Ohio Rolls Out Long-Awaited Tax-Credit Application for 'Transformational' Projects
Michelle Jarboe, Crain's
Ohio has launched a long-awaited incentive competition for so-called "transformational" real estate projects.
The application portal for the Transformational Mixed-Use Development Program went live Tuesday, Sept. 21, on the Ohio Department of Development's website.
The deadline to apply is 5 p.m. on Oct. 29.
First-round applicants will vie for $100 million in tax credits, $80 million of which are earmarked for projects in or near major cities. To qualify, projects must include at least two uses — parking does not count — and must promise to have a dramatic impact on the site and surrounding area.
Project consultants expect demand for the credits to far exceed supply, particularly in the debut round.
The Ohio legislature earmarked $400 million in estimated tax credits for the program, spread evenly across four fiscal years. The Ohio Tax Credit Authority will approve awards once each year.
The maximum award for any development is $40 million. Property owners can seek a credit equal to 10% of a project's costs. The credit also offers an opportunity for insurance companies to offset their state premium taxes by investing in eligible developments. For insurers, the credit is capped at 10% of a project contribution.
The tax credit must be a key cog in a deal, and applicants have to provide calculations showing that the state will see a return on its investment through increased tax collections.
The development department, which is administering the program, has not set a date for announcing the awards. Officials will evaluate and rank the applications using a process that is similar to scoring for the state's popular historic tax-credit program.
The tax credit authority, a five-member independent board that votes on job-creation incentives for employers, typically meets once a month.
The roots of the new tax credit date to early 2018, when a bill aimed at high-rise, high-cost projects first popped up in the General Assembly. That legislation was designed with a Cleveland project in mind: NuCLEus, an ambitious Gateway District proposal that has not moved forward.
It took years of committee hearings and scads of revisions to broaden the program and make it a reality. The General Assembly finally passed Senate Bill 39 late last year, and Gov. Mike DeWine signed it into law on Dec. 29.
Legislators preserved unspent allocations and shifted the sunset date for the program from mid-2023 to mid-2025 as part of the biennial budget bill they passed in June.