of this deal think it is OK to make these concessions now because the social return on re-urbanization is worth it in the long run.

 

People want to live downtown. That's why downtown has had sub-5% vacancy for, like, 24 quarters or something. This is a bet that reinvestment in downtown Cleveland will hit a point where employers can't not be there or nearby. Once that happens economic growth can feed on itself. There are a lot of signs outside the scope of this thread that back that reasoning up. Also it feels good because it is a positive sentiment, not a negative one.

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

 

It can't get both a tax abatement and a TIF. That is just not how tax financing works.  If you don't understand it that's fine, but please don't advocate for a position you don't quite understand...

Point taken, but I hardly think it renders my other points irrelevant.

 

Edit: From one of Michelle's articles about the TIF:

 

"The city previously approved forgivable loans for nuCLEus to help with demolition and site clean-up. Apartments and condos in the complex will be eligible for 15 years of property-tax abatement under a widely used city program meant to encourage residential construction."

I think it's totally reasonable to question the public benefit of the project. At least as questionable as the public benefits that have been derived from the Convention Center, Medical Mart, football stadium, Gateway, and Rock Hall. Not to mention the fact that most of this project won't even be publicly accessible. Its also already getting public support in the form of tax abatement. Furthermore, it's easy to see another developer asking for something similar on something like the Warehouse District lots. You could very well end up in a situation where all of the most expensive housing in the city, thousands of units (if a precedent is set), is contributing drastically less proportionally to the schools than neighborhood housing. I'd like to see the project get done but won't pretend there aren't serious issues with the TIF proposal.

 

Your comparison is not even close to being a reasonable comparison. Here the school district is getting $54 million immediately (plus the schools get 50% of any increase caused by an increase in valuation, any increase from future tax increases, and oh yeah all the revenue after 30-years) in exchange for $130 million over the next 30-year. Importantly, this is $130 million that the school district would not receive without this development. In contrast, for the construction of the convention center/medical mart the public kicked in hundreds of millions from a sales tax increase and for the construction of the football stadium/gateway stadiums the public kicked in hundreds of millions from the sin tax. I don’t know the details of the rock hall funding but I’m sure tens of millions came from similar revenue streams. Anyone buying anything in Cuyahoga county pays for the convention center/medical mart and anyone buying cigarettes/alchohol pays for the stadiums.

 

Without the sales/sin taxes being used to pay for those projects the city/county would have hundreds of millions of more dollars to spend elsewhere (if you're operating under the assumption those properties aren't generating large public benefits). Without this tif the school district has $56 million less to spend. And that's not even bringing up all of the benefits of the project itself for downtown. Again, unless you think it will get built anyway. In which case, fair enough we just reasonably disagree.

 

With regard to your slippery slope argument, if other developers come forth with similarly attractive deals where they give us millions up front that we can leverage for millions from the state and that makes sense within the bounds of the school districts building plans then great. If not and future deals don't make sense like this one, let's discuss where we want to draw the hard line when we start going down the slippery slope and not when we're comfortably resting on the top of the hill.

 

I get all that.

 

I live here and pay taxes here.

 

I am against public financing of this project.  Build it with your own money.

 

Yes, I understand all the issues and yes I am completely against it as a private tax paying citizen with no financial interest in this project.

 

I am not ignorant of the facts and it is entirely possible to NOT be ignorant and NOT be for the project.

 

If people don't think it will be built without the tif but still oppose it... I'm sorry but no. Reasonable people cannot disagree about whether it is better for the schools to get $54 million and downtown Cleveland to get a skyscraper filling in the space between east 4th/Q or the schools to get $0 and the parking lot crater to survive.

 

This is a complete and utter fallacy and I disagree wholeheartedly.  Reads like propaganda from a 4 post poster, just like the previous 2 post posters disagreement.

 

Excuse me if I'm a little skeptical on the coincidence of the low post count and Nucleus advocacy.

 

I've never met stark, have nothing to do with the project, and was merely motivated to start posting about it by my firm belief that everyone is entitled to their opinion but not all opinions have equal value.

 

It can't get both a tax abatement and a TIF. That is just not how tax financing works.  If you don't understand it that's fine, but please don't advocate for a position you don't quite understand...

 

Not to put words in bumsquare's mouth, but these are terms of art in Cleveland, so you absolutely can get both. Abatement in this context is the as-of-right tax abatement of additional city-imposed property taxes for residential development. The same thing every new house and every new apartment building gets. The TIF is the discretionary exemption that applies to the additional city property taxes on the non-residential portion and, in this particular case, but few others, the additional school district property taxes on the whole project.

 

It can't get both a tax abatement and a TIF. That is just not how tax financing works.  If you don't understand it that's fine, but please don't advocate for a position you don't quite understand...

 

Not to put words in bumsquare's mouth, but these are terms of art in Cleveland, so you absolutely can get both. Abatement in this context is the as-of-right tax abatement of additional city-imposed property taxes for residential development. The same thing every new house and every new apartment building gets. The TIF is the discretionary exemption that applies to the additional city property taxes on the non-residential portion and, in this particular case, but few others, the additional school district property taxes on the whole project.

Ur better at words than me. Like I said upthread from Michelle:

 

"The city previously approved forgivable loans for nuCLEus to help with demolition and site clean-up. Apartments and condos in the complex will be eligible for 15 years of property-tax abatement under a widely used city program meant to encourage residential construction."