Tax abatements to change?

NORWALK — A pair of resolutions to amend the city's new Community Reinvestment Area (CRA) and Enterprise Zone Agreements (EZA) were introduced at Tuesday's city council meeting. Norwalk Mayor Dave Light told the council that the current CRA contained language that an application for tax breaks must be submitted before new construction or remodeling begins. Under the current rules, work cannot begin before the CRA agreement has been approved by the city. This change would allow residents to apply for CRA grants if the project was started prior to its passage. The current language doesn't "conform to Ohio law," according to Norwalk law director Stuart O'Hara. 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 approved Norwalk CRA gives tax abatements for residential construction of 75 percent for 10 years and commercial properties will receive an abatement of up to 75 percent for up to 10 years. The CRA has been over two years in the making. Light first proposed an expanded CRA in 2023, but due to initial pushback from the Norwalk school board, Light and the council tabled the proposal. The CRA was passed by the council with a 6-1 vote in June. Enterprise Zone Agreement Changes were also proposed to the city's Enterprise Zone Agreements, which, according to O'Hara, are "not competitive" compared to other municipalities in the area. Norwalk's Enterprise Zone encompasses all land within the city limits and offers tax incentives to encourage capital investment, job creation and retention by applicable businesses, according to the Huron County Growth Partnership. Light's proposal would make the "assistance available" guidelines clearer, making it easier for potential applicants to understand the process. "To keep the city competitive in more of a global market, we decided to upgrade (the guidelines)," Light said. The changes proposed would allow an "exceptional case" to be eligible to receive tax incentives "in excess of the current 75% abatement and allow extension of the current 10 years to a maximum of 15 years. Currently, an "exceptional case" requires the project to create "50 jobs" to be eligible for bigger tax cuts. This rule would be changed to "the establishment of a new business or the expansion of an existing business which, in the opinion of the negotiating committee, due to the type or location of the enterprise or the number of new jobs and new payroll proposed to be created, warrants the city offering an abatement in excess of the 75 percent and or 10 years in duration, provided that the terms of any abatement shall not exceed 15 years," if passed, according to O'Hara. The ordinance would also "clean up some of the language" concerning school board approval. "Whatever the Ohio Revised Code says, that's what we will follow," O'Hara said. Councilman Drew Burge asked O'Hara if there was a specific project driving these changes. O'Hara replied that there was a negotiation ongoing, but the potential changes were not "for that business." "It will make our negotiating with that company easier and more attractive, and let us be more competitive with surrounding areas," O'Hara said. "When you're dealing with these businesses, time is of the essence. He continued: "We're not doing this for this business, but if we can accommodate them while making ourselves more competitive, we think it's a win-win for everybody." O'Hara did not specify during the meeting what project/business he was referring to. These changes could take place following the next city council meeting, which takes place this coming Tuesday, July 14.