LORAIN — The city of Lorain could be taking possession of the Broadway Building for a brief period next week as a way to get the funding to rehabilitate it.
Lorain Port Authority Executive Director Tom Brown said Ohio Revised Code dictates that the city needs to have owned the building in the recent past in order to get tax increment financing, or a TIF, for the project aimed at putting a 55-room hotel in the building.
“It’s basically a paperwork shuffle,” he said. “It’s just a quick thing. The city actually owned the building for a time in the 1980s and we thought that was going to count for that particular piece, but it didn’t.”
Brown said the Port Authority’s board of directors, the current owners of the building, authorized him to transfer the property at a board meeting Tuesday night. On Monday, the transfer will go before City Council for approval.
“It’s temporary for however long they need to have it that will satisfy that particular statute,” he said.
Brown said while the Port Authority and Ariel on Broadway, the developer of the former Spitzer Plaza Hotel, are being “aggressive” in trying to get the hotel opened by next July, there are several things that still need to be done as far as financing is concerned before construction can begin.
First, the city has to have possession of the building and then the school board has to approve the TIF and a community reinvestment area tax abatement as part of the financing package.
According to a letter of intent Mayor Chase Ritenauer wrote and City Council approved at its March 19 meeting, the package being offered to the developers is:
- CRA tax exemption, totaling $1.4 million over 12 years;
- TIF for the increase assessed value of the project, totaling $1.6 million over the course of 30 years; and
- Property Assessed Clean Energy financing for energy-saving retrofits, including lighting, HVAC systems, energy management systems, waste energy recovery systems, electrical distribution and refrigeration.
While the school board has been stripped of most of its powers through a state takeover, it still has control over matters related to property values — ballot levies and tax abatements.
At a June 6 school board meeting, the members discussed the matter briefly. School board member Tim Williams said he wanted to make sure the financing is comparable to a deal that was discussed previously.
“I don’t know that there’s anything different in this scenario than before, so I would prefer just to get a simple explanation of the money we’re deferring,” he said. “I want to do it because we wanted to do it before and it made sense before, but I want to make sure that we’re getting the same deal.”
A Chicago-based developer previously had made a deal with the Port Authority to develop the building but backed out after funding became dicey with the expiration of historic tax credits from the state.
School board President Tony Dimacchia said since the building had been sitting empty since the Spitzer Plaza Hotel closed in 2005, he was more than ready to go forward with the financing.
“How long has that building sat vacant, taking up space in this city and we’re not getting any tax revenue off of it, not much at all so I personally don’t have a problem with it,” he said.
Josh Hill, district treasurer and chief strategy and innovation officer, said the district has “very minimal to lose and a lot to gain by that building improving, for sure.”
The financing package will come before the board again at its June 18 meeting. After that, it will go to City Council for consideration.
Brown said the Port Authority also has to receive historic tax credits from the state before construction can begin, which is news they expect to receive by the end of the month.
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