Developer backs out of funding trail thru tax abatement-
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  1. #1

    Join Date
    Dec 2006

    Upset Developer backs out of funding trail thru tax abatement

    Cleveland activist groups had worked out directing property tax receipts from a controversial "big box" Wal*Mart development to completing a landmark bicycle trail. The tax-poor city of Cleveland needed these funds to complete the Ohio and Erie towpath trail from the Cuyahoga Valley National Park to a new park on the Lake Erie shore. This trail would have enabled young people in the working class neighborhoods to have fun, play in nature and discover cycling--but it is not to be!

    Now, the developer is "discovering" that an obscure Ohio law passed last year will give them an "abatement" and enable them to back out of funding the Towpath Trail. How convenient!

    Cleveland may not get Steelyard's tax millions
    Big-box retailers receiving 10-year abatements from Ohio
    Thursday, February 08, 2007
    Susan Vinella
    Plain Dealer Reporter

    Two years ago, Cleveland promised to direct $18 million in property taxes from the controversial Steelyard Commons shopping center to pay for the extension of the Towpath Trail into downtown and to support mom-and-pop shops in nearby neighborhoods.

    But now, that promise might not be kept.

    City officials said they discovered late last year that Steelyard's developer, Mitchell Schneider, and several big-box retailers locating on the former steel mill site are eligible for a 10-year property tax break, which would take away millions intended for the trail, neighborhood stores and even city schools.

    Wal-Mart, scheduled to open in September, already has been approved for the tax break by the state. Home Depot, which opened last week, has applied for it. Target, set to open in four weeks, is also eligible.

    Schneider, who still owns about 60 percent of the land, said he has not yet applied for the tax break and will work to find a way to direct the taxes on his property to the city. Schneider and Ken Silliman, Mayor Frank Jackson's chief of staff, said they also will try to persuade Wal-Mart and the others to give up the tax break.

    "There's certainly no guarantee that we can get them to do [that]," Schneider said. "That's the million-dollar question."

    Trail supporters are counting on the money to help finish the final six miles from Harvard Road to downtown Cleveland.

    The state automatically grants the 10-year tax break to a property owner who successfully completes a voluntary environmental cleanup on his site and receives a document called a Covenant Not to Sue.

    The document protects the property owner from legal action by the state if an environmental problem is discovered later.

    Schneider said he needs this legal protection to secure bank and other loans to develop the former industrial site.

    He said he did not know that the Covenant Not to Sue would result in a tax break when he told the city about his plan to participate in the voluntary cleanup program in late 2005.

    Greg Huth, the city's economic development director at the time under former Mayor Jane Campbell, declined comment through a spokeswoman Wednesday because he now works for the law firm that represents Schneider.

    City Councilman Joe Cimperman, who represents the neighborhood that includes Steelyard, said the city needs the tax money.

    "We've got to find a way to make this work," he said.

    Schneider said a new law that takes effect next month could help him direct his portion of the taxes to the city. The law allows a property owner to voluntarily give up his tax break.

    Tim Donovan, director of the Ohio Canal Corridor and a champion of extending the Towpath Trail, could not be reached Wednesday.

    Colleen Guilson, who heads the citywide neighborhood group that pushed for Steelyard taxes to help local mom-and-pop shops, said she was unaware of the problem and planned to talk to city officials about it.

    To reach this Plain Dealer reporter:

    [email protected], 216-999-5010

  2. #2
    Double-metric mtb man
    Reputation: Psycho Mike's Avatar
    Join Date
    Apr 2006
    It's nice to get the former industrial area cleaned up, but dang, that sucks to lose the trail funds to do it.

    Hopefully more of the folks going in will forego the break or donate the equivalent in kind. (not that I'm holding my breath where WalMart is concerned).
    As if four times wasn't enough-> Psycho Mike's 2013 Ride to Conquer Cancer Page

    Moran? Let your opinion be free -> F88me

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