Cleveland is extending an economic development tool created to raise tax dollars to fund projects like the VA hospital and Steelyard Commons to potentially pay for improvements to the city’s lake and river fronts.
Cleveland City Council approved Monday a 30-year extension on tax increment financing, or TIFs, used to finance five projects, including the VA Hospital, East Fourth Street, Steelyard Commons and the Hilton and Westin hotels. TIFs are typically used as a development incentive that allows increases in property taxes to be diverted to specific projects throughout the city.
But instead of pouring money back into those specific projects, Cleveland’s Development Chief Jeff Epstein said leaders plan to use the money to help fund the master plans to improve the lake and river fronts and expand citywide recreation. That could include projects like the Northcoast Connector land bridge between Downtown and Lake Erie.
"This is part of a broader strategy to create a large fund that we’re calling the Shore to Core TIF district, which will help us capitalize our waterfront projects — lakefront and riverfront — as well as a core of Downtown and invest in parks and recreation," Epstein said.
Those TIF extensions are expected to generate millions toward that goal: in 2022, the five projects totaled $6 million in funds for the city after the schools received their portion of the taxes. The city will not be able to tap those funds for other uses until 2033 at the earliest when the first TIF expires.
The money for lakefront and Downtown projects is not a guarantee: city leaders must come back to the council for fund allocations. But if approved, those allocations could potentially add to the $20 million of pandemic relief funds Mayor Justin Bibb recently committed toward waterfront activation.
"We have very limited access to both our river and our waterfront," Epstein said. This will help us attract more residents, more visitors, more businesses, more economic opportunity."
The legislation would also allow the city to use TIF money anywhere in the city. That means a Downtown TIF project could potentially fund a park in the Central neighborhood, Epstein said.
The city plans to make further use of TIFs in the months to come. Epstein said in January, the city plans to propose legislation for a TIF district, similar to those already in effect in other cities like Columbus and Cincinnati.
