New CRA plan unveiled

NORWALK — Norwalk Mayor Dave Light presented a resolution to the city's council at Tuesday evening's meeting to modify the city's Community Reinvestment Area, or CRA. A CRA is an economic development tool that provides real property tax exemptions for property owners who renovate existing or construct new buildings, according to the Ohio Department of Development. The city's current CRA was established in 2006 and covers only buildings in the downtown area. The new resolution, if approved by a city council vote, would expand that footprint to include the entire city. It was not clear if and when the city council would set the matter to a vote. The proposal would also allow new residential and commercial construction, along with major remodeling, to be eligible for tax abatements of up to 75% for 10 years. The new proposal continues tax funding to Norwalk Schools at the same amount of raw tax dollars it currently receives. In other words, only improvements made to a property would be untaxed. Why is it needed? According to Light, Norwalk has a housing crisis and the CRA would help alleviate the issue. "Occupancy rates are above 95% in the Huron, Erie and Ottawa County area," Light said. "The CRA will help stimulate the construction of additional residential housing units to increase our housing stock and alleviate this residential housing crisis. This method has proven itself effective in similarly situated areas such as Willard, Bellevue, Clyde, Shelby, Fremont, Wakeman and Sandusky." It is not only residential housing that is suffering, but local businesses are having difficulties housing employees near their jobsites, according to Light. "Some businesses have people living as far away as Clyde, Fremont and Bellevue, and driving to work every day here in Norwalk," he said. According to Light, Ohio has over 200 areas with active CRAs and they are using them to attract developers. Light wants residents to understand that under these plans, their taxes will not increase. "The CRA recipients still pay full taxes on the value of the real estate. They receive a partial abatement on only the increased value for a limited period of time," he said Sarah Ross, executive director of the Huron County Growth Partnership, agreed with Light's assessment. "While we're not asking for 100 percent for 15 years, which is the most allowable by law, we're at least giving some clarity to people who are considering investing here," Ross said. Ross explained with the current proposal, 25 percent of the additional tax assessed for improvements would go to the schools and other entities, as would the same amount of tax they received prior to the improvements. "All current property tax liabilities would still exist. You would only be abating the net gain," Ross told the city council. "A home that is being remodeled is still going to have the same property tax liability. Whatever the new liability is, we're going to abate 75 percent of that." John Lendrum, a member of the partnership's board, also agreed with the plan and addressed the council. "We do subdivision work all over the state of Ohio, and this is not an unusual type of an arrangement," Lendrum said. "It's done in a lot of places. I think that communities that aren't prepared to do this type of thing are a step behind their partners and peer groups." Council members comment Council member Samantha Wilhelm categorized the previous CRA proposal as "aggressive" and that the new proposal was a "compromise." "The schools made it known that they did not appreciate it, that it was too aggressive to them. That was too much forfeiting of tax," she said. According to Light, Norwalk has 62 vacant lots suitable for building as well as two large housing projects being built in town. Light said he believed the proposed CRA would lead to homeowners remodeling aging homes and increasing their value, allowing the city to recover more tax dollars. "An effective CRA will lead to increased property values citywide, strong schools and strong communities go hand in hand," Light said. "With this program, the property values around the city will go up as older homes are renovated, and new homes are built. The increase will be realized by both the abated home and the surrounding area." Councilman Steve Gfell voiced concerns that the city might not have sufficient infrastructure to support the growth spawned by the CRA. According to city public works director Aaron Osborn, there should be no issue with the sewer and water service lines as "they accommodated for those lots being built on when the lines were put in years ago".