"Cleveland: A Growing Metropolis - Public finance and tax incentives fuel Cleveland's development"
Cleveland has gone through quite the makeover in recent years. Since 2015, the real estate development market in the downtown area has boomed, with dozens of projects utilizing private and public financing tools to create new multi-use properties. Examples of these large-scale construction projects include the Flats East Bank, which turned a once dilapidated area of the Flats into a residential and commercial center of the city, and the planned construction of the NuCLEus Project, which will further transform Cleveland’s Gateway District near Progressive Field and Rocket Mortgage FieldHouse (which itself is completing a $140 million renovation). Large skyscraper, multifamily apartment complexes such as the Beacon Apartments near the East Fourth District, the One University Circle apartment tower near the Cleveland Clinic and University Hospitals campuses, and the Lumen Tower Project in the Playhouse Square District are likewise utilizing the financing and investment tools offered through both public and private means. In keeping with this surge of downtown development, the city of Cleveland has turned its eye to renovating its outdated justice center complex, which houses the county jail, the Cuyahoga County Court of Common Pleas, the Cleveland Municipal Court, the county prosecutor and the sheriff’s department. While plans are preliminary at this time, it is likely that the renovations will include some portion of private and public finance.
What caused this increase in real estate development in the downtown area? Public financing tools and federal and state tax incentives that offer substantial enticements to real estate developers and investors is certainly a significant reason for the trend. These options have been used to varying degrees, but have continued to be a substantial portion of the financing and investment obtained for the revitalization of downtown Cleveland.
Perhaps the most significant public entity to promote high-end real estate development in Cleveland is the Cleveland-Cuyahoga County Port Authority. A port authority is a quasi-governmental organization created for the express purpose of, in part, engaging in activities that “enhance, foster, aid, provide, or promote transportation, economic development, housing, recreation, education, governmental operations, culture, or research within the jurisdiction of the port authority.” Ohio Revised Code § 4582.01(B)(1). Port authorities have specific powers provided by statute, which include the ability to “acquire, construct, furnish, equip, maintain, repair, sell, exchange, lease to or from, lease with an option to purchase, convey other interests in, or operate real or personal property, or any combination thereof, related to, useful for, or in furtherance of” any of the above noted authorized purposes. Ohio Revised Code § 4582.06(A)(1). In addition to these powers, port authorities may issue bonds or notes for the acquisition, construction, furnishing or equipping of real or personal property for the above noted authorized purposes. Ohio Revised Code § 4582.06(A)(3).
Click here to read the full article in Cleveland Metropolitan Bar Journal