Ohio’s ‘transformational’ transaction tax credit program receives $318 million in claims
Property owners and developers are seeking more than $318 million in rewards under a new state tax credit program for landscape-altering projects.
The Ohio Department of Development is considering 36 applications for the second round of its mixed-use transformational development program. Officials have $100 million to distribute — up to $80 million for projects in or near major cities, with the rest earmarked for smaller communities.
Applications were due July 8. Development officials have not announced a timeline for awarding the prizes, which must be approved by the Ohio Tax Credit Authority.
Northeast Ohio contenders include many regular contestants, as well as a few newcomers.
The DiGeronimo Cos. submitted a $16.2 million request — the largest in the region — for an approximately 25-acre slice of Valor Acres in Brecksville. This is the sprawling development planned around Sherwin-Williams Co.’s future research and development center off Brecksville Road.
Plans for the south end of the property include more offices, apartments, a hotel, grocery store, parking lot, and a small amount of retail space. The project, making its first run for state tax credits, will rise on a former U.S. Department of Veterans Affairs hospital site.
Sherwin-Williams inaugurated its R&D center last year. The global coatings giant, based in downtown Cleveland, plans to move 900 workers to Brecksville by the end of 2024.
In downtown Cleveland, the Kassouf family makes a second attempt to get tax credits for the Erieview Tower. A $13 million reward would help them redo empty offices with a W Hotel, upscale apartments and a restaurant on the 38th floor.
On the East Bank of the apartments, developer Bobby George is seeking just over $2.9 million in credits to transform Old River Road, where he and Cleveland-based GBX Group have teamed up to revitalize historic buildings on both sides from the street.
Their portfolio includes the Samsel Supply Co. complex, which George hopes to convert into a “wellness hotel” – with short-term rental apartments, Roman-inspired bathhouses, fitness facilities and other amenities.
The waterfront district, between Main Avenue and Settler’s Landing, could include a mix of new construction and preservation, with offices, entertainment, restaurants and a reimagined streetscape. Early renderings also show opportunities for boat mooring and pedestrian access.
Across the river, developers of the Bridgeworks apartment and hotel project have asked for almost $9.3 million in their second quest for credits. Graham Veysey, Marika Shioiri-Clark and Michael Panzica are behind the proposal to replace a parking lot and old county buildings at the west end of the Detroit-Superior Bridge.
At University Circle, the development team behind Circle Square hopes to land $8 million to complete the first block of their project, which will create a new gateway to the city’s educational, medical and arts district.
The Circle Square app extends southwest to Chester Avenue and Stokes Boulevard, where construction of the Artisan apartment tower is well underway. The rest of the block will include a new branch of the Cleveland Public Library, complete with apartments called Library Lofts; a parking garage; detail; and possibly a hotel.
In the Van Aken district of Shaker Heights, Max Collaborative has requested $7 million to help fund a high-rise apartment building north of Farnsleigh Road. The project is the second phase of a plan to create a city center for the inner suburbs.
Max Collaborative and Uplands Real Estate Partners tried to push through the deal this year, despite rising interest rates and rising construction costs. This is the second time they have asked for tax credits from the state.
In Lakewood, the developers behind Studio West 117 also filed a repeat request. Daniel Budish and Betsy Figgie have requested $6.2 million for their multi-building vision for a gathering place for local lesbian, gay, bisexual, transgender and queer communities.
In June, the couple won $5 million in historic tax credits for the centerpiece of their deal, a redesign of the former Phantasy Entertainment Complex into a series of venues and a home for small businesses. Their larger plans include an on-site sports and dining complex, slated to open in the fall, and a new apartment building to replace a former NTB tire and service center.
And in Solon, a development team led by Lyndhurst-based RHM Real Estate Group has applied for $2 million for a preliminary proposal to establish a town center for the suburbs, with residences, retail and retail, restaurants and parking.
All of those apps have fallen into the “big city” bucket, where developers across the state are looking for $280 million, more than three times what’s available.
The state received nearly $37.9 million in claims related to agreements in outlying communities, including Canton, Painesville and Youngstown.
The Canton app is for the Hall of Fame Village, a large project centered around the Pro Football Hall of Fame. The Hall of Fame Resort & Entertainment Co., which missed an award earlier this year, is seeking nearly $15.9 million.
In Painesville, developers have requested $5.4 million in tax credits for a project that will combine redevelopment and new construction. Montville-based Renew Partners LLC aims to transform an aging mall-turned-office building called Victoria Place into new offices, apartments and restaurants.
Willoughby-based Marous Development Group is in line to build new apartments and ground floor commercial space on nearby land between the town center’s main square and the River Grand. And the city is planning a new amphitheater near the water.
“It’s this connected project that is transforming downtown Painesville into a live entertainment district,” said Shawn Neece of Renew Partners.
The highest possible reward for a candidate is $40 million.
Only one project, north of Cincinnati in Springdale, is aiming for that maximum price. A project in Columbus requested $34 million.
Owners can claim a tax credit equal to 10% of project costs.
The program also gives insurance companies the opportunity to offset their state premium taxes by investing in real estate. Insurers will be entitled to a credit capped at 10% of their contribution to a transaction.
Applicants must demonstrate that incentives are key to their projects. They must also show that the state will recoup its investment through tax collection.