CLEVELAND HEIGHTS, Ohio -- The Cleveland Heights-University Heights Board of Education has approved an amended school compensation agreement for the Cedar-Lee-Meadowbrook project.
The unanimous passage over the weekend allows Cleveland Heights City Council to move ahead with a final vote on the tax increment financing (TIF) package for the $50 million mixed-use development.
Meeting in special session during a scheduled retreat at the Cuyahoga Community College Corporate Conference Center in Warrensville Heights Saturday (Nov. 19), the school board agreed to remove a “shared facilities” proposal that will now be negotiated separately with the city.
“This vote indicates the board’s unwavering support for projects that enhance the economic vitality of the city,” a joint statement from the school board noted, adding that “we accept City Council’s good faith commitment to come to an agreement (about shared facilities) outside of the TIF.”
Council held off on approving an earlier version of the tax incentive package at its Nov. 7 meeting, asking the school board to reconsider the addition of a proposed shared facilities agreement when it met in special session the previous week.
School board members remained adamant about the need to eliminate the practice of charging the district for use of some city facilities -- namely tennis courts and ballfields -- which in effect had residents paying twice for facilities already built and funded through their taxes.
At the same time, the city has not charged the district for use of the ice rinks by school hockey teams.
“We appreciate the leadership of Cleveland Heights City Council -- and especially council President Melody Joy Hart -- for understanding why double taxation is not in the best interest of our residents,” the school board’s Nov. 19 joint statement added.
Council in turn unanimously supported its own separate resolution authorizing Mayor Kahlil Seren to negotiate “a mutually beneficial agreement for the use of each other’s meeting and recreational facilities.”
Concerns from the city included the use of the word “priority” consideration for school activities, as well as the need to include the clause as part of the 30-year term of the TIF.
“The mayor made a written and verbal commitment to refrain from charging the citizens of Cleveland Heights fees for the use of athletic facilities for CH-UH sports teams,” the school board’s joint statement added.
School board members expressed further confidence that a finalized facilities agreement will be worked out separately.
Noting that “productive collaboration with city leaders on projects that benefit our community is essential,” the school district’s joint statement added that “in the future, we expect the board will be included as a partner in the collaborative development of compensation agreements.”
This time around, the school district negotiated what Seren described to council last month as “a much better deal” than for the $80 million Top of the Hill project nearing completion by the same developer, Flaherty & Collins.
The biggest difference involves the proposed split of payments in lieu of taxes (PILOTs) between the developer and the school district, with F&C receiving just over 66 percent and the schools guaranteed nearly 34 percent -- possibly more if the valuation of the project exceeds expectations, CH-UH Board of Education President Malia Lewis noted.
That formula works out to about 9 percent more for the school district than the existing agreement for Top of the Hill, where the developer keeps 75 percent of the PILOTs and the schools get 25 percent. That was the original offer this time around as well.
With the new agreement, the school district stands to gain another $300,000 a year in revenue through the PILOTs, going from $109,000 a year (most of that collected in taxes on the under-utilized parking garage) to about $409,000 annually, good for over $12 million over the 30-year TIF term.
In another additional feature of the new TIF for Cedar-Lee-Meadowbrook, the city will also split the nearly $325,000 in local income taxes generated from the 257 construction jobs on the project, good for more than $162,000 apiece to the city and the school district.
The mixed-use development, with 206 apartments and about 8,200 square feet of retail space, will create 25 permanent jobs and become home to more than 300 residents. An estimated two-thirds of them will be new to Cleveland Heights, generating another $200,000 a year in city income tax revenue.
The school board also negotiated a parking agreement to use the city lot at Edgewood and Cedar roads while construction is going on, much of it in the existing surface lot behind the Cedar-Lee Theatre, whose owner has given his endorsement of the project.
In the revised TIF that City Council was expected to approve this week, the scope of the project has now been expanded to just over 5.1 acres.
This comes with the addition of The Cut Beauty School and Heights Animal Hospital -- both vacant properties fronting Cedar Road and across from Heights High that the city acquired for a little over $1 million combined -- as an additional contribution to the project.
In the meantime, Fran Mentch, who spearheaded an unsuccessful challenge of the development at the polls in May -- seeking to preserve the developable acre included at Lee Road and Meadowbrook Boulevard as a public park -- pointed out that there has been miscommunication about the status of permits for the project.
Those permits had yet to be issued by the city as of Nov. 10, although supporters of the project have told council that they had already been authorized.
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