On January 29, 2018, Columbus Mayor Andrew Ginther and City Council announced a new policy for tax incentives that would significantly change the way in which tax abatements and other incentives are structured in certain areas of the City.  Currently, there are several community reinvestment areas (“CRAs”) for various neighborhoods in the City that provide for a 15 year, 100% real property tax abatement for new development. 

For purposes of residential development, the new policy would divide these neighborhoods into three categories – Market Ready, Ready for Revitalization and Ready for Opportunity.  Areas that are designated as Ready for Opportunity would retain the existing 15 year, 100% CRA abatement for all multi-family residential development.  Areas that are designated as Market Ready would require 10% of the units to be rented to households at or below 100% of the average median income and another 10% of the units to be rented to households at or below 80% of the average median income.  Residential CRA abatements in Market Ready areas would only be available for new mid-rise and high-rise multi-family developments and rehabilitation of single family homes, and also would be reduced on a gradual basis over the last five years of the abatement term.  Areas that are designated as Ready for Revitalization would require developers to do one of the following:  (1) meet the affordable housing requirements for Market Ready Areas; (2) pay $2,500 per unit to a community group working on affordable housing; or (3) include an affordable housing group as a partner in the project.  The designation of the City’s existing CRAs into the above-described categories is in process, and will be completed by the time that City Council adopts the new policy. 

In addition, the new policy would introduce a new process for awarding City job creation tax credits and job growth incentives.  Under the new policy, the City would publish a scorecard for each applicant the evaluates the application on the basis of the number of new jobs, the average hourly wage, the retained jobs and payroll and the length of the lease/ownership status of the facility.  Special consideration will be given to projects in areas designated as Ready for Opportunity, projects located on former brownfield sites and companies encouraging employment of difficult to employ populations.  In addition, the average hourly wage must be at least $15 per hour to qualify.

The new incentives policy is expected to be presented to City council in the spring, and will likely become effective summer 2018.  Benesch will continue to follow the progress of this new policy and will provide updates as necessary.