The Morning Journal (Lorain, OH)
Council eyes tax incentives
Broadway Building tax breaks on table for hotel project seen as catalyst to downtown
A plan to rejuvenate the Broadway Building could get $3 million in tax breaks from City Hall.
Lorain City Council and the city administration could offer financial incentives for a plan by Ariel on Broadway LLC to redevelop the Broadway Building, 301 Broadway.
The former hotel could be reborn as a hotel with about 55 rooms, about 5,000 square feet of conference space, about 1,000 square feet of office space and about 7,000 square feet of retail space on the first floor, according to plans. Ariel on Broadway is a company of Cleveland developer Radhika Reddy of Ariel Ventures LLC.
On March 19, Council approved a resolution of intent to offer Ariel on Broadway LLC up to $3 million in tax incentives for the project.
“The project is very important to the city’s economic development plan, and I believe the project will not only provide for the redevelopment of an
important asset in the city, but will also catalyze the development and redevelopment of other important community assets located in the vicinity of the project,” said a letter from Mayor Chase Ritenauer.
Ariel on Broadway is compiling information about renovating the building, said Tom Brown, executive director of the Lorain Port Authority, which controls the Broadway Building.
The company will seek historic tax credits that would help finance the project cost, Brown said. The city support helps Ariel on Broadway’s chances of approval for the historic tax credits.
That application is due at the end of March with a decision on the credits in June, Brown said.
“They want to start as soon as possible,” Brown said. “If that’s approved, then, boom, it’s going to start,” he said about the historic tax credits.
The city could offer a Community Reinvestment Area Tax Exemption that forgives 100 percent of property taxes for the improvements to the Broadway Building.
The tax exemption would last up to 15 years and could provide an incentive worth up to $1.4 million.
Another incentive could be Tax Increment Financing worth up to $1.6 million. In that incentive, the city would grant a 100 percent tax exemption for the value of improvements to the building. Ariel on Broadway then would pay the city an amount of money equal to the real estate taxes forgiven, according to Ritenauer’s letter.
The mayor noted the tax incentives apply to the value of the improvements. The current land and building values “will remain fully taxable” during the terms of the tax breaks, he said.
The city also could support “PACE Financing,” or Property Assessed Clean Energy financing, for the project, Ritenauer said. That allows property owners to create an “Energy Special Improvement District” and get financial breaks to pay for energy saving retrofits to existing buildings. Examples could include lighting, air conditioning systems and boilers, Ritenauer said.