Shaker Heights Council reviews economic development goals and priorities

SHAKER HEIGHTS, Ohio — With Van Aken District Phase II grand opening two weeks away and the Lee Road Action Plan gaining momentum, the city council on Monday reviewed the expansion of opportunities at all levels.

They sat down with the city’s director of economic development, Laura Englehart, who provided an update on various programs that continue to pay dividends and what could be done to remove barriers for underrepresented populations.

The board also discussed tax incentive considerations that remain “ongoing,” though Englehart noted that there are some “deal-specific” approaches the city continues to take.

An example is the “But for” test, in a nutshell, “can the project be carried out without inducement? If so, no inducement should be provided, Englehart said, essentially leaving it to the individual developer to take it from there.

While one of the city’s main goals continues to diversify its tax base from the current 86% residential and 14% commercial, there aren’t many individual projects that can move the needle forward on their own. .

But it’s the little things that start to add up, like getting rid of the “faux stone” storefront in the Chagrin-Lee hallway that’s Process Canine’s latest expansion.

Moving away from Cuyahoga County’s storefront renovation program that led to eight projects and a $192,000 investment along Lee Road in 2016-17, the city launched its own program in 2019.

This has led to 16 storefront projects in nearly every business district of the city, although the Block of Almar, just north of the Van Aken district, only counts as one, covering the five adjacent businesses in a combined property.

The city’s program generated $183,000 in private real estate investment and the opportunity for free design services across the city.

Englehart’s compendium and PowerPoint also provided a full explanation of the differences between tax increment financing (TIF) which allows developers to reinvest what is typically 75% of their “payments in lieu of taxes (PILOT)”. in their projects.

And sometimes more, as was the case with the $140 million Farnsleigh apartment towers which now keep 88% of the pilots, while the Shaker schools have agreed to keep only 12% but still more money than they never expected it in 2016 when the original “75″-25″ deal was signed.

This was due to soaring inflation, supply chain and labor shortages, and other unforeseen market conditions that prompted the city to pour $4 million into under a “conditional grant/loan-for-grant, as the cost of the project has increased by $30 million”. over the course of a year while funding was being aligned.

Other incentives include Community Reinvestment Zones (CRAs) which can benefit from tax abatements in three zones around the city:

— Transit Village ARC, residential, 15 years, 100% reduction

— Southern Moreland CRA, Residential, 10 Years, 100% Abatement

— Warrensville-Farnsleigh ARC, commercial, up to 15 years abatement (Shaker Rocks and The Nest School, formerly Le Chaperon Rouge)

The city’s Vision Fund provides another big local incentive for businesses, with 16 loans issued since 2010 totaling $1.6 million, of which $1.5 million has already been repaid through new local income taxes collected in the city, and with three companies that are still reimbursing.

By dividing local matches with Cuyahoga County, the city’s Small Business Administration Partnership Program has spurred $2.4 million in private investment since 2014 through 12 loans, for which the city has also had to spend around $178,000.

More than $343,000 remained available through the SBA partnership loan program, Englehart noted.

Through programs such as the Van Aken District Entrepreneurial Initiative, the city has helped provide people of color, women and all underrepresented entrepreneurs the opportunity to showcase ideas, products and services in the “new downtown” of the city.

It also contributed to a current tally of 363 businesses in Shaker Heights, including 87 new to the city since 2018, although the council asked for figures on how many businesses failed during that time.

On a new council recommendation, Englehart planned to add other facets, focusing on affordable housing opportunities, residential tax abatements based not on neighborhood but on personal needs, and reducing the tax burden – both on property and on income – for residents.

For the remaining debt from the city’s urban renewal program that led to the construction of the Shaker Towne Center, city officials expect the new HarborChase senior care center on the Avalon Station property II along Van Aken Boulevard eventually pays off, with a “75-TIF 25 Package″ in place as soon as the building opens.

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