City expands Community Reinvestment Area

UNION — City council passed Resolution 19-03 at Monday’s meeting to expand the geographic size of ‘Community Reinvestment Area 2’ to slightly more than 2,811 acres, of which approximately 186 acres are located in Miami County.

The city established this reinvestment area by Resolution 561 on March 9, 1981 in accordance with Ohio Revised Code sections 3735.65 to 3735.70, designated by the State of Ohio Development Services Agency as Zone No. 113-78470-01.

Section III of Resolution 561 is amended to designate the city manager as housing officer of Community Reinvestment Area 2 as provided in Ohio Revised Code 3735.65.

The 120th Ohio General Assembly enacted Amended Substitute Senate Bill 19 that became effective on July 22, 1994 to amend the procedures and reporting requirements of Ohio Revised Code 3735.65 to 3735.70.

Section 3 of Senate Bill 19 provides that the amendments apply only to community reinvestment areas created on or after July 1994. Community reinvestment areas created before July 1994 may be amended twice without having to comply with Senate Bill 19.

On Aug. 8, 2016, Union Council approved Resolution 16-09 which adjusted the boundaries of ‘Community Reinvestment Area 2’ to expand the size to include more than 277 acres.

The land within the Community Reinvestment Area 2 is where the city has plans to expand commercial development.

“The CRA provides the community with options for economic development incentives in our industrial park,” said Denise Winemiller, assistant city manager and finance director.

Council made a survey of housing within its jurisdiction along with historic housing surveys of Community Reinvestment Area 2. New housing construction and repair of existing facilities or structures is discouraged within this designated area. “Remodeling” means any change made in a structure for the purpose of making it structurally more sound, more habitable, or for the purpose of improving its appearance. “Structure of historical or architectural significance” means those designated as such by resolution of the legislative authority of a municipal corporation, for those located in a municipal corporation, or the county, for those located in the unincorporated area of the county based on age, rarity, architectural quality, or because of a previous designation by a historical society, association, or agency.

A Community Reinvestment Area (CRA) is an area of land designated by a local government on which property owners can receive tax incentives for constructing new or renovating existing buildings. The CRA Program permits municipalities, townships, or counties to designate areas where investment has been lagging to encourage revitalization of the existing housing stock and the development of new structures. Residential, commercial, and industrial projects are all eligible. The program is similar to the Enterprise Zone program in that it incentivizes investment by allowing for property tax abatements, but that is where the similarities end. The program also should not be confused with the Community Reinvestment Act (CRA) for banking and financial institutions.

Ohio’s Community Reinvestment Area Program was created in 1977 and revised in 1994 in sections 3735.65-70 of the Ohio Revised Code, to promote revitalization in depressed areas by offering property tax exemptions for any increased property valuation that would result from renovation of existing structures or new construction activities within the area. The program can be used to encourage historic preservation, residential rehabilitation, or new residential construction and/or as an economic development tool to encourage commercial and industrial renovation or expansion and new construction.

Criteria for Commercial or Industrial Projects

• Negotiated by tax review committee on case-by-case basis

• Maximum of a fifteen-year abatement and up to 100 percent abatement

• Minimum investment of $5,000

• Agreement must be completed prior to construction

• State of Ohio charges $750 for application

Commercial and industrial projects involve a negotiated agreement that must be in place prior to starting a project. The incentive levels and terms of the agreement will be negotiated, and there is notification to the affected school district. A Tax Incentive Review Council is created by the legislative authority to review performance on all agreements and projects. The review is typically done annually. Annual reports on the status of the CRA are sent to the Ohio Department of Development.

While the CRA Program is primarily geared to housing, it has considerable value as an economic development tool because it can be used to incentivize targeted retail or commercial projects. The Enterprise Zone program, which operates similarly in that it provides for tangible property tax abatements, is strictly for manufacturing or service-related projects. Certain retail or commercial projects targeted by a community to improve the quality of life or fill a market need, including downtown restaurants or specialty shops, would be good candidates for the CRA program.

Any person aggrieved under sections 3735.65 to 3735.69 of the Revised Code may appeal to the community reinvestment area housing council, which shall have the authority to overrule any decision of a housing officer. Appeals may be taken from a decision of the council to the court of common pleas of the county where the area is located.

By Ron Nunnari

Reach Ron Nunnari at 684-9124, via email or on Twitter @Englewood_Ind